At Plum Creek, a Changing of the Guard

By Beacon Staff

When he retires from Plum Creek Timber Co. at the end of the month, Hank Ricklefs will feel much better about stepping down from his position as vice president of northern resources and manufacturing than he would have a year ago at this time.

“It was absolute turmoil,” he said of 2009. “No one had a solid feeling for where the bottom was.”

Plum Creek, like all American corporations but particularly those tied to the construction industry, suffered through the recession. In March, it shuttered its Ksanka sawmill. The following June, the Pablo sawmill and stud mill were closed, along with the temporary idling of the remanufacturing plant in Evergreen. Plum Creek reported heavy losses and hundreds lost their jobs.

Nor was Plum Creek alone. Other timber companies were hit hard, and when the Smurfit-Stone Container Corp. in Frenchtown announced its closure, shockwaves spread throughout western Montana’s wood products industry, decimating the pulp wood market and squeezing many of the contractors Plum Creek uses.

The litany of bad news is familiar by now. But Ricklefs, along with his replacement, Tom Ray, who is being promoted from his current post as vice president of Montana operations, believe they see the light at the end of the tunnel, and that Plum Creek’s Montana operations are poised to capitalize on the gradual economic recovery underway.

“We are seeing signs of improvement in virtually all areas of our business,” Ricklefs said, adding that all of Plum Creek’s divisions in the region, newly “right-sized for the timber” in Montana, are positively contributing cash margins.

Ray said Flathead facilities are beginning to take on greater volume, which hasn’t allowed for new hiring, but has given current workers more hours and even overtime. Hiring temporary seasonal help this summer may be called for. The plywood market is beginning to show strength as demand increases for the manufacture of items like pull-behind campers. Many retail stores are sprucing up by renovating their interiors, creating a demand for the display panels produced by the medium density fiberboard (MDF) plant in Columbia Falls.

And Plum Creek executives are continually assessing whether the Evergreen sawmill can be reopened, though Ray couldn’t make any predictions one way or another – mainly because it’s a recovery occurring in fits and starts. Stud prices recently rose and then slid right back down.

“We still feel that it is a fragile recovery,” Ricklefs said. “The data, while it has shown a bottom, has not shown any sustained uplift.”

But Ricklefs praises his replacement, and believes Ray’s stewardship over the last few tumultuous years has left him well prepared to take over management of Plum Creek’s 430,000 acres in Oregon and 100,000 acres in Washington on top of the 972,000 acres in Montana. Despite Ray’s background in forestry, Ricklefs said Ray has learned the manufacturing side of the wood business, “just remarkably.” Ray has been working in forestry since 1981, and joined Georgia-Pacific’s timber division in 1984, where managed lands across the Pacific Northwest and California. When the timber division merged with Plum Creek in 2001, he joined the management team.

The short-term plan, according to Ray, is simple: “to continue to run plants as we are.”

“It is an extremely orderly transition,” Ricklefs said. “In many ways I think we needed that here given how much we’ve been through.”

As he prepares to leave, Ricklefs feels grateful to Plum Creek’s employees, who he said have shown flexibility and been forthcoming with ideas through the restructuring. And he appreciates the worker re-training programs at Flathead Valley Community College, made possibly by government assistance, for helping workers who lost their jobs find new options.

“We have appreciated the support of our employees as we’ve gone through all of last year,” Ricklefs said. “We really appreciate all of the support that we’ve had from the community in general.”

Ricklefs joined Plum Creek 23 years ago at the company’s Seattle office handling the marketing of lumber, plywood and MDF products. A Dartmouth College graduate, he and his wife, Sue, moved to Montana in 1995 where he ran the plywood business. He was appointed an officer of the company in 2003 and has held his current post since 2007.

As he turns to retirement, Ricklefs wants to get involved with economic development in the Flathead, and plans to find more outlets for nonprofit work like his seat on the board of North Valley Hospital, which he finds so gratifying.

“You get an awful lot of satisfaction and still get to use the business side of your mind,” Ricklefs said.

With his family in Montana, Ricklefs is pleased at the prospect of staying put and enjoying life in the Flathead.

“This is home for us,” he said, “and we want to stay here.”

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