On regurgitating Stimson lies, false economic development and Affordable Housing

by jhwygirl

In a short brief today, KPAX reguritates Stimson’s allegations that they “have no timber.”

Is there not one – even one? – news agency that will question the truth to that claim?

There are no where near the number of lumber mills that there were decades ago – so while there is certainly less trees being cut that there was in the early 1900’s, there are still trees being cut – anyone can see even the nominal amount that private landowners and agencies allow you to see along the highway – but think about the stuff beyond that view that it cut. Annually. Who is left to process it?

Plain and simple – to accept that Stimson has no lumber purely because they say so is wrong. It is lazy, frankly. There are private and large landowners that cut their lands. There is the Federal Government – including BLM and the USFS – and there is the State. Has any news agency gone to the large landowners (Plum Creek Timber comes to mind, plus some larger ranches) or the BLM or USFS or the State to see what – if any – sales that Stimson has put in on in the last 3 years or so (since they began laying people off saying they didn’t have any timber)? Has any news agency looked at how competitively Stimson actually pursued actual tree sales? Has any news agency looked into who got the sales that Stimson – if they even went for them – didn’t get?

At least look for the truth. Isn’t that what news reporting is about? Or at least supposed to be about?

{sigh} I guess Stimson is going to do what it is going to do and people are just going to sit by and not try to save and industry that supports not only the 125 or so people that it still employs, but the multiple industries that it supports in periphery to its operations. Guess it’s all Burger Kings and Walmarts. The bottom of the economic food chain, as it were. Yee haw!

The KPAX news piece details the plans of the Missoula businessman and developer Scott Cooney who is hoping to purchase the entire Stimson site, with hopes for developing “affordable housing and stores like L.L. Bean and Cabella’s.”

Cooney also recently announced his purchase of 16 acres of Stimson land south of the ballfield in Bonner, which includes the row of “company houses” and the credit union. His purchase also included 133 acres across the river from the mill site.

(Did someone just say Cabella’s? In Missoula?)

But seriously.

Is Missoula destined to service industry “Missoula Minimum Wage” $9/hour jobs? Are we – Should we? – be content with that? Should we champion the building of shopping centers and wave-off good paying industrial jobs with a mere lament that Stimson was “once the largest plywood mill in North America with over 1000 employees”?

Or should we not be seeking out a better long-term solution which includes higher-paying jobs (tech industry anyone?) that would offer better economic solutions to the community, with jobs that would actually afford the median home price of $209,000?

Lord knows I’d gladly welcome – champion – more affordable housing in Missoula, but that term (affordable) is tossed around so frequently here, without any true reference to the real definition of affordable, and the term is so willingly gobbled up without any scrutiny or follow-up, I will ask that you please excuse me as I dish out my skepticism about Mr. Cooney’s proposal.

Affordable? On the riverfront? Along with Shopping-Center Missoula-Minimum-Wage jobs?

So what Cooney is going to do is build more commercial which will create more minimum wage – i.e., less than the median income – jobs that will place greater pressures on an already pressured housing market that already isn’t providing enough affordable housing to the Missoula Minimum Wage earners? And to make everyone feel good we will say that we are going to do some affordable housing, but what we really mean is that we might build some homes that sell at the low end of market, yet still don’t actually sell at what would meet the HUD definition of affordable? Homes that won’t be affordable to that family in Missoula that is making the median income of $54,500 (family of 4, 2007 HUD data)? That won’t sell at a price that can be purchased by the median wage of the jobs that will be created?

A truely affordable home for a family of 4 – (3-bedroom) would be sold at approximately $160,000. How many of those are available right now? Homes that include the land underneath it (i.e., not the additional cost of the lease for the lot + the uncertainly that a leased lot brings)? Homes that don’t include that additional burden of condominium HOA fees which push that whole affordability thing (once you take the cost of mortgage + HOA fees + utilities) out of range?

And what about those young couples starting out – those two-person households with an even lower median income?

Not trying to be too picky here – but there is a definition of affordable housing. The confusion begins when we start to toss it around as lightly as has been done – without any responsibility to the true meaning of the word.

Missoula already faces a deficit of housing affordable to median wage families. The housing agencies only service those making up to 50% of the median. We’ve got a problem. So what Cooney wants to do is create more minimum wage jobs that create a greater need for housing and then he promises some housing that – call me a skeptic – won’t really be affordable because the simply law of supply and demand will kick in and the developer will take whatever he can get for the homes, not what is truely affordable to the median income families here in Missoula, yet alone the people who will be working there.

Exactly what is the unemployment rate here in Missoula? Do we really need more less-than-median-wage earning jobs? Is that economic progress?

What really gets me is that elected officials – local and state and federal – will fall all over themselves in the name of ‘affordable housing’ and ‘economic development’ without actually running the numbers. Some communities would – and should – willingly welcome a development like that which Cooney is proposing – but Missoula shouldn’t be one of them.

