Canfor has removed equipment from its Rustad Bros. sawmill in Prince George, a measure which former employees say makes it less likely the company will re-open the plant which shut down two years ago.
Canfor says, however, that should they decide to restart the Rustad Bros. sawmill, the removed equipment would not be a constraint to doing so. The equipment would simply be moved back.
Removed has been a wood chipper, computers and equipment for grade-stamping finished lumber, say employees who spoke to The Citizen following a news story last week where Canfor said that poor lumber markets were keeping the sawmill closed.
The employees said the removal of the equipment is an important fact that needed to be aired because it has a bearing on the re-opening of the mill.
The shut down, which Canfor continues to call indefinite, put more than 200 workers off the job.
United Steelworkers local 1-424, which represents workers at the shuttered mill, has applied for an arbitrated ruling on whether the mills is permanently closed. The union says it can apply for the ruling under the terms of its contract.
Steelworkers local 1-424 president Frank Everitt expects to hear soon that a date has been set for the arbitration. "We were told [the equipment] will come back, but I don't think that brings any comfort to the guys," said Everitt.
The union plans to use the removal of the equipment as an argument in the arbitration that the mill is being dismantled, forcing the company to declare a permanent shut down. Once a permanent shut down is declared, former workers will receive severance benefits.
The other alternative is for the company to set a restart date, said Everitt.
One employee remembers management telling workers, during the closure proceedings two years ago, that when equipment is moved out of the mill, the mill is considered permanently closed.
The former employees, who did not want their names disclosed, fearing potential repercussions from the company, said the continuing uncertainty around the sawmill is very frustrating. If the mill is not going to re-open, they want to collect their severance, said the employees.
Severance would be substantial for employees with long tenures at the mill, as employees are eligible for two weeks pay for each year of service. Canfor's latest annual financial report shows that it had an accrued liability for restructuring, mill closures and severance liability of $18.4 million at the end of 2010. The severance liability would also include an indefinitely shuttered plywood and oriented strand board plant in Fort Nelson.
Canfor officials said the wood chipper was moved to Mackenzie about one month ago to replace failed equipment there. It could be moved back quickly, if Rustad Bros. was restarted, said Canfor spokesman Christine Kennedy.
The grade-stamp equipment was moved to Chetwynd. That equipment and the computers could also be returned quickly, said Kennedy. "This is just minor moving things in and out. It's pretty routine in any big company," she said.
A spate of sawmills were closed down during 2008 and 2009 during a severe housing collapse in the U.S., which was exacerbated by a global financial crisis.
Some sawmills have been re-opened, including Canfor sawmills in Quesnel, Mackenzie and Chetwynd.
Canfor officials have said the possibility of restarting the shuttered Rustad Bros. sawmill in Prince George is being evaluated on a quarterly basis, but the company must see sustained lumber demand in the U.S. before making a decision.
Canfor noted that while there has been good success in building a lumber market in China, demand in the U.S. residential market is not picking up.
U.S. housing starts are tracking at an annualized rate of 500,000, well back from its normalized level of 1.2 million to 1.4 million.
