Plant closings hit Northern Minnesota's economy/families and wildlife hard

[Bufflehead]

Ainsworth closes Grand Rapids, Cook facilities
Britta Arendt
Herald-Review
Last Updated: Monday, September 25th, 2006 01:28:58 PM


Layoff notices were given to 150 employees of Ainsworth Lumber Company?s Grand Rapids facility on Friday and another 150 employees at the company?s Cook facility were told to expect that they may lose their jobs in two weeks.
According to a press release from Ainsworth headquarters in Vancouver, British Columbia, Canada, the company is suspending oriented strand board (OSB) production at both facilities effective Friday for an ?indefinite period.?
With a total employee base of 190 people, the Grand Rapids facility has an annual production capacity of 390 million square feet. The Cook facility employees 170 people and has an annual production capacity of 430 million square feet. Two weeks ago, the company shutdown production at its Bemidji facility, laying off 110 employees.
?The decision to suspend production reflects the high costs of production coupled with protracted weak structural panel market conditions,? said Brian Ainsworth, chairman and CEO, in the press release. ?The continued losses due to very high Minnesota wood costs, increased costs for freight and resins, and prevailing market prices have regrettably forced us to take this action. Unfortunately, we do not foresee any near term improvement in either the cost or market conditions.?
While the lay-offs will certainly hurt many local families of former Ainsworth employees, this major cut in OSB production will be a big blow to local loggers and truckers as well.
?Some loggers are heavily vested in Ainsworth?they will be hit hard,? said Scott Dane, executive director of the Associated Contract Loggers and Truckers (ACLT).
According to Dane, just last week the ACLT put out a publication that addressed the potential threats that such shutdowns could have on the logging and trucking industry.
?There has been very little wood business since last March and this has crippled the logging industry,? said Dane who estimates the shutdowns to cause a 10 to 15 percent drop in demand for stumpage. ?Now with the Ainsworth shutdown in Bemidji and now the Cook and Grand Rapids shutdowns?it?s devastating.?
According to the Ainsworth statement, all Cook employees will be retained for the next two weeks to perform extensive annual maintenance work that was originally planned for this December. Once this maintenance work has been completed, approximately 150 employees will be laid off.
A decision on whether to resume production at either the Grand Rapids or Cook will be reviewed in mid-October. The company states that production at the facilities will only resume when warranted by improved market and cost conditions.
Ainsworth is North America?s fourth largest producer of OSB and has seven OSB manufacturing facilities with a combined annual production capacity of 3.1 billion square feet.
Dane said ACLT has approximately 120 members, many of whom brought wood into Ainsworth facilities. He said the association has contacted county land departments and the Minnesota Department of Natural Resources for assistance in efforts to sustain the remaining timber industry infrastructure in northern Minnesota.
?The wood product industry is vital to northern Minnesota,? added Dane. ?Hopefully, the state of Minnesota will recognize the current downturn in the timber industry and treat it similarly as the current situation with the agriculture industry which farmers are receiving assistance.?

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I know, I have a love hate thing with logging also. I don't like to see my favorite hunting places have their tree's cut off, but it in many ways it improves the food sources for many game birds and animals.

Deer winter on new buds on the young growth as does the grouse and other animals and birds as well.

Then you have to think of the families who's lives depend on these jobs to survive. This area can't aford this kind of blow to the economy. There's not alot of good paying jobs already. then we will have the snowball effect. With these people/pay checks taken out of the economy, everybody will feel the effects.

Many times, where you hunt and how you get into that spot, is because of loggers. How many times have you not found yourself hunting your way down a logging road or using the road to get to your stand?

I bet near 100%

Most of the snowmobile trails are because of loggers. The trails are connected from one logging road to a powerline, too another logging road Etc.

Without logging roads, ATV's would be useless..besides, you can't legally cut across country on your ATV anymore on public lands. It has to be a established trail..which is a logging road.

During years of heavy snow, deer many times yard up in log landings, where it is kept plowed. this gives them rest from the struggle in the deep snow and they feed on the many tops from the harvested tree's. It also gives the deer a chance against meat eating wolves. They stand a much worse chance of out running them in deep snow, then using the hard packed winter roads/landings for their escape.

Think about the kids of these families come Christmas time or anytime for that matter. These people are going to have real tough skidding ahead of them..along with less feed for the critters as well. Lets hope for a mild winter

Chuck..AKE Bufflehead

[jigglestick]

I can vouch for all of that chuck.
add in the fuel factor that has been kicking our asses all summer long, it sort of takes the fun out of making a living :(
imagine paying $250.00 a day in fuel costs alone....sometimes more.
we already knew the wood market was in the crapter before this hapened, now..??
I can pretty much rule out doing that for a living.
the cause for this in my opinion is due to several factors. there is a viable market.
nowdays everybody knows what OSB is.
it is used world wide in the building market.
when the disasters struck, they couldn't make it fast enough. they (potlatch) bought everything. pine, birch ash maple, aspen and basswood. even the rotten stuff. it became rule of thumb to send the aspen with junk in the middle to potlatch. the good stuff went to deer wood, or blandin paper. they paid better.
the big timber producers bought stumpage at the timber sales for outrageous stumpage prices. they didn't seem to care what they paid for it.
they needed to put out tens of thousands of cords per year to cover their payments and rising costs. all new equipment like forwarders, feller/bunchers, processors, de-limbers. nothing was done by hand anymore.
they drove the costs up so high they drove out the little loggers, which is a common buisness strategy, however, with the downplay of the market, they drove themselves out of the market as well.
I cant say this is all cut and dry though. there is more to it that I just cant quite put my finger on.
ainsworth in grand rapids was buying wood like crazy last week only to abruptly shut off the trucks on friday, turning several trucks back at the gate.
was this a move to keep investors hedging their bets until the axe fell?
are they really permanently shutting down?
or is this a play to sway the industry to eat a bunch of the costs before the timber ever reaches the mill?
your guess is as god or better than mine.

it is kinda sad, but it needed to happen. sort of a cleansing of the entire wood industry here in northern minnesota.
it is cheaper to buy wood shipped in by rail from canada than to pay for it logged right here.
I will miss hauling wood in the winter. not only will it dramaticly affect my family's financial situation, but I used to like heading out to the woods with my truck and trailer, throwing a load on, watching the deer wander around the wood yard, smelling that smell of fresh cut balsam or aspen, then cruising down the road with the tunes on, nobody over my shoulder. I got paid by the load, so the harder I wanted to work, the more I could make, but it I wanted a day off, I took it.
it is a sacrifice too, I mean being your own boss. we don't have the 401k, the health plan, the security of 40 hours a week. hell, I'd have my 40 in by wednesday morning some weeks.
I allways figured it was better than raising my kids in that drug infested muslim laiden concrete jungle though, and I still think that way. we are now just going to have to adapt and figure out a new way to get it done.

[WoodChuck]

     
   WOW!!!!!!!!!!!     HEY jiggles,  YOU SURE HAVE A WAY WITH WORDS ! you put things in perspective as to the truth. with the price of stumpage so high  and the price of fuel it is hard for the little guy to servive. i had to let one guy go for just that reason. wood prices were around 4.00 a cord for fire wood, that was only a year ago, and saw logs at 30.00 a cd i could feel the bite then .        FEAST OR FAMINE ITS OUR CHOICE! good luck >:( ???                               

[Russ-Judy]

my nieghbor next to the Duck Inn got a phone call last week and the paper mills cancelled all thier pulp contracts for this winter-ouch

[Dr.Bob]

Man that BITES!

 :P :-\ :P

[vickieschessies]

Got a call yesterday from one of my very good friends, her husband got permanetly laid off. He is a logger trucker. They just did a home improvement and now....... I really feel for them and every other person who is going to hurt by this situation. 

I sure hope taxes on my wooded acres are going to drop being our timber is no longer of value..... NOT

[KATOMAN]

Firewood was $4.00 a cord a year ago? What is it now? What kind of wood is it?

[JohnWester]

I sure hope taxes on my wooded acres are going to drop being our timber is no longer of value..... NOT

right...  you would have a point there though.

[jigglestick]

Firewood was $4.00 a cord a year ago? What is it now? What kind of wood is it?

what kind of wood were you buying for $4.00 a cord a year ago, or any time in your lifetime for that matter?
hell, you can't buy a bundle of fireplace wood at the holiday station for $4.00 a bundle.

[Bufflehead]

 $4.00 a cord?

 I'll take 20 cords...$80.00 bucks to heat my place for two years...YEE-HA!!!!LOL

 That leaves more time(I don't have to cut wood)

 And more money to buy guns and fishing gear to go on more trips...I like it when a plan comes together

[WoodChuck]

  cass and crow wing counties sell wood off of tax forfeited land in 10 cord lots , fire wood dead and down for as little as 2.00 a cd? and pulp to saw log bolts for 30.00 a cord. you have to check with your local cty foresters to get the better deals . some times it pays to be a small business operator then a big business man? in this money hungry world . oak, aspen and pine plus what ever is left. the price changes with the current market values.

[KATOMAN]

That is interesting, I have been trying to buy a load of birch for firewood and that has been next to impossible. So, what is the biggest contributing factor to the demise of the wood industry? Is it the lack of demand or imported wood from Canada?

[jigglestick]

tell me how much birch you want KATOMAN
if you have a trailer I may have a connection.

there are alot of contributing factors. I am not sure what the biggest contributor is. the ultimate factor is lack of proffit, all around.
I can try to elaborate if you like.

[KATOMAN]

I was thinking about a cord or so. It doesn't have to be cut up as such but in log form would be good. I have chain saws and a splitter. I cut wood here for the clubhouse but it is oak and elm for heat. I love the birch for fires outside. I can pretty well guess about the closings. I was having a conversation with the manager of the local Sam's Club last night. She said there is no such thing as job security anymore, It has become very evident.

[WoodChuck]

 :) hey katoman , if you need a cord of that white wood i might be able to find one for you.

[KATOMAN]

Woodchuck;

The whitewood being birch? I would be interested. It needn't be so much now but for sure in the spring. It has gotten to the point I will take it anytime, ha!

[WoodChuck]

 :) man, by spring everthing gets scarce and the price goes up as it gets harder to find. YES, being birch, instead if you want canadian birch?

[KATOMAN]

Nope, don't need that Canadian stuff if Minnesota can provide. Where are you located?

[WoodChuck]

 :) man, canadian? good stuff hey!!!? ?i am located between baxter and pillager on the nord side of da hwy. 210 west.

[pointblank]

As a former logger I couldn't even saw down my own timber for $4.00 a cord. My saws use more in  gas and oil alone than  that.

 Loggers are paying $14.00 a cord for trucking, $12.00 for snipping/ slashing and pay upto $58.00 a cord just for stumpage on state auctions.   That is for winter wood........summer wood means you add 20% to each.
 
 The mills are paying $68-80.00 a cord depending on  the type of wood.
  do the math..........whats left to pay your operation costs?
Don't forget your self-employment tax and health insurance.

      Leave the loggers alone..........they only trade dollars for change.

[WoodChuck]

 :)? i guess it,s just a trick of the trade, to operate at a small over head budget and still turn a profit! as for the hired help family members and the gov. form 1099 comes in handy. to much of todays work is performed by machinery and not by the mind and the back, it takes a lot of sweat equity and hope you make the right decisions. for the right decisions is what makes a business prosper or fail, and that is feast or famine . the logging industry has taken away too many jobs and jeopardized its own existence by becomeing mechanized and not depending on manual labor.

[KATOMAN]

Woodchuck, Jiggle, keep me posted, I can make that run. 

[Bufflehead]

Emergency meeting held on wood products layoffs
Britta Arendt
Herald-Review
Last Updated: Wednesday, September 27th, 2006 10:54:08 AM

Loggers and truckers of northern Minnesota joined together in great numbers for an emergency meeting in Grand Rapids Monday in an effort to send a message to policy makers that something needs to be done quickly to protect the state?s timber industry infrastructure. Their goal?to facilitate constructive dialogue addressing the challenges, threats and issues facing their livelihood.
The emergency meeting was organized in response to Friday?s announcement by Ainsworth Lumber Company that it is temporarily closing facilities in Grand Rapids and Cook, with production resuming only should market and cost conditions improve within the next two weeks. The announcement proved to be the tip of the iceberg for area loggers and truckers, many of whom have not been working since last winter and can now expect to be out of work for another two to three months. They called in various county, state and federal representatives and attracted the ears and interest of several political candidates?all open to discuss the options and hear the concerns of all industry stakeholders from loggers and truckers to foresters, land owners, mill employees, bankers, equipment dealers and more.
?You are all here because you are concerned and you love your industry,? began third-generation logger Peter Wood who facilitated the meeting. ?Ainsworth doesn?t want to do this but when you?re nonprofitable, you have to. There used to be more than 400 mills west of the Mississippi, now they?re in the teens. And, we have the highest price of stumpage in the world. We all want to see the mills profitable and we?re all environmental activists. If we can reduce the price of stumpage, we can get the door open again.?
With elections a little more than a month away and a room full of politicians, the meeting quickly became a political arena with talk of environmentalists, capitalists, state programming, and federal restrictions. But politics put aside, the general sentiment was that the problems facing the timber industry need to be addressed quickly.
?We have elected officials here and people who want to be officials here and if they can?t find a way to solve this, they shouldn?t be officials,? said Wood. ?Everyone is here because we are all concerned about the same thing. It would be great if the governor and the attorney general could work with these people here to keep them working.?
Representing the Minnesota Department of Employment and Economic Development, Ward Einess told the crowd that DEED and Governor Pawlenty hope to have a decision on how best to respond to the timber industry?s current situation by the close of day on Tuesday.
When questions arose regarding the market for timber products, representatives from paper and lumber mills throughout northern Minnesota explained that the business is very cyclical with good years and bad years. Loggers and truckers alike spoke of the high costs in Minnesota that make it difficult to compete in the world market. Wood explained how stumpage prices have jumped from $3 a cord to $100 a cord in the last ten years and how the auction system has resulted in loggers bidding against their neighbors.
?There is this fear of running out of wood because everyone is wanting to buy the same tree,? said Wood. ?Even the people selling it want the bidding wars to stop. We cover about 20 percent of land in this state and we?re one of the top four industries of the state. It?s a hidden industry; no one sees you because we?re in the woods all the time.?
District 4A State Representative Frank Moe (DFL-Bemidji) explained how quickly Ainsworth?s decision to permanently close the company?s mill in Bemidji two weeks ago resulted in devastating affects to the industry. Moe suggested a state forest products summit should be organized for the near future. And Wood encouraged those in attendance to be proactive in speaking with their state legislators and voicing their concerns.
?The sooner we move the quicker we can get everyone together and the less chance it will be permanent,? commented District 5A State Representative Tom Rukavina (DFL-Virginia).
?They have the power, but you have the votes,? said Wood.