If you ever wondered how Montana continues to be at the bottom of the list when it comes to the median wage here in the good ole’ U. S. of A., while our politicians – both Democrats and Republicans – continue to tell us that Montana’s economy is growing – think about economic progress plans like those being bandied about out there in Bonner and wonder no more.

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  1. Matthew Koehler

    Looks like Stimson Lumber Co is going the way of Plum Creek and getting into the real estate development game realizing that more money can be made selling and developing land than cutting trees and making 2 x 4’s or sheets of plywood.

    This article below details Stimson’s real estate development efforts in Oregon, including their nearly 1/4 million dollar campaign contribution to fight land use planning efforts. Is it too far fetched to think Stimson CEO Andrew Miller hasn’t thought about they money that could be made developing the Bonner mill site (ie lucrative riverfront property) or their Montana forest holdings? I think not.

    But hey, you can always blame the enviros why you laugh all the way to the bank, right Andrew?

    ——-

    Stimson Lumber donates $200,000 to fight Measure 49
    Land use – The Portland-based company has filed the state’s largest Measure 37 development claims
    Tuesday, October 02, 2007
    ERIC MORTENSON
    The Oregonian

    Portland-based Stimson Lumber Co., which has filed the state’s largest Measure 37 development claims, has contributed $200,000 to a campaign to defeat Measure 49, which would limit development allowed under the 2004 property rights initiative.

    Contributions by Stimson and other timber companies, reported Monday under the state’s campaign finance law, pushed Oregonians in Action to $1.15 million in contributions.

    Oregonians in Action, based in Tigard, sponsored Measure 37 three years ago and opposes Measure 49, which is on the November ballot. The group reported spending $994,972 on the campaign through Monday.

    Stimson’s contribution is the largest single donation Oregonians in Action has reported in the current campaign.

    “This is consistent with Stimson’s very public plans to convert forests into subdivisions,” said Shelly Strom, Yes on 49 spokeswoman. “Of course they are contributing to the campaign; they stand to make a lot of money on these subdivisions.”

    Yes on 49 said a search of records in six counties shows that Stimson has filed claims totaling 59,428 acres. Claims the company has filed with the state Department of Land Conservation and Development affect a total of 109,875 acres, according to Yes on 49.

    Stimson CEO Andrew Miller called those figures “preposterous.” He said Stimson’s Measure 37 claims involve about 57,000 acres. Either figure is the state’s largest in terms of acreage.

    “They’ve got us painted as if we’re going to urbanize the Coast Range,” Miller said. Stimson has pursued only one development, Miller said: the 1,200-acre Iowa Hill project in Washington County, where the company hopes to build 40 homes.

    The other claims ask the counties to roll back land-use regulations involving income requirements and minimum lot sizes, but Miller said those are “placeholder” claims intended to give the company options in the future. Stimson has no plans to develop its timber holdings, he said. “We know what it’s worth growing trees; we’d be fools to do anything else with it.”

    Measure 37 allowed property owners to seek compensation if land-use rules imposed after they bought the property restricted its use and reduced its value. That prompted about 7,500 claims for subdivisions and industrial and commercial development, most of it on rural farm and forest land.

    Supporters of Measure 49, referred to voters by the 2007 Legislature, say it would allow claimants to build one to three home sites on a fast-track basis or four to 10 home sites if they can prove that land-use regulations devalued the property. The measure prohibits industrial and commercial development.

    Both sides have reported more than $1 million in contributions. Yes on 49 listed $2.78 million in contributions and $1.49 million in spending through Monday.

    Seneca Jones Timber of Eugene; Swanson Group of Glendale, a wood products company; and A-dec Inc., a Newberg company that makes dental office equipment, have each contributed $100,000 to Oregonians in Action. Hire Calling, a Utah-based employment agency, also contributed $100,000.

    Other wood products firms listed as contributors include Freres Lumber, C&D Lumber, Murphy Hardwood Plywood Division, South Coast Lumber Co. and Cascade Timber Consulting.

