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1 of 3 Premium Clicks used this month SUBSCRIBE Print + Online Subscriber Activation | Register x Forgot Password | Need an Account? e-edition | subscribe | newsletter | deals Classifieds Jobs Autos Real Estate FEATURED » NEWS NOW Kasich dropping out, AP sources say; Trump on clear GOP path ... AP: Oregon health insurers plan to raise rates in 2017 ... Lawyers make final points in Ashland Little Caesars arson case ... Kasich dropping out, AP sources say; Trump on clear GOP path ... AP: Oregon health insurers plan to raise rates in 2017 ... Lawyers make final points in Ashland Little Caesars arson case ... 110 jobs lost in White City Housing market collapse cited as culprint as Boise Cascade announces closure of plywood plant Housing market collapse cited as culprint as Boise Cascade announces closure of plywood plant. Comment By GREG STILES MailTribune.com By GREG STILES Posted Jan. 9, 2009 at 12:01 AM Updated Jan 9, 2009 at 12:32 AM By GREG STILES Posted Jan. 9, 2009 at 12:01 AM Updated Jan 9, 2009 at 12:32 AM » RELATED CONTENT Boise Cascade's White City plywood plant is cap... --> Housing slump hit plywood plant from two sides The plywood plant on 73.5 acres along Antelope Road in White City began production in 1962. Boise Cascade bought the mill from Gold Rey Forest Prod... » Read more X Boise Cascade's White City plywood plant is capable of producing enough panels for 21,000 average-sized houses per year. Housing slump hit plywood plant from two sides The plywood plant on 73.5 acres along Antelope Road in White City began production in 1962. Boise Cascade bought the mill from Gold Rey Forest Products in 1977. Bob Smith, Boise Cascade's Western Oregon Region spokesman, said the decline in the residential housing market was manifested in two ways. A half-century ago, the average house in the U.S. was 1,100 square feet, according to research in the Journal of Industrial Ecology. In this decade, the average house is between 2,300 and 2,400 square feet. National Association of Home Builders figures show a typical 2,082-square-foot home requires 11,550 square feet of plywood or oriented-strand board. "Not only has the number of new housing starts dropped, but the size of the homes today is bigger than during the last recession," Smith said. "So, it's a double-whammy relative to wood products demand when housing starts drop. For example, it probably takes as much or more wood to build a single-family home on upper Hillcrest today as it did to build two homes closer to the older sections of Medford." As a result, he said, declining housing starts have a bigger impact than 20 years ago. • Boise Cascade » Social News WHITE CITY — The imploding residential housing market dealt Boise Cascade's White City plywood plant a fatal blow Thursday. The worst year for housing starts in post-World War II America led the Boise, Idaho, wood products firm to announce it will close the Antelope Road plant and lay off 110 workers on March 13. "Personally, I never thought we'd see anything as significant as the early 1980s," said Bob Smith, human resources manager for Boise Cascade's Western Oregon Region, referring to the last deep recession. "But I think we're now in a down cycle that is worse." Smith has charted U.S. housing starts all the way back to the 1950s. The record high of 2.357 million starts in 1972 and the more recent 2.068 million starts in 2005 are duly marked, as are downturns of 1966, 1975, 1982 and 1991. None of those declines, however, compare to 2008, when new starts plunged to fewer than 700,000. "Our employees are generally understanding of the economic environment the nation is in right now," Smith said. "We were hopeful of a rebound more quickly than there has been." Boise management broke the news to graveyard and day-shift workers Thursday morning and met with swing-shift employees in the afternoon. Employ tenure ranges between 18 months and 42 years, Smith said. About half of the rank-and-file have been with the company 10 years or more. "A lot of the folks haven't been through this before," Smith said. "So it is new for them. We've kept employees — whether (in White City) or elsewhere — up to date with the current state of home construction and how our business directly relates to that. I'm sure the general state of the housing economy has been a topic of break-room conversation over the past few months." Although the plant on Antelope Road hasn't run at full capacity for many months, Smith said, the first work curtailment was in October. Employees who stay with the company until March 13 will receive severance pay based on their length of employment and continuation of group insurance coverage paid by the company. Hourly and maintenance employees with 30 years or more with Boise will receive unreduced early retirement pensions. "If any of the employees have an opportunity to accept another job before March 13 or relocate elsewhere, that will be up to them," Smith said. "Each employee will have to do what's in their own self-interest; it's not a fun experience to go through." It's uncertain whether government benefits for workers whose jobs are lost because of foreign competition will be available to Boise employees. "In the current economic situation we're not directly competing with imports," Smith said. "But I'm sure we'll participate in any application process available so the appropriate government agency can make that determination." While the announcement was not surprising, it does have ramifications beyond Boise Cascade's gates. "It's a real tragedy," said Ron Fox, executive director of Southern Oregon Regional Economic Development Inc. "Unfortunately, it's following on the heels of other wood production layoffs or closures." Just as new manufacturing jobs have a multiplier effect that expands a local economy, the loss of industrial wages can work as a maelstrom. "It varies in each case, but for every primary job, there are one-and-a-half to two times as many jobs affected," Fox said. "That mill was supported by people who harvest and transport trees and process the lumber." Boise Cascade presently employs 4,669 and operates 14 plants in four states and another 30 materials distribution centers, said John Sahlberg at Boise Cascade's home office. "Virtually all of our facilities are running at reduced capacity," Sahlberg said. Boise will continue to operate a veneer mill and an engineered wood products plant in White City, as well as a plywood mill in north Medford. Boise currently employs 755 people in the Rogue Valley. Plywood panels produced in White City are shipped down the street to Boise's engineered wood products operation, where they are used in making structural beams and I-joists. Smith said Boise's larger Medford plywood plant can sufficiently meet those needs. Smith said the closure is considered permanent and deemed fairer to employees than repeated curtailments in light of the residential construction industry's dim outlook. Even non-residential projects are lacking, according to forecasts released Thursday by the Associated General Contractors of America. An estimated two-thirds of the nation's non-residential construction companies are planning to cut their payrolls this year. Those layoffs are forecast to result in a 30 percent decline in the number of people working on construction projects. During the past two years, Boise Cascade announced three other plant closures, including its White City sawmill operation, which halted operation last March, putting 32 employees out of work. In January 2007, a veneer mill in Independence closed, putting 29 people out of work. Last September, Boise said it would shutter a veneer plant in St. Helens, with 36 employees, early this year. Sahlberg said costs, productivity and efficiency determine which plants are closed. "If you look around there are always regional issues such as wood supply," Sahlberg said. "If you are making plywood in the south versus White City, obviously wood supply could be an issue and we're primarily focused on costs." Wood supply and availability contributed to last March's closure of Boise's White City pine sawmill. In addition to the Medford plant, Boise manufactures plywood in Elgin (outside La Grande), Kettle Falls, Wash., Florien, La., and Oakdale, La. "White City has been a good facility with great people," Sahlberg said. "We're really in an unprecedented market. It's very unfortunate that we have to take out a good facility like that. It really is market driven — we'd love to keep it running but it doesn't make sense." Reach reporter Greg Stiles at 776-4463 or e-mail [email protected]. By GREG STILES MailTribune.com By GREG STILES Posted Jan. 9, 2009 at 12:01 AM Updated Jan 9, 2009 at 12:32 AM » Comment or view comments Reader Reaction » STAY INFORMED Email NewsLetter Sign Up Today Sign up for our newsletter and have the top headlines from your community delivered right to your inbox. Southern Oregon Directory Featured Businesses Loading... 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