Staff Writer
The company initially closed the two mills for what was supposed to be a two-week period, with a tentative re-start date of Jan. 19. Company officials were in Aroostook County on Monday, but it was anything but good news they delivered to mill employees.
“We went to Ashland on Monday to meet with the employees and staff. Initially, we’d planned on extending the closure for two weeks, but based on projections from financial numbers from lumber prices and chip requirements at pulp and paper mills, the company made the decision to keep the mills closed indefinitely,” said Paul McKinley, general manager of Fraser’s lumber mill operations in the U.S. and Canada.
McKinley said the mills had continued to accept log deliveries over recent weeks, but with money going out and nothing coming in, Fraser officials have decided to stop accepting logs.
“At the end of this week, we will no longer be accepting log deliveries,” he said. “We have approximately seven weeks of wood supply to process at the end of this week.”
According to McKinley, the shutdown at the two local mills is only temporary, since “wood has a shelf life.”
“Wood has to be processed or it will deteriorate. We’ll reopen at some point, we just can’t afford to re-start at this point. We’ll remain in shutdown mode for a few to several weeks, based on market influence,” said McKinley.
Lumber pricing in the Boston market, as of Friday, was down to $245 for 1,000 board feet, he said.
“We have to go back to 1991 to find prices that low,” said McKinley.
McKinley said the pinch is being felt across the U.S. and Canada.
“It’s very bleak in Canada as well. New Brunswick mills have dealt with shutdowns of their own. The Juniper mill was shut down through October 2008. It’s been operating on a single-shift schedule for three or four months, but that’s quickly approaching an end. Plaster Rock was down many months last year, running a shift off and on. Normally these mills run two shifts but have been lucky to run one,” said McKinley.
The economic effect has been felt across the U.S. as well.
“Western Wood Products Association (based in Oregon) is in the biggest lumber-producing region. I recently saw where they forecast housing starts at about 800,000 for 2009. That’s the lowest level since WWII,” said McKinley.
A release on WWPA’s Web site, www2.wwpa.org, confirms 2009 housing starts are forecast at 803,000, a post WWII low, and notes, “Lumber used in residential construction will total 9.5 billion board feet, one-third of its 2005 peak. In 2005 alone, some 27.6 billion board feet of lumber was used in new home construction. Since then, the number of housing starts has been reduced by more than half.”
McKinley said those at Monday’s meeting could not remember a time when housing starts were so low.
“When I met with staff, we realized we were all born after WWII. In all our lifetimes, there’s never been a housing start number that low,” he said. “That’s one association’s forecast. The whole recession business is bearing down on us.”
Despite such predictions, McKinley remains optimistic about the lumber business.
McKinley said Fraser expects to stay in business and that “all decisions are made in terms of trying to keep the business afloat.”
“We know we’ll have a good future eventually. It’s all a matter of who survives the valley here. But there’s no significant improvement forecast until late 2009 at the earliest,” said McKinley.
“At the end of the day, when you have employees going home on unemployment, that’s very painful. Any assistance for employees that can be made and any help offered would be appreciated. I’m not familiar with Maine laws, but the company would appreciate any help government officials are able to provide,” said McKinley.
McKinley said locally he’s been working with Town Manager Jim Gardner to ensure employees receive the aid necessary to see them through this difficult time.
“Jim has been actively involved. He’s been fighting like heck to put his influence to use to take care of employees,” said McKinley.
Gardner recently returned from Augusta, where he spoke with state officials regarding the closure and the employees affected by it.
“It went well in Augusta. I met with Representative John Martin, Senators Troy Jackson and Roger Sherman. I told them what was going on. I told them what we felt was the biggest problem here, competition,” said Gardner.
Upon his return, Gardner met with company officials to continue working on a solution.
“When I came back, I met with Fraser (officials). We’re looking at things that will make the mill more viable and cost-effective,” said Gardner.
Gardner will continue to meet with government officials in the coming week, seeking whatever assistance might be available for those affected by the closures.
“I have a meeting set up for Jan. 29 to meet with federal congressional people, including Senators Olympia Snowe and Susan Collins, as well as Congressman Mike Michaud, to echo the same things I discussed in Augusta,” said Gardner, noting, “We’re not alone; it’s happening all over the country.”
On a local level, Gardner is looking for ways to help the mills improve production. In the meantime, he’s been in contact with the CareerCenter to make sure everything possible is being done to assist the displaced workers.
“I’m trying to find ways to help the company become more competitive in the market during a sluggish time. If we can find that solution, then they’ll (Fraser) be competitive in the long run,” said Gardner. “In the meantime, I’d like to thank the CareerCenter and Torry Eaton. They’ve taken the 179 people and done a really good job with them.”
McKinley said company officials realize how difficult a time like this is for employees.
“For each employee, it’s very challenging. We welcome any assistance we can get. It’s only needed on a short-term basis. We’re already in our third week (of shutdown); it will be another few weeks or more. It could be a couple months, who knows. It’s a tough time for employees nonetheless,” he said.
The employees were praised for their dedicated efforts at both mills.
“The employees do a super job. None of this is their fault. These are circumstances totally beyond their and our control. We certainly appreciate their support and understanding. But understanding doesn’t make it any better for them,” said McKinley.
Fraser officials hope to have production back online at some point but can’t give a specific date when that will happen. Much will depend on whether government officials are able to provide assistance of any kind.
“This is a temporary closure. We’re not permanently walking away. We’re actually spending money to keep the mills warm this winter,” said McKinley. “I strongly encourage the appropriate agencies to do whatever they can to help the employees. It will be a great business (lumber) to be in when it turns around. We’re one of those fighting to be in the business when that happens. We just need to get past this rough period first.”