    ©2007 The Oregonian

  2. Reader

    The answer to your question, jhwygirl, is: Yes. At least one “news agency” is willing to question Stimson’s claims — and has done so. This article, for instance, ran on the front page of the Missoulian on Sunday, May 27.
    Stimson: Cutting back in Bonner
    Company passed on timber sales
    By PERRY BACKUS of the Missoulian
    When Stimson Lumber Co. announced its decision to close the Bonner plywood plant almost three weeks ago, it placed the blame squarely on “chronic, long-term log shortages in western Montana.” But a review of U.S. Forest Service records shows that Stimson either did not bid on national forest timber sales in the region or was not competitive enough to purchase those sales in recent years. “I know we try to buy logs in our price range,” said Jeff Webber, Stimson’s vice president of manufacturing. “If the minimum prices are too high, we don’t bid.” According to Forest Service records and officials, Stimson only bid on a handful of timber sales over the last three years. It was successful one time. The last time Stimson successfully bid on a national forest sale in Montana was in October 2004, when it offered almost $350,000 for 1.9 million board feet on the Lolo National Forest near Seeley Lake. Since then, the company bid on a few timber sales offered by the six nearest national forests. In 2004, its bids were competitive. Since then, many of its bids weren’t even close to the going rate for timber on federal lands. Stimson offered $58,000 for a sale won by Plum Creek Timber Co. for $144,000 on the only Lolo National Forest timber sale it bid on during 2005. The last time the company bid on a Lolo forest sale was in July 2006. Stimson offered $339,948 for a sale purchased by Pyramid Lumber of Seeley Lake for $1.5 million. Jim McCormack, the Forest Service’s timber sale contractor for the Lolo and Bitterroot national forests, said Stimson hasn’t purchased a timber sale on the Bitterroot since 2002. McCormack said the company has probably received some timber from smaller contractors, but Stimson’s bids for timber sales on the Bitterroot haven’t been competitive recently. Seeley Lake’s Pyramid Mountain Lumber Co. continues to be very active in buying sales on the Bitterroot National Forest, he said. Logging trucks hauling timber to Pyramid Lumber would have to drive right by Stimson on their way to the Seeley Lake mill. Fuel prices are a driving factor in which mills are bidding on national forest timber sales, McCormack said. Stimson bid on a single sale in the Beaverhead-Deerlodge National Forest in the last couple of years, said Rick Henningsen, that forest’s timber management officer. The company made an initial bid of $87,000 on the 17-million-board-foot Butte Salvage Sale, but didn’t take part in the oral bidding that eventually pushed the price up to $1.5 million by RY Timber of Livingston. That sale is now tied up in litigation. “Stimson has been over and looked at a lot of sales, but they haven’t bid on many,” Henningsen said. “Our average sale is 3 million board feet and may be too small to work economically for them.” The last time Stimson bid on a sale on the Helena National Forest was 2005. It wasn’t successful in that attempt. Webber said the company procures its timber from a variety of sources, including sales from national forests, as well as industrial and nonindustrial timberlands. The company’s log-buying decisions are based on price, species mix and log characteristics. The company doesn’t have to directly buy national forest timber sales to get logs from federal lands, he said. Federal timber sales are sometimes purchased by independent contractors, who in turn sell those logs to mills like Stimson. “A lot of times we get those logs anyway,” Webber said. In its recent closure announcement, Stimson said it has been forced to import 60 percent of its wood for the Bonner plywood plant from the West Coast and Canada because of dwindling local wood supplies. Stimson bought the Bonner mill in 1993 from Champion International Corp. Plum Creek Timber purchased Champion’s timberlands at the same time and struck a deal to supply Stimson with 1 billion board feet of timber for a decade. After that deal concluded in 2003, Stimson had to look for timber on the open market. Now the log yard at the Bonner mill is nearly empty. Webber said work at the company’s stud mill has been curtailed for nearly three weeks because of a shortage of logs. Stimson announced it would restart this week, but Webber said the unsettled weather of late has made it difficult to get logs into the mill and that may push the reopening back again. Even with the closure of Bonner’s plywood plant, Webber expects the log supply to remain tight in Montana – and therefore stumpage prices to stay high. “If price was no objective, then our log yard would be filled,” Webber said. “The lumber market is very cool right now and that does impact what we can afford to pay.” Montana’s mills will likely continue to face challenges with log inventory, predicted Charles Keegan, director of forest industry research for the Bureau of Business and Economic Research at the University of Montana. Currently, about 700 million board feet (mbf) of timber is cut annually in Montana from various sources, Keegan said. In 2005, about 233 mbf was harvested on industrial timberlands, 196 mbf on nonindustrial lands and 143 mbf on federal lands. With the closure of the Bonner plywood mill, Keegan said there’s probably enough timber to supply the remaining mills in Montana if the Forest Service continues to supply the same amount of timber. That could be a big if. “It appears to me that the Forest Service has sold just about nothing this fiscal year,” Keegan said. Bruce Fox, the Forest Service’s Northern Region director of forest and range, said much of the region’s timber sale program is locked up in appeals and litigation. In July 2006, 528 million board feet of timber sales on Northern Region forests were either tied up in court or were being challenged through appeals, Fox said. That volume was nearly double the 262 million board feet of sales under challenge in February 2005. “That’s more than two years of our timber program that’s tied up in appeals and litigation right now,” Fox said.

  3. Another Reader

    From: http://www.newwest.net/city/article/why_the_layoffs_at_the_bonner_mill/C8/L8/ .

    Apparently the Missoulian needed nearly a whole month of prodding before they finally took a truthful look at the Stimson issue.

    Date: Tue, 8 May 2007 08:20:10 -0600
    To: pbackus@missoulian.com, john.vanstrydonck@lee.net, tyler.christensen@lee.net, Sherry.Devlin@lee.net, oped@missoulian.com, Michael.Moore@lee.net,
    From: Matthew Koehler
    Subject: Recent Stimson articles

    Hello,

    I couldn’t help but notice how recent articles about Stimson Lumber Co. that were in the Missoulian (Dec 2006 and Oct 2005 and pasted below) pinned the problems the company was facing on a slumping lumber market, falling prices, dwindling demand and foreign competition. Yet the article in today’s paper appears to place the blame on the impending closure squarely (and solely) on lack of log supply.

    Yet, slumping lumber markets, falling prices, dwindling demand and foreign competition have not improved for Stimson, so one might assume that they factors (which a few months ago were cited by Stimson as main problems) contributed greatly to the announced closure. The fact that the Stimson employees have qualified for NAFTA Trade Adjustment Assistance from the U.S. Department of Labor certainly leads one to believe slumping lumber markets, falling prices, dwindling demand and foreign competition are negatively affecting Stimson and others in the wood products industry. Tyler’s article from December provided a lot of good facts and stats to back this up.

    Why were these factors not explored – much less even mentioned – in today’s article? And if an industry is facing falling prices for their product and dwindling demand for their product just how does increasing supply of that product help out the company? My understanding of economics is that more supply when demand has cooled will just result in even lower prices.

    ————————-

    Stimson to cut 43 jobs at Bonner mill
    By TYLER CHRISTENSEN of the Missoulian
    12/15/06

    BONNER – With at least 15 years at the mill in Bonner, Russ Hickman has enough seniority to hang onto his job at Stimson Lumber Co. when the rest of his shift is laid off.

    That’s slight consolation for Hickman, who suspects the wood products industry is in permanent decline and it’s only a matter of time before the mill shuts down completely.

    “It could be the day after tomorrow or 30 years from now,” he said. “So there’s no comfort for the quote-unquote lucky people like me who got to keep their jobs.”

    Stimson’s vice president of manufacturing, Jeff Webber, confirmed Thursday that the company will cut some 43 jobs at the Bonner mill, effective Jan. 2. Those jobs represent two operating shifts, or about one-third of the mill’s production.

    The decision to scale back production came in response to the slumping lumber market and continued problems with timber availability, Webber said.

    Stimson has seen its margins squeezed flat by high stumpage prices on one end and low lumber prices on the other, said Michael Woodworth, business manager for the Missoula-based Local 3038 Lumber Production and Industrial Workers Union.

    Average lumber prices have fallen by half, to a 10-year low of $240 per thousand board feet. Many blame the drop in prices on a flood of discounted imports from Canada, which has been cutting off its beetle-killed forests.

    Imports play a significant role in the American market, which is also struggling to compete against increased production from lumber companies in China and South America. Aggregate imports have risen steadily from 20.1 billion board feet in 2001 to 24.7 billion in 2005 – a 38 percent share of the market.

    That’s why Local 3038 has applied for Trade Adjustment Assistance through the U.S. Department of Labor, Woodworth said. The program grants up to two years of schooling and extended unemployment benefits to companies directly affected by imports.

    The Missoula Job Service is currently helping to retrain workers from Stimson’s last round of layoffs, which slashed 120 positions in October 2005. It is now entering into discussions with Stimson and the union to coordinate retraining activities for the latest layoffs, said Will Stubsten, program supervisor for Missoula Job Service.

    “This is a long-term commitment from those folks who want to change careers in a declining industry,” Stubsten said.

    The job training will be for careers in other industries, Woodworth said. There’s little hope that those laid off from Stimson will find jobs with other mills.

    “The whole Pacific Northwest is cutting back, from the West Coast all the way inland,” Woodworth said. “Some operations are closing entirely. Some are working reduced work weeks. It’s affecting everybody.”

    The national drop in production is bringing lumber supplies back into balance with lower demand created by a drop in new housing starts, said Shawn Church, an editor at Random Lengths Publications, which reports on the forest products market from Eugene, Ore.

    “Stimson is not alone,” Church said. “There are mills throughout North America cutting back production and it’s simply a result of a need to adjust supplies to a lower level of demand.”

    Lumber companies had ramped up production in 2004 and 2005 to meet historically high demand for housing, with levels topping 2 million housing starts. However, the National Association of Realtors said total housing starts for 2006 will drop more than 12 percent, to 1.82 million units, and 2007 will likely see an additional 15 percent decline to 1.54 million units.

    “I wish things were better,” Woodworth said. “That mill’s been there for over 100 years. It’s been a great supporter of this community. We hate to see it go this way.”

    The Bonner mill’s heyday came in the early 1980s, when it employed nearly 1,000 workers. Stimson, a privately-held forest products company based in Portland, Ore., bought the mill from Champion International in 1993. The company owns about 500,000 acres of timberland and counts assets and operations in Montana, Idaho, Oregon and Washington.

    Woodworth said the company has also shortened the work week at its finger-joint plant in Libby and is probably curtailing operations at its other mills.

    “This is a bad time of the year, right through the holidays,” said Woodworth, whose union represents 316 members. “They’re going to work four days after Christmas and then start out the new year with no jobs.”

    While Hickman will not be among those laid off, he was bumped to another shift that pays less.

    “I am going to lose $350 to $400 a month, even though I stay,” he said.

    Still, it’s a good-paying union job that offers insurance, a pension and the option for a 401(K), Hickman said.

    It’s just hard watching co-workers be laid off, he said.

    “These are people you’ve worked with for years,” he said. “You’ve floated the river and gone hunting with them. You wonder what they’re going to do. There’s nothing you can do about it.”

    Now his colleagues at Stimson are left working in an atmosphere of unease, he said.

    “The feeling is, get out of this wood products industry now,” Hickman said. “In general, it seems as if manufacturing jobs involving extractive industries are on the wane.

    “It’s kind of like when somebody’s dying and you get to the point where you stop hoping that they’ll live and start hoping that they’ll just die peacefully.”

    Reporter Tyler Christensen can be reached at 523-5215 or tyler.christensen@lee.net

    Copyright © 2007 Missoulian

    ———–

    Stimson fires 121 workers at its north Idaho mill
    Posted on Oct. 16, 2005
    By the Associated Press

    BOISE, Idaho – Stimson Lumber Co., a privately held wood-products company that owns 500,000 acres of forest in Idaho, Montana, Oregon and Washington, is firing 121 workers as it shutters a sawmill in Coeur d’Alene because of falling prices, dwindling demand and foreign competition.

    The company laid off 120 workers at its Bonner mill earlier this month.

    The Atlas mill in the northern Idaho timber and resort town produced pine board, molding, cedar boards, decking and other kinds of wood products for the building industry. It will close Dec. 31.

    Idaho’s congressional delegation blamed the job losses on cheap Canadian softwood imports that have been at the center of a bitter years-old trade dispute.

    It was at least the second Northwest sawmill to announce recently it was firing workers because of difficult operating conditions.

    Boise Cascade, a Boise-based wood-products company, said Wednesday it’s laying off 70 workers at a La Grande, Ore., sawmill because skyrocketing natural gas prices have made it too costly to run gas-fired boilers.

    The company blamed its woes on imports and alternative wood products robbing its mills of business.

    “Stimson is no longer able to economically compete with import and alternative wood products to its pine and cedar products,” CEO Andrew Miller said in a statement released Friday. “We face dwindling market demand and pricing.”

    Portland, Ore.-based Stimson, which runs separate stud mills in Coeur d’Alene and Priest River, as well as in Hauser following its buyout of that facility in 2004, plans to apply for Trade Adjustment Assistance from the U.S. Department of Labor. That federal program helps workers who lose their jobs because of increased competition or jobs being moved outside the United States.

    Immediately after the closure announcement, three members of Idaho’s congressional delegation, Sen. Larry Craig, Sen. Mike Crapo and Rep. Butch Otter, all Republicans, lambasted what they called the result of a spike in softwood lumber imports from Canada.

    “We will support your petition for Trade Adjustment Assistance to help with this transition and will also work to help outside workers, such as loggers, who are not directly employed by Stimson but will be impacted,” the three said in a statement.

    They called for a quick resolution of the dispute with Canada. The United States accuses its northern neighbor of sending millions of board feet of softwood lumber from government-owned timberlands across the border at low prices, making it tough for U.S. companies such as Stimson – harvesting wood from private land – to compete.

    The Bush administration imposed tariffs on Canadian lumber in 2002.

    While North American Free Trade Agreement panels have ruled in favor of Canada, the United States has kept the tariffs in place, on claims that its position is supported by the World Trade Organization.

    In a telephone call Friday, President Bush pressed Canadian Prime Minister Paul Martin for a negotiated settlement of the bitter dispute. Martin rebuffed the overture and warned that Canada would seek relief in U.S. courts if necessary, according to the two men’s respective press secretaries.

    Date: Tue, 8 May 2007 09:00:55 -0600
    From: “John Vanstrydonck”
    To: “Matthew Koehler” ,
    “Perry Backus \(MIS\)” ,
    “Tyler Christensen” ,
    “Sherry Devlin” ,
    “Steve Woodruff” ,
    “Michael Moore \(MIS\)”

    Actually, the local paper mill is having the same problem with the supply of logs. Supply is a problem.

    From: Matthew Koehler [mailto:koehler@wildrockies.org]
    Sent: Tuesday, May 08, 2007 10:34 AM
    To: John Vanstrydonck
    Cc: Perry Backus (MIS); Tyler Christensen; Sherry Devlin; Steve Woodruff; Michael Moore (MIS)

    John,

    You appear to miss my point. My point is that the article in today’s paper places blame for the impending Stimson closure squarely and solely on lack of log supply. This is strange since your paper published a few articles about Stimson recently (Dec 2006 and Oct 2005) in which the problems facing Stimson Lumber Co. were clearly identified as a slumping lumber market, falling prices, dwindling demand and foreign competition. These problems were identified by the company itself and by a wood products industry publication…not by an environmental group.

    Are you saying that the problems Stimson faces with a slumping lumber market, falling prices, dwindling demand and foreign competition no longer exist? That would certainly be news to those in the wood products industry. And someone should certainly let the folks at the US Dept of Labor’s Trade Adjustment Assistance program know too since these are the factors that are used to determine assistance through that program.

    Why you are defending the paper’s choice to not let your readers know about the problems Stimson faces with a slumping lumber market, falling prices, dwindling demand and foreign competition in context of the announcement of the closure of the plywood plant is a mystery to me and I believe it does a disservice to your readers. I fail to see how your readers benefit from only knowing a small part of the total story.

    From the Missoulian Dec 15, 2006:

    The national drop in production is bringing lumber supplies back into balance with lower demand created by a drop in new housing starts, said Shawn Church, an editor at Random Lengths Publications, which reports on the forest products market from Eugene, Ore.

    “Stimson is not alone,” Church said. “There are mills throughout North America cutting back production and it’s simply a result of a need to adjust supplies to a lower level of demand.”

    Lumber companies had ramped up production in 2004 and 2005 to meet historically high demand for housing, with levels topping 2 million housing starts. However, the National Association of Realtors said total housing starts for 2006 will drop more than 12 percent, to 1.82 million units, and 2007 will likely see an additional 15 percent decline to 1.54 million units.

    From the Missoulian Oct. 16, 2005:

    “We face dwindling market demand and pricing.” – Stimson CEO Andrew Miller

    Date: Tue, 8 May 2007 11:37:38 -0600
    From: “John Vanstrydonck”
    To: “Matthew Koehler”

    Fact is, the owners say that they are closing the plant for a lack of supply of raw materials. The other economic factors may have weighed on their decision. The difficulty getting raw materials at competitive prices would tend to make it particularly difficult for a manufacturer when a competitive market puts pressure on margins.

    The owners cite lack of supply of raw materials was the reason they decided to close the mill. I believe that we quoted them accurately. It may not fit your world view, but it is the reason they stated and it seems reasonable.

    Date: Tue, 8 May 2007 16:19:27 -0600
    From: “Perry Backus \(MIS\)”
    To: “Matthew Koehler”

    “The closure is the result of chronic, long-term log shortages in western Montana relative to the milling capacity in the region. At the time of the announcement, the plywood plant imported 60 percent of its’ wood requirements from veneer plants on the west coast and Canada.”

    That’s a direct quote from Stimson’s news release about the closure of the plant. Jeff Webber reiterated that information to me in a telephone conversation as did the union representative. Neither one mentioned anything about slumping market conditions. That information wasn’t mentioned in the company’s news release either.

    I realize you have an extensive background in the wood products industry. Your website said you worked for a lumber company while earning your high school teaching credentials in history and english. Perhaps you should offer them advice on how to make an operation pencil out when you have to import more than half of your raw materials from hundreds of miles away. I’m not an economist, but I would guess that even in a good market, it might be difficult for a lumber mill to compete when they have to import raw products from long distances.

    I also appreciate all of your advice on how to write an article. I’ll be certain to file it away.

    Perry Backus

    Date: Wed, 9 May 2007 13:28:31 -0600
    To: pbackus@missoulian.com, john.vanstrydonck@lee.net, tyler.christensen@lee.net, Sherry.Devlin@lee.net, oped@missoulian.com, Michael.Moore@lee.net
    From: Matthew Koehler

    Perry,

    The personal digs at me aside, have you ever thought that perhaps Stimson Lumber Co. and the wood products industry have a vested political and economic interest in blaming the pending shutdown of the plywood plant solely on lack of log supply and not on other, more important and complex factors? Have you noticed how in w. Montana any talk of “lack of log supply” inevitably turns into we need to log more our national forests? Have you ever seen the timber industry’s 18 wheeler with the names of mills that have shut down over the past twenty years painted on the side, with the inference that these mills shut down because of environmentalists…even though the true is far more complicated than that allegation? I can guarantee you that in the coming weeks organization’s such as our will be blamed in LTE’s, guest columns and maybe even an editorial for the closure of the Stimson plywood plant, so you’ll have to excuse me if I’m trying to make sure that the news media accurately portray’s all of the real, complex economic factors that contributed to the closure.

    The fact that you have written me back insisting that lack of log supply was the one and only factor in the closure of the Stimson plywood plant because the corporation said it was true in their press release is rather bizarre. That’d be the equivalent of a reporter insisting that there are WMD’s in Iraq and for proof offering up a press release from the Bush Administration that says it’s true. This is almost like the punch line to a bad journalism school joke.

    In my original message to the Missoulian, I simply stated that I couldn’t help but notice how recent articles about Stimson Lumber Co. that were in the Missoulian (Dec 2006 and Oct 2005) pinned the problems the company was facing on a slumping lumber market, falling prices, dwindling demand and foreign competition, yet the article in yesterday’s paper places the blame solely on lack of log supply.

    Don’t you feel like that’s a fair question for someone in the public to ask, especially since the problems of a slumping lumber market, falling prices, dwindling demand and foreign competition were identified by the corporation itself, union rep and by a wood products industry publication in recent articles in your paper? These weren’t factors that I pulled out of thin air or made up. Are these no longer problems facing this plywood mill or the wood products industry?

    Senator Tester was interviewed today on KUFM saying something to the effect that he was told by a Montana timber industry lobbyist a few years ago that the amount imports from Canada (and other countries) is so serious that the MT timber industry couldn’t even make it if they got logs for free.

    We have nothing at all against the hard working people of the Stimson mill. But I also know that unless the public and decision makers understand all the complex factors that are at work here, we will not be able to find solutions.

    For example, is any plywood mill in the US doing well? My understanding is that none are, with one main reason being that the relatively newly developed OSB (oriented strand board) is replacing much of the plywood use in this country. The reason for this is quite simple. It’s my understanding that plywood is made by shaving thin strips or “plys” of veneer from large logs (ie old-growth). These logs are called “peeler logs.” Well, most of the “peeler logs” have already been cut down over the past 40 years. Maybe this is why the company has to import 60% of its veneer from the West Coast (ie more productive growing conditions to grow big trees) and Canada (more productive growing in BC and also more access to large tracks of big trees).

    Meanwhile, OSB is made in basically the exact same fashion, except that instead of using large sheets of solid wood veneer from large trees, thousands of 3 and 4 inch long strands of solid wood are combined to make each sheet of OSB. So, technology has been developed that basically has made plywood an obsolete, inferior product. Is this maybe why Stimson is able to maintain production at the stud mill at Bonner, while the plywood plant is closing?

    Also, as was reported in the Missoulian on Dec 15, 2006 in Tyler’s article, “Lumber companies had ramped up production in 2004 and 2005 to meet historically high demand for housing, with levels topping 2 million housing starts. However, the National Association of Realtors said total housing starts for 2006 will drop more than 12 percent, to 1.82 million units, and 2007 will likely see an additional 15 percent decline to 1.54 million units.”

    One of the main uses of plywood is for home construction. Given that OSB has replaced much of the demand for plywood and given that the National Association of Realtors (as reported in the Missoulian) said 2006 housing starts will drop by 12% and 2007 is projected to see an additional 15% decline in housing starts, do you suppose that this has had any impacts on the plywood industry and Stimson in particular?

    I don’t claim to have all the answers to these questions, but I know enough to know that simply regurgitating the information contained within the Stimson Lumber Company’s press release hardly comes close to telling the whole story here. Why don’t you call someone like Dr. Thomas Power, chair of the University of Montana’s Economic Department and an expert on natural resource economics, and get some answers (243.4586 or tom.power@mso.umt.edu).

    All we have been asking with the Missoulian’s coverage of these issues is for objectivity and balanced and factual reporting. That hardly seems like too much to ask for.

    Sincerely,
    Matthew Koehler

    Date: Wed, 16 May 2007 08:46:49 -0600
    To: pbackus@missoulian.com, john.vanstrydonck@lee.net, tyler.christensen@lee.net, Sherry.Devlin@lee.net, oped@missoulian.com, Michael.Moore@lee.net
    From: Matthew Koehler
    Subject: Dr. Power on Stimson Plywood Plant

    Dr. Tom Power, Chair of the Economics Dept at the University of Montana
    Montana Public Radio Commentary – May 14, 2007

    Stimson Plywood Plant Layoffs:
    Politicizing Layoffs in Wood Products

    Last week the Stimson plywood mill outside of Missoula announced its impending closure, laying off its remaining 140 employees. In 2005 that same plywood mill reduced its production and workforce by 119. These job losses were especially painful because many of the workers had been employed at the mill for several decades.

    The Stimson Lumber Company said “The closure is the result of chronic, long-term log shortages in western Montana, relative to the milling capacity of the area.” That is part of the timber industry mantra that all job losses in wood products are due to the National Forests not authorizing sufficient timber harvests from our public lands or environmentalists using the courts to block timber sales. In that sense, Stimson is simply trying to get some political mileage out of its workers’ misfortunes.

    What is absent in Stimson’s explanation for the plywood mill closure is any mention of the market conditions it faced in selling its plywood.

    One might think that Stimson would mention the current housing depression the nation has slipped into, dampening severely the demand for building materials. Between the first quarter of 2006 and the first quarter of this year, housing starts are down 30 percent. Between 2005 and 2006 housing starts decline an additional 13 percent. That’s a cumulative decline in housing starts of almost 40 percent. Not surprising, composite lumber prices have tumbled too, cut almost in half over the last two years. One would think that might lead many wood products firms to reduce their production and layoff workers. That is what the industry has done in every other downturn in the housing market.

    Unfortunately, housing starts are notoriously cyclical which is why the wood products industry itself is cyclical, laying off workers during downturns and rehiring during housing booms. But plywood plants face an even more challenging market reality: Technological change has produced a new superior product that is stealing the market out from under plywood: oriented strand board or OSB. Just as plywood replaced boards as sheathing for buildings and underlayment for floors, OSB is now displacing plywood. Between 1999 and 2005 US production of plywood declined by 20 percent while production of OSB expanded by 29 percent. Since 1987 plywood production in the US has declined by a third. That trend is projected by the industry to continue.

    This long term decline in the role of plywood in the construction industry has led the American Plywood Association, an organization that has been around since 1933, to rename itself the Engineered Wood Association, incorporating manufacturers of OSB and other composite wood materials into it.

    US plywood manufacturers are also losing in the worldwide competition that globalization has unleased. Softwood plywood exports from the US to the rest of the world have plummeted while our imports of plywood have soared. Both reduce the market that our plywood mills can serve. For instance, since 1997 American exports of plywood to Europe have fallen by almost 99 percent and our exports to Asian are down almost 60 percent. During the same time period our imports of plywood have climbed dramatically.

    Given this triple whammy of a depression in new housing starts, long-term substitution of OSB for plywood, and international competition, one might expect plywood mills to be shutting down. After all, there isn’t as large a market to support all those mills any more. And that is exactly what has been happening. Over the last several years Weyerhaeuser Corporation has closed plywood mills in Mountain Pine, Arkansas, Hudson Bay, Saskatchewan, Wright City, Oklahoma, and Millport, Alabama, laying off a total of almost 1,000 workers. In addition, Frontier Resources closed its Yakima, Washington, plywood mill and International Paper closed its Waycross, Georgia, plywood mill. Over the last decade or so 8 plywood mills have shut down in east Texas. Note that most of these mills were not located in areas where the US Forest Service was a primary timber supplier.

    For the large industrial forest products companies, this does not mean that the American forest products industry is collapsing. For each plywood mill closing done, a larger and more efficient OSB mill is opening up. For each dozen small lumber mills closing down, a huge automated mill is opened up, boosting significantly, on net, total production capacity. Stimson’s Bonner mill happened to have an older plywood facility rather than a more recent OSB mill and has fallen victim to market conditions, technological change, and globalization.

    One can try to hide this from the citizens of Montana and blame the traditional scapegoats, the federal government and environmentalists, hoping to arrange a return to the good old days before Champion International and Plum Creek cutover huge swaths of Western Montana and the US Forest Service was trying to do the same to our public lands. But those days are never coming back. Our citizens want the public forests to be managed to enhance all of the forest’s natural values, wildlife, recreation, fisheries, scenic beauty, water quality, etc. not just the forests’ commercial values. Once all forest users adjust to that reality, we will be in a position to manage those natural forests in a way that both protects the environmental services on which we all rely and supports local economic vitality.

    Subject: RE: Dr. Power on Stimson Plywood Plant
    Date: Wed, 16 May 2007 09:28:27 -0600
    From: “John Vanstrydonck”
    To: “Matthew Koehler” ,
    “Perry Backus (MIS)” ,
    “Tyler Christensen” ,
    “Sherry Devlin” ,
    “Steve Woodruff” ,
    “Michael Moore (MIS)”

    Hey Matt, sounds like you and Dr. Tom have the same world view. Both you and the good Dr. seem to be claiming that Stimson lied when they stated the reason for closing the mill. Unless you were in their deliberations when they decided to close the mill, or know someone who was, you have no basis to claim that the lack of raw materials was not the reason they closed the mill. If you have some credible inside information that our reporter is not aware of, you should pass it on.

  1. 1 Like a Bad Neighbor, Stimson Lumber Mill is There « 4&20 blackbirds

    […] note – given all my past criticism of Stimson lying about “not having any logs” (try this post) Stimson is keeping its “White House” open to maintain logging operations on its land […]

  2. 2 Stimson Lumber Mill Closing « 4&20 blackbirds

    […] on Stimson: Why Stimson Lumber Mill Matters The Mysteries of Stimson Stimson Needs a Bigger Yard? On Regurgitating Stimson Lies, False Economic Development and Affordable Housing A Short Thought on the Bitteroot Resort Possibly related posts: (automatically generated)Like a Bad […]




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