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Struggling mill will lay off 89 Mail Tribune photos by Jim Craven Central Point Lumber will remain open through August to finish turning logs in its existing deck into studs. When the logs are gone, the mill will close. Central Point Lumber owners hope to reopen By David Preszler CENTRAL POINT � After a monthlong layoff in July that he says strained his marriage, Medford�s John Prevatt was ready to get back to work at Central Point Lumber Co. But on the first day he and other employees returned last week, they were hit with a bigger blow: A layoff that could last six months or longer. "That was a bitch," Prevatt said. The mill, which has 89 full-time employees, will shut down indefinitely at the end of August. "We are going to shut down the facility for a prolonged period � probably six months," said Dan Page, the stud mill�s general manager. Company officials blamed the closure on sharp drops in the price of lumber in recent months. Those drops are tied to rising interest rates, which have slowed new housing construction, and to an oversupply of lumber on the North American market. The mill, off North Pacific Highway in Central Point, shut down in July because of those weak market conditions. The hope was that the market would stabilize, but it hasn�t, company officials said. So the mill will run one shift five days a week during August � working its way through the existing log deck � before shutting down. Prevatt and co-worker Steve Creech, who work on the mill�s planer crew, said they plan to hunt and wait before deciding what to do next. They said they were told the layoff could be as short as a month. "I�m just going to do my own thing and wait and see what happens," says Prevatt, who is living in his parents� guest house following the apparent break-up of his marriage. He says being home last month strained the relationship. Things will get tough should the layoff stretch to, say, two months, Prevatt said. "I can�t survive like that," he said. Creech, who�s been with Central Point Lumber almost four years and in the industry 14, says he�s been through these things before. If the layoff lasts, he said he might be through with the lumber industry. "If I end up getting another job, I�ll just get out this business altogether," he said. One industry watcher said the odds of the mill reopening are about 50-50, and some employees said there are rumors it won�t reopen. "Hopefully, they will come back," said Dave Hill of the Southern Oregon Timber Industries. "We need them." The mill is owned by financially troubled TreeSource Industries. Last year, the Portland company filed for bankruptcy for the second time in the 1990s. This mill has seen its share of instability over the past two decades. It has closed twice and been owned by Cheney Forest Products, Louisiana Pacific, Cornett Lumber and WTD Industries, which became TreeSource. If Central Point Lumber doesn�t reopen, Hill fears the local industry may suffer long-term consequences because the mill processes a lot of smaller logs � 12 inches in diameter or less. Citing a recent study, he said there are an estimated 6 billion board feet of small-diameter logs on federal lands within the Rogue River National Forest, the Siskiyou National Forest and the Medford Bureau of Land Management district. He expects at least some of that to be harvested, once the political climate and market allow for it. "When you lose a mill like Central Point Lumber, you lose that ability to process it locally and have it contribute to the local economy," Hill says. Jess Drake, TreeSource�s president and chief executive, said prices have fallen as much as 50 percent in recent months and raw material prices haven�t dropped nearly as fast. TreeSource has eight mills; two others, in Philomath and Burke, Vt., are closed and up for sale. The Central Point mill hasn�t been formally put on the block but Drake didn�t rule out a sale. Some job reductions have been made at the TreeSource stud mill in Glide, but it will continue to operate. Another plant is in the midst of a two-week closure. TreeSource is one of many timber companies scaling back because of prices, according to Butch Bernhardt of the Western Wood Products Association. "We have, in the past couple of months, seen some closures and some market-driven shutdowns," said Bernhardt. Western Wood Products Association�s composite price index for Douglas fir � the dominant species for western mills � showed a June price of $338, down from $442 in June 1999. Because of higher interest rates, Bernhardt said, single-family housing starts are off 3.2 percent so far this year, which has softened lumber demand. But demand is coming off three record years, so mills upped their production in the first half of 2000. Production has risen sharply at mills in the south and in Canada, as well as the West. That combination of softer demand and added supply has depressed prices, Bernhardt said. Page, the Central Point mill�s manager, called the recent lumber prices "very scary" and said he�ll do whatever he can to minimize the layoffs. Still, he didn�t sound encouraged. "In the best of all worlds, this would be a very short layoff," he said. "It probably is not going to happen." Obituaries | Sports | Business | Classifieds | Tempo | Prime Times | So Oregon Sites | Outdoor Journal | Subscribe | Contact | Movies | Advertise | Real Estate Showcase | Archive | Editorials | Letters to the editor | Religion | Wake-up Call | NIE | Cyber Chef | Job Network | So Oregon Weather | WSJ Northwest | Forums | AP Wire | AP Money | F.A.Q. | Awards Ottaway Newspapers, Inc. The Community Newspaper Subsidiary of Dow Jones & Co, Inc Copyright �The Mail Tribune 2000, Medford, Oregon USA