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Mill workers turn nervous eyes to the future Timber costs more, there�s less of it, and owners fret over foreign competition and environmentalists By SHARI DOWNHILL Miles from the Wonder Bible Church and the Redwood Tavern across the West Fork of the Illinois River, Rough & Ready Lumber Company sawmill workers continue to do what they�ve done for 80 years � turn logs into lumber. The smell of fresh, damp sawdust and the scream of sawblades are a constant. Gone are the murky log pond and the cone-shaped teepee burner belching smoke. The uncertain climate of the timber industry is the biggest challenge facing Southern Oregon mill workers and owners alike � much different than in years when timber was readily available and not so expensive. Mill closures in the Rogue Valley 1989 � MedCo, Medford 1990 � STC Corp., Grants Pass 1991 � Murphy Creek Lumber Co., Grants Pass 1992 � DoubleD Lumber Company, Central Point 1993 � Miller Redwood, Merlin 1993 � Special Products of Oregon, Phoenix 1995 � Croman Corp., Ashland 1996 � Delah Timber Company, White City 1998 � Spalding & Son, Grants Pass 1998 � Burrill�s Lumber, White City 2000 � Central Point Lumber More than 170 years after the Northwest�s first sawmill began producing lumber in the Oregon Territory, Southern Oregon�s wood product mill owners and workers look to the future with trepidation � even in the state traditionally known as the nation�s top timber processor. Shriveling federal timber availability, skyrocketing energy prices and a drooping national economy have played a significant role in a recent rash of mill closures, production curtailments and timber worker unemployment. A flood of cheap Canadian imports looms in the coming weeks when the U.S.-Canada Timber Agreement expires. Because of subsidies, lax environmental laws and other advantages, Canadian lumber costs less than that produced in the United States. The timber industry also faces a persistent and powerful political foe � a sophisticated environmental movement grown savvy in politics and the courts. Today, companies that have failed to hedge against shrinking supplies of federal timber by securing their own private timber supplies have found themselves unprotected in a lethal business climate. Closure of mills like Medco in Medford and Spalding & Son in Grants Pass, and curtailments at Fourply Inc. in Grants Pass, Medply in White City and Superior Lumber in Glendale, among others, have left hundreds of workers out of a job. Lone survivor Jennifer and Link Phillippi are determined to keep the Rough & Ready Lumber Company solvent. Established in 1922 by Jennifer�s grandparents, Rough & Ready is the oldest family-owned and operated sawmill in Southern Oregon, and the only one left in Josephine County. Last year, the mill produced more than 50 million board feet of lumber, which was sold in the United States, Japan and Australia. That is 5 million board feet less than in 1995, and all of it came from private land. Operating in the Illinois Valley, Rough & Ready is the lone survivor of 27 mills that operated in the area in 1950. Within a decade, there were only four mills. In 1980, the mill started by Lewis Sr. and Helen Krauss stood alone, employing up to 225 people at the height of summer operation until 1990. Today, the mill employs 165 workers year-round. The heart of the issue Jennifer�s father, Lewis Krauss Jr., doesn�t talk a lot. What he does say flies straight to the heart of the issue. "It comes down to the log supply," he says. Fewer logs, less lumber. Lower sale prices, less profit. Higher cost of logs, even narrower profit margin. And then he leaves the room. The Phillippis stay. They talk of a shift in timberland management. They address challenges from their critics and question the logic behind a virtual lock-up of federal timberlands. They bring up computer-driven sawmills improving efficiency, and a skilled and loyal work force. Jennifer Phillippi also points to the timber industry�s move to adopt "green certification," designed to verify harvest practices as sound and sustainable. But "it�s basically spending money to prove we�re doing what we�ve already been doing under the Oregon Forest Practices Act," she said. "Public opinion has shifted from the positive to the negative regarding the (timber industry)," Link Phillippi said. "Over the past 10 years, forest practices have changed and we�re doing things much differently. "The thing is, the industry doesn�t get any credit for this huge shift in the way things are done today. Everything is criticized. Everything." Arguments that today�s timber industry continues to perpetuate the same logging practices of the past are wrong, Phillippi says. "The federal forests are begging for management," he said. "This industry can do it in a responsible way, improving forest health and providing wood products for the nation." Rough & Ready began purchasing private timberland in the early years, most recently acquiring 40,000 acres of Medco property. "Certainly, we saw the writing on the wall that federal timber levels were going to be reduced," Phillippi said. "We knew it was coming in the 1990s." The risk was taken based on the belief the mill would have access to at least a small, dependable amount of federal timber. Last year marked the first year Rough & Ready processed no trees from federal land. Rough & Ready continues to cut timber from private land and plant seedlings to replace what is harvested. "We operate sustainably, and we don�t harvest more than the growth on our private timberland," Phillippi said. Ken Cummings, Boise Cascade�s chief forester, agrees that closing off federal timber is doing more harm than good. "Biomass continues to accumulate (on federal timberlands) and now we�re losing it to fire, disease and insects," Cummings said. "The U.S. imports over half the country�s fiber needs while trees rot in our back yard. That�s crazy. "Our goal as a company has shifted away from the adversarial battle of the timber sale," he said. Instead, Boise Cascade is focusing on securing the timber it needs from the 142,000 acres of private land it owns in Southern Oregon, or from other private landowners. Boise Cascade also owns 2.3 million acres of timberland in North America. Boise Cascade employs 850 timber and mill