Written by Gordon Hoekstra
Citizen staff
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Thursday, 28 May 2009 |
A railcar with raw logs gets unloaded at the Rustad Bros. sawmill in the BCR Industrial Site. (Citizen file photo)
Rustad Bros. becomes the fourth Canfor sawmill in northern B.C. to be shut down indefinitely. The closure -- expected to be complete in June or July while the mill exhausts its existing log inventory -- puts another 205 workers off the job.
The mill is an example of the continuing difficulty in the North American lumber market. Rustad lost its third shift more than a year ago and more recently has been working on a four-day work week. Canfor has already shut down two mills in Mackenzie and one in Chetwynd, recently announcing the restart of one Mackenzie sawmill on a single shift this summer. That restart will not be impacted by Thursday's closure announcements.
Those closures -- which also include shutdowns at Vavenby and Radium in the Southern Interior -- will bring Canfor's lumber production rate to 50 per cent of its capacity. A total of 570 jobs will be lost by the three closures.
"These decisions are never easy but are taken in the face of a market downturn that is unprecedented in terms of both duration and intensity," said Canfor president and CEO Jim Shepard. "Canfor must continue to restructure its production capabilities to match the demands of the market and ensure the needs of key customers continue to be met," added Shepard.
The Rustad Bros. mill will move to a four-day, 10-hour shift, up from eight-hour shifts, to run out the log and rough lumber inventory.
Some staff members will be eligible for severance, but unionized workers are not because of the indefinite nature of the closure.
"It's certainly not good news for the members or the community," said United Steelworkers local 424 president Frank Everitt, noting the rumours of closures had been circulating for some time.
Everitt said there was an expectation that four sawmills would be closed.
Canfor officials said the hope is these closures will be enough.
Mills and communities in northern B.C. have been hit hard by the forestry downturn led by a collapse in U.S. housing. More than 3,000 forestry workers in northern B.C. have lost their jobs in the past two years.
The downturn has been exacerbated by a more general global economic slowdown sparked by a severe tightening in credit. A rising Canadian dollar compared to the U.S. currency, which erodes income for northern B.C. lumber producers who largely sell their product across the border, and a 15-per-cent export tax on exports to the U.S., have also hurt northern mills.
Canfor has lost a combined $389 million since 2007, including a $58.1 million loss in the first three months of this year.
Everitt noted that one of his concerns is there appears to be no light at the end of the tunnel.
The forestry job losses in Prince George -- which has shown more resilience than some northern communities -- has now topped 1,000.
The province has used $129 million in federal money to help forest workers retrain, for pension bridging and more make-work projects.
Everitt said the union will be encouraging its members to take advantage of the programs, but will also be encouraging the province to put up more money.
Analysts have speculated that the market has hit bottom, forecasting the beginnings of a slow turnaround in 2010.
However, while lumber prices have inched up slightly, any gains have been wiped out by the resurgent Canadian dollar that has climbed 10 per cent compared to the U.S. dollar in the past month. "That's the killer," observed Paul Quinn, an analyst with RBC Dominion Securities
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Last Updated ( Thursday, 28 May 2009 )
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