Not out of the Woods Yet

Article excerpt

Byline: Sherri Buri McDonald The Register-Guard

Lane County's wood products companies are used to dealing with their industry's ups and downs. But this downturn, caused by the plunge in new housing construction nationally and the widespread economic recession, is no ordinary down market. And those in the industry - still one of Lane County's largest - aren't expecting much relief in 2009.

"December was probably as weak as we've ever seen it," said Bill Powell, marketing manager for States Industries, a Eugene manufacturer of decorative hardwood panels used in cabinets, furniture and other products. The outlook for '09 "is anybody's guess," he said, "so much depends on the housing market."

Most people in the industry believe '09 will be even tougher than '08, said Scott Nelson, chief financial officer at Rosboro, a local producer of engineered wood products, lumber and plywood used in housing construction. "There's some hope we'll hit bottom at some point in '09 and start to see recovery," he said. "But it will probably be a slow and prolonged recovery in '09 and into 2010."

To make it through last year, States Industries, like many wood products companies, pared back significantly.

The 42-year-old privately owned firm has cut almost half its work force through several rounds of layoffs over the past year, and it recently announced plans to close its North Carolina plant on March 25. States Industries now employs 290 people in Eugene.

"I think we are very well positioned to ride out the market as it stands right now," Powell said. "We're operating pretty close to the bone - or efficient - but we're still shipping and operating within our means."

Among local wood products companies, States Industries is more the rule than the exception.

Last year, a slew of companies laid off workers and extended holiday shutdowns at Thanksgiving and Christmas.

Companies are bracing for what Jon Anderson, publisher of Eugene-based trade publication Random Lengths, is calling "an extremely difficult year - up there among the hardest ever."

Conditions in the market have deteriorated so rapidly that forecasters have had a hard time staying on top of them. Butch Bernhardt, spokesman for the The Western Wood Products Association, said the group plans in mid-March to revise its '09 forecast for the third time since October.

"At this point we're looking to downgrade it a bit further based on what we've seen this year," he said.

In its January forecast, the group declared, "Western mills are experiencing the largest downturn in lumber demand ever recorded. …