Weyerhaeuser Closes Two Lane County Mills

Dec. 19--Weyerhaeuser said Monday it shuttered building products plants in Springfield and Coburg that employed 128, in response to a demand slump induced by the nation's weakening housing market. The cuts were effective Monday.

The plywood mill in Springfield had 86 employees and the veneer plant in Coburg had 42. Weyerhaeuser acquired both in 2002, when it consummated a protracted hostile takeover of Portland-based Willamette Industries, then one of two Fortune 500 companies based in Oregon.

Weyerhaeuser blamed weak demand from recent declines in home building, as well as the long-term growth of alternative products, such as oriented strand board, which has been replacing plywood for years.

"There's a shrinking demand for plywood panels because of the decline in housing starts and the increase availability of alternative products," said Cathy Slater, vice president of veneer technologies.

The plywood mill was Weyerhaeuser's last such mill on the West Coast. It also produces plywood in the Southeast, where smaller trees are generally less expensive to use for wood products.

Weyerhaeuser and other building products companies face increasing financial pressure as home builders scale back their purchasing of lumber, panels and other materials. Sawmills across the state and the nation have reduced hours and production. Corporate profits have fallen as a result.

On top of those pressures, investors are pushing for integrated companies such as Weyerhaeuser to split their manufacturing facilities from timberland ownership. Weyerhaeuser's second largest shareholder last week asked the company to consider converting to a real estate investment trust to gain tax and other advantages.

Weyerhaeuser regretted the timing of the layoff announcement, coming just a week before Christmas, said Mike Moskovitz, a company spokesman. But he said Weyerhaeuser just made the closure decision late Friday, and wanted to notify employees as soon as possible.

"Out of respect to the workers and their families, we wanted to give them some certainty about their future," Moskovitz said.

Employees at both facilities will be offered benefits per union contract or government requirements, Moskovitz said. Both sites have had curtailed work hours in recent months, Moskovitz said.

A year ago, the Springfield plywood mill had four shifts working seven days a week. Since January, its employment and hours have been scaled back. Recently it has run two shifts five days a week. Built in 1962, it has the capacity to produce 117,000 million square feet of 3/8-inch plywood a year.

The Coburg plant has been curtailed since Oct. 28. The facility, which began producing veneer in the 1960s, was started by Bohemia Lumber Co. and later acquired by Willamette Industries. It can produce 105,000 million square feet of 3/8-inch dry veneer.

After the cutbacks, Weyerhaeuser will have 4,000 employees in Oregon, including 1,800 in Lane County. It is the state's largest private timberland owner, with about 1.2 million acres.

Weyerhaeuser shares closed at $70.62 in New York Stock Exchange trading Monday, down $1.31.

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