workers at its four Rogue Valley facilities, said Bob Smith, human resources manager. Supply-side competition Walking through Boise Cascade�s Medford plywood plant, amid the roar of veneer dryers and production machines, Smith follows a yellow painted path designating the "safety zone." The building covers an area equal to two football fields. Back in his office, he points out that mechanization and automation have allowed Boise Cascade to expand operations and produce better products instead of displacing workers. Smith doesn�t revel in the closure of competing Southern Oregon mills. "There�s a certain synergy that exists with competition," he said. "That synergy results in improved product choices ... and leads to a larger number of qualified people working in the industry. When you have a job opening, it�s easier to find people with experience." Having competitors also means a better-equipped support industry and equipment suppliers, Smith said. "Now, we have to go to Portland and other cities outside this area to get the supplies we need to operate our mills. "You get to know the people working in this industry. And you never like to see them lose their job. " Either/or "America has been sold the �either/or� conversation," said Cummings, the Boise Cascade forester. "We either have clean air or industry. We either have clean water or power. We either have a healthy environment or timber. It just doesn�t have to be that way. The best companies, those who have survived, have figured out the �and� conversation." Many have not survived. Today, Rough & Ready in Josephine County and Boise Cascade in Jackson County are the last remaining operators of sawmills in the Rogue Valley. Remaining veneer mills and plywood plants include: U.S. Forest Industries, White City; Boise Cascade, Medford and White City; FourPly, in Grants Pass; MedPly, White City; Timber Products, White City & Grants Pass; Superior Lumber, Glendale (Douglas County). Boom and bust Veneer mills and plywood production plants throughout the region have been riding the ebb and flow of the timber market � some curtailing production, some shutting down and later reopening. Without fail, timber workers have been left standing with pink slips. They�ve grown accustomed to the economic roller coaster of boom and bust cycles. Some stay. Some move on. In his worn coveralls and pushed-back baseball cap, Carl Larsen spends his days amid the flying sparks and ear-splitting grate of bandsaw blade grinders. He has worked at Rough & Ready for most of his adult life. Larsen says he likes the work, the people, the industry. But there is uneasiness behind the big man�s clear blue eyes. This is what he knows. This is his world. He wants to believe things won�t change. The number of timber workers in the United States reached a peak in 1947 at 8.82 million, according to Guy Tauer, a work force analyst for the state Employment Department. In 2000, the number of timber workers dropped to 8.21 million while the nation added 140 million to its population over the last half century. Oregon timber workers numbered 81,000 by 1979, earning about $1.3 billion, according to Employment Department records. Jackson County employment reached an average monthly level of 4,800 timber workers for the same period with a total payroll of $94 million. Though the number of Oregon�s timber workers dropped consistently after 1979, average annual pay increased, climbing from $18,015 in 1979 to $33,991 in 1999. The Oregon Employment Department in 1998 produced a 10-year forecast anticipating a 2.4 percent decline in the state�s remaining 50,200 timber positions. That level was reached by 2000, eight years early, dropping to 49,000 jobs, Tower said. As of January, Jackson County timber positions had dropped to 3,670. "We didn�t forecast things like the spike in energy costs, the downturn in the price of lumber, ... and a market flooded with cheaper imports," Tower said. About 1,200 displaced timber workers in Jackson and Josephine counties have received financial and career retraining assistance from The Job Council since 1988, said agency director Bruce McGregor. About 45 percent of the workers sought immediate job placement, while 55 percent pursued career retraining, McGregor said. The Job Council has received $5.1 million in federal grants to help former timber workers. Still, college students continue to sign up for forestry programs. Oregon State University�s College of Forestry confirmed that enrollment in timber-related programs has decreased only slightly over the past decade. About 420 students were enrolled in forestry programs in 1990, compared to 385 in 2000. Federal, state and private industry recruiters continue to look to OSU and other forestry schools to fill the shrinking ranks of qualified workers. Regardless of the number of young workers willing to enter the industry, with so many Southern Oregon mills closed, the loss of skilled timber workers and infrastructure will be difficult, if not impossible, to rebuild and replace. The bottom line The success of Southern Oregon�s timber industry depends largely on whether federal timber is released for cutting, Cummings and others maintain. That, the Phillippis say, will happen only if the public stops accepting preservationist rhetoric without questioning its validity. "The environmentalists have the luxury of this very emotional discussion, which is easy. It�s sexy," says Jennifer Phillippi, the granddaughter of Rough & Ready�s founder. "We have a very technical, boring story to tell. I just wish people would listen and pay attention." "It�s a question of whether (federal agencies) have the institutional will to make something happen," said Cummings, the forester. "I think there�s always going to be a timber industry," said David Schott, a 25-year veteran timber broker in Medford. "It�s just going to be concentrated into the hands of fewer and fewer. "That will give the (remaining mills) the luxury of slowing down production and raising prices. In the long run, it�ll hurt the consumer because of the lack of competition, quality and higher prices. There won�t be much choice." Reach reporter Shari Downhill at 776-4463, or e-mail [email protected] Mail Tribune Home | Ottaway Newspapers, Inc. | Dow Jones & Co., Inc. | Privacy | Contact Us Copyright � 2001 Mail Tribune, Inc.