Boise Cascade to lay off 110 workers

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.

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.