Mill Closures ‘Heartbreaking,’ but Not Surprising

Citing log shortage, Weyerhaeuser will close two mills while workers remain hopeful

By Tristan Scott
Weyerhaeuser Company announced on June 22 that it plans on permanently closing its lumber mill and plywood mill in Columbia Falls. Beacon File Photo

The announcement Wednesday that timber giant Weyerhaeuser Company was closing two mills in Columbia Falls and eliminating 100 positions is a gruesome testament to the flagging timber industry’s struggle to regain footing in the market after decades of decline.

Blaming the closures on the ongoing log-supply shortage, company officials said the decision was difficult but necessary, and denied that it was part of a blueprint for consolidation drawn up when Weyerhaeuser absorbed Plum Creek earlier this year.

But timber executives and forest managers say they are not surprised by the cuts given the constraints foisted on the beleaguered wood products industry, with the most pointed barbs aimed at a hamstrung National Forest System and the persistent litigation of timber sales, which can stall a project for three to five years.

“Given the short timber supply and the litigation mess, Weyerhaeuser had to make the decision they made and it did not surprise me,” Julia Altemus, executive vice president of the Montana Wood Products Association, said. “It is unfortunate, and I hope it won’t happen to other mills. But without significant changes in forest management that is always a possibility. We are sitting in a wood basket but we don’t have access to the supply.”

In Northwest Montana, 80 percent of forests are managed as federal lands, but account for just 12 percent of the state’s lumber production, an inverted equation that isn’t sustainable, according to timber managers.

“When you source 12 percent of your wood from 80 percent of the ownership, there is definitely a problem,” said Chuck Roady, director of F.H. Stoltze Land and Lumber in Columbia Falls. “Private lands represent 20 percent, so they are bearing a hugely disproportionate share of the timber harvest. It’s only a matter of time before that catches up to you, and that is why the mills are closing.”

Stoltze is no stranger to cutbacks, and in 2014 was forced to reduce production and lay off employees due to the log-supply shortage, the most significant reduction it had incurred in years.

“I am sitting here facing the exact same decisions [as Weyerhaeuser],” Roady said. “We haven’t run at full-throttle since last year, and these mills are not designed to run at half-throttle. It’s just not efficient, but we don’t have the logs. And what’s most frustrating is that we are surrounded by trees. They are everywhere.”

Still, other factors have figured prominently into the industry’s decline statewide, and at Plum Creek, liquidation of its land and a legacy of unsustainable harvesting practices combined to create a deficit of available timber for its mills.

“Certainly we had indicators that these were not sustainable harvesting operations occurring on Plum Creek lands,” said Bob Harrington, forestry division administrator for the Montana Department of Natural Resources and Conservation. “They were harvesting far in excess of what was sustainable on those landscapes.”

They were also liquidating vast swaths of private holdings.

A decade ago, Plum Creek held 1.3 million acres of land in Montana, but as a real estate investment trust, the company also sold or traded more than 500,000 acres for housing, recreation and conservation if it was not productive for timber.

“That change in the land base has definitely impacted the timber availability. It’s not just the federal issue,” said Todd Morgan, director of Forest Industry Research for the University of Montana Bureau of Business and Economic Research.

The company realized significant profits from land sales as it liquidated prime pieces of real estate, which were subdivided for coveted second-home getaways.

But Harrington said “a complex sequence of events” combined to stagger the industry, and cautioned that rooting out a single cause or searching for a silver-bullet solution is a fool’s errand.

Instead, stakeholders from all corners will need to commit to hammering out a solution, or the challenges facing natural resource management will continue to stack up.

“Even though the prospect of people losing their jobs is heartbreaking, a lot of us in the profession have seen these indicators for a long time, and we’ve known that at some point, something was going to give,” he said. “It’s heartbreaking, but a lot of us saw this coming.”

A witch’s brew of misfortune has cast a spell on Montana’s timber industry, creating a multifaceted problem that was recently compounded by the expiration of the softwood lumber agreement – the Canadian tariff put in place in 2006 to balance out the lopsided endeavor of competing with cheaper Canadian lumber, which has flooded the market in the United States.

In the last 40 years, Montana’s timber industry has downsized considerably.

Lumber production across the state has dropped from a record high of 1.6 billion board feet annually in 1986 to around 600 million last year. The number of sawmills across the state, from small operations to large facilities, has shrunk from 150 facilities to less than 30. The industry employment dropped from 10,695 workers in 1994 to barely 7,000 a year ago.

At Weyerhaeuser, the closures of its lumber mill and plywood mill are expected to take place in late August or early September, according to company officials.

Employees at the two mills were given 60-day notices at 3 p.m. on Wednesday, when company brass explained that they would have the option of applying for positions at its lumber and plywood mills in Evergreen or its medium-density fiberboard plant in Columbia Falls. Those mills could absorb about 130 of the 230 employees affected by the closures, while 100 jobs would be eliminated.

Don Leitz, a block-saw operator who has worked at the plywood plant for 28 years, said he was hopeful to find another job with the company, but hope doesn’t relieve the heartburn of being cast into uncertainty.

“You have a job for a lot of years, and it’s a secure feeling,” Leitz said. “And it’s not so secure right now. Plum Creek was good to me for a lot of years. This job supported my family, so I’m going to keep a positive spin on this and hope that it opens some new doors. I’m going to show up to work every day and do my job.”

Ever since the Weyerhaeuser-Plum Creek merger four months ago, mill workers have been anticipating cuts, Leitz said; however, they didn’t expect them to come down the pike this soon.

“We knew it was coming, but we didn’t know it was coming this soon,” he said. “I thought I had a year, so it was a hard thing to hear.”

Roady said laying off mill workers and paring back operations is a gut-wrenching decision for mill operators, but in the context of the current climate of forest management, it’s a reality.

“I hope I don’t die before I see some improvement of how we manage our federal lands,” he said.