Another Oregon mill has closed.
In a document delivered to the Oregon Department of Community Colleges and Workforce Development, Steve Lyon of Boise Cascade has announced the closure of its La Grande pine lumber mill in La Grande sometime between June 28 and July 12, according to a letter sent from the company this week.
The closure will mean 120 workers will lose their jobs.
The company's northern Washington mill at Kettle Falls, which employs 18, also got the axe - an action expected since last October when a shift at the mill was cut, taking 23 jobs. The Island City particle board plant closed last year, ending approximately 30 jobs.
The closures are not considered permanent according to Tom Insko, region manager for Boise Cascade's Inland Region of which the La Grande and Elgin mills are a part. "At this point we aren't doing a permanent closure," he said. "However, the reality is they're going to be down for a long period of time."
Failed negotiations with the union was one of the factors for the closure, said Insko, but not the only factor.
"There are two primary drivers in our industry, market and log supply," Insko said. "Housing starts are down from 2.1 million in 2005 to below 500,000 this spring. But log supply has been the really difficult dymanic."
Insko said that the Forest Service's inability to harvest forest lands really hurt the mills. "If we have to continue to travel 150 to 200 miles to procure the majority of our logs, that's a problem," he said.
The Elgin plant continues to operate at a reduced level. According to Insko the stud mill lost a shift in April (approximately 30 jobs). "The plywood plant continues at full operation at this time," said Insko. "(However,) we've been taking intermittent down times at Elgin, about one week a month, since last December to respond to market."
The loss of the La Grande lumber mill, which processed approximately 90 million board feet of lumber per year, will hit the local timber economy hard, said Tom Zacharias of Pro Thinning in Joseph. "There are the same number of loggers left, but one-third less market for the wood," he said. Seth Zacharias pointed out that the closure of the La Grande Mill would seriously hurt northern Idaho loggers as well. "They delivered a lot, a lot, to that mill," he said.
Loggers from Wallowa County also sell logs to Kinzua Resources of Pilot Rock. That mill, which cuts 99 percent pine, is still in operation and buying, said Kinzua log buyer Tony McKegg.
McKegg grieved the loss of "any mill," he said, but also said his company would probably pick up some work as a result. "I would think there will be more logs available for us," he said. "It's still going to be tough with this poor market. There's no question there's a danger of any mill closing. It's really tough. We're in a very good position and I don't think it's going to happen to us, but there are no guarantees."
The news gets worse, according to Nils Christoffersen of Wallowa Resources, who reports that
"With the La Grande Pine mill going down we've lost our closest and best pine mill for Wallowa County," Christoffersen said. "It's a big blow, particularly to private land owners who own lower elevation properties where the large pine grows. As we lose these markets it has a big impact on the value of forested lands. It's a blow to the loggers, the truckers, and the county as a whole. The number one goal of the county's strategic plan was to maintain the natural resource economy."
The lumber industry as a whole is suffering decline with demand expected to fall to it's lowest point in history this year, according to industry sources.
Boise Cascade, LLC, reported a loss of $31.5 million for 2008. The closure of the White City plywood operation announced in January, which ended 32 jobs, accounted for $7.5 million of that amount according to an investor report released on March 10.
Another Oregon-based company Hampton Affiliates, announced it would cut 275 jobs at the Tillamook and Willamina, Ore. and Darrington, Wash. mills this April. Weyerhauser cut jobs at two Oregon mills, 59 jobs in Warrenton and 67 in Dallas, earlier this year.