Bend-based Oregