Logjam

| November 13, 2008

Times is tough, but in Humboldt County, few have it tougher than mill workers. Hot on the heels of the Evergreen pulp mill shutdown comes another closure, this one on the opposite end of the Samoa peninsula and, hopefully, much shorter-term.

Sierra Pacific Industries' Arcata lumber mill halted operations Monday citing market conditions, that insurgent job-eating demon. "It's due to the falloff in housing," explained Mark Pawlicki, spokesman for the Redding-based company owned by lumber mogul Red Emmerson. "We're seeing a tremendous parallel falloff in lumber demand," he said.

Approximately 100 workers have been relegated to temporary couch, beer and pretzel duty. The mill is expected to reopen Monday, Nov. 24.

The housing slump has taken a toll on many related industries, from construction to real estate to lending and more. With loads of houses sitting on the market, demand for lumber has fallen to levels not seen since 1982, and many mills are looking for ways to cut costs and slow production. The SPI sawmill near Standard, west of Yosemite, for example, recently reduced about 100 of its hourly employees to four-day, 32-hour work weeks indefinitely.

At the height of the construction boom, nearly two million new homes were being built each year. In September, the annual rate of housing starts dropped to 817,000, the second lowest level on record, just behind a nadir reached in September 1991, according to the Commerce Department. California has been among the hardest hit states, and experts are expecting the October figure to break the all-time record thanks in large part to the still-melting meltdown on Wall Street

That drastic construction slowdown has created an inventory glut for SPI and other lumber companies across the country. "We've got to work through that inventory rather than [continue to] produce in a down market," Pawlicki said. SPI hasn't been forced to take such measures since the big downturn in demand of the early ’80s, he added.

The Arcata mill, one of a dozen owned by SPI and the oldest in their stable, specializes in large-log manufacturing including framing lumber, industrial lumber and Douglas Fir timber, the vast majority of which go into housing. Just a few workers will remain on site for maintenance and shipping during the shutdown.

When asked if the 100-or-so affected workers will continue to get their paychecks during the hiatus, Pawlicki responded, "No, but they can file for unemployment."

He added that the company continues to invest in new technology and insists, "when the market turns around, we'll be ready for it." Of course, nobody knows when that may happen, and this two-week closure could be the first of many. "We're hoping the market will turn around," Pawlicki said, but he admitted that they have yet to see any signs of it.

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