The remaining lumber industry on the Mendocino Coast faces widespread job losses as chainsaws fall silent and lumber mills close across the nation.
“In the past, redwood lumber has been insulated from the ups and downs of the housing market,” said Mike Jani, spokesman for Mendocino Redwood Company (MRC). “That is not the case this time.”
MRC and its sister Humboldt Redwood Company announced the temporary layoffs of about 63 people last Thursday, April 30, with the cuts split as evenly as possible between the two companies.
MRC”s largest Mendocino County operation is in Fort Bragg. Mendocino Forest Products also suffered three layoffs.
Jani explained redwood lumber is used mostly for high-end renovations, decks and other lifestyle features, never for framing a home. Wealthier people, many of whom have lost big in the stock market, do those kinds of additions.
The coast”s primary timber product is redwood, but this downturn has hit all lumber types from oak hardwoods to pine softwoods. Timber mills are closing across the nation as housing starts have nose-dived along with lumber prices.
“Harvests from our timberlands are now expected to be 60 to 70 million board feet for the combined companies from the beginning of 2009 through the end of 2010, which is approximately one-third of our normally planned harvest,” wrote Mendocino Redwood Company CEO Richard Higgenbottom in a letter explaining the layoffs.
The company told employees the layoffs are temporary, with most being given furloughs rather than terminations.
“[We] anticipate business conditions could allow, but not guarantee, a return to active status within the next 18 months,” Higgenbottom”s letter said.
MRC employees got pink slips on Thursday, which were effective Friday, May 1, allowing the employee to receive health coverage for another month, Jani said. Others were allowed to stay until projects or training under way could be completed.
Although the national media wrote the obituary for the local timber industry when Fort Bragg”s lumber mill closed in 2002, there have continued to be more than 200 truck driving, tree falling and other timber-related jobs each spring, summer and fall. That will change in 2009. These are some of the only available good paying blue collar jobs.
Philbrick Logging and Trucking in Comptche usually employs about 40 people when the season is in full swing in June. But with the most recent lumber industry nosedive, Jerry Philbrick is afraid he may not be able to do any hiring this year.
Those job losses are not directly related to the MRC cutbacks, Philbrick said.
“That”s $135,000 in [weekly] payroll that likely won”t be going downtown in Fort Bragg and the rest of our community,” Philbrick said.
He pointed out that Roach Brothers Logging and Anderson Logging of Fort Bragg are suffering hard times along with the rest of the industry.
“That”s probably more than a half million in combined payroll that might not be going downtown. Losing some or all of this could be devastating to the local economy,” he said.
The timber industry is unpopular among many people, with past timber practices and lack of foresight having permanently injured both the forest”s ability to provide jobs, along with rivers and salmon.
But Philbrick points out practices are much different today.
“There are more good young trees growing now than ever … The companies are all taking care of the forest now. This is an industry that will never totally die but does need some help right now,” he said.
The industry faces its worst summer ever, one that could kill off local employers, according to national media reports. Philbrick thinks the industry needs a temporary bailout to return to health.
“Banks have gotten huge bailouts, so have the auto companies. The fishermen have gotten help. Everybody has gotten a hand during these difficult times, but never timber. Even with all this stimulus money coming, the timber industry has never received a dime,” Philbrick said.
As lumber prices plunge, trade war has erupted over low-priced Canadian timber, according to national media reports. Industry forecasts predict timber prices will continue to decline.
Yet, low lumber prices have not revived building or building plans. Some banks in Central California have ordered bulldozing of brand new homes, due to rampant foreclosures and lack of real estate buyers, according to state media reports.
Today, lumber costs less than half what it did at the peak of the housing boom, but about one-fifth as many homes are being started.
The worldwide housing boom drove prices to $428 per 1,000 board feet of framing lumber in March 2005.
On Monday, the price was all the way down to $203 per thousand board feet of framing lumber, up slightly from the low point of $190 at the end of January, according to the National Association of Home Builders.
That means a 1,500-square-foot house with attached garage that might have cost $200,000 in lumber to build in 2005 would cost less than $100,000 now.
Despite the record low lumber prices, building is at a virtual standstill. There were 2.3 million housing starts in February 2005, despite those high prices. In February 2009, there were 510,000 housing starts.
Philbrick says another big problem of the timber industry is that it fails to engage the media, politicians, the nation and even local economies like Fort Bragg about how it has changed and its continuing impact.
“The timber industry simply doesn”t have a voice out there … We bleed, we breathe, we spend money, we pay our taxes. We need and we deserve some help,” Philbrick said.
