Sawmills Still Face Bleak Future Decision To Allow Salvage Of Burned Timber Won’t Help Many Companies

Despite President Clinton’s decision Thursday to permit salvage of several billion board feet of burned timber, the economics for Inland Northwest sawmills remain grim.

Clinton’s authorization to sell large stands of timber burnt last year may have come too late to make much difference for some mills.

U.S. Forest Service chief Jack Ward Thomas told The Spokesman-Review that the agency prepared salvage sales before the bill authorizing the sales reached Clinton’s desk.

However, much of the main timber harvesting season is over, leaving just a few weeks to get crews into the forests.

It’s getting harder to retrieve the public timber, too. The most recent Forest Service timber sale in Vaagen’s traditional timber circles required helicopter logging, said Duane Vaagen, president of Colville’s Vaagen Brothers Lumber.

“There’s just no way we can make that sale work,” he said. “It would run us out of business at these prices if we took the sale.”

Vaagen Brothers faces some of the greatest challenges among Inland Northwest timber companies.

Last week Vaagen made layoffs at its Ione, Wash., sawmill permanent. Sixty workers lost jobs, though about 20 have agreed to commute to Vaagen’s mill in Colville.

The aging equipment at Ione will be auctioned, though Duane Vaagen left open the possibility of restarting the mill in the future.

“When we took over that mill 10 or 12 years ago from (Louisiana-Pacific), nobody thought we could make it work as long as we did,” he said. “It’s a shame we have to end it.”

Last fall Vaagen also laid off nearly 100 workers at its Republic, Wash., sawmill. The facility now operates one, and occasionally one-and-a-half shifts, Vaagen said.

One of the largest privately owned timber companies in the state, Vaagen faces tough choices about the future of its mills because of harsh economic conditions.

Canadian lumber companies continue to pump finished lumber across the border, capturing nearly 40 percent of the market. That compares to about 25 percent a few years ago, Vaagen said.

The glut has depressed lumber prices, cutting margins on running logs through the mill.

The lack of federal timber to supply the mills also crimps their profitability.

Under these market conditions, timber companies have to spend money to keep the bottom line in the black, said Steve Thompson of the Montana Wilderness Association. Mills must modernize to be able to run smaller diameter logs through the equipment.

“There’s just not any more old growth out there,” Thompson said. “Companies either modernize or close the mills.”

Crown Pacific Ltd. in June kept its Thompson Falls, Mont., mill open by having it process only Ponderosa pine trees. The change averted a shut down, but cost half the workers their jobs and the company a few hundred thousand dollars for retooling.

Potlatch Corp. also recently announced $170 million of investments into facilities at its St. Maries, Idaho, millworks. That modernization will cost 30 jobs.

Economic development officials in northeastern Washington have lauded the area’s transition from a timber-and-mining based economy to a tourism area.

However, Job Service officials concede that replacing high-paying jobs at the mills and the mines with service-based tourism jobs will make for a difficult transition.

, DataTimes The following fields overflowed: CREDIT = Eric Torbenson staff writer Staff writer Ken Olsen contributed to this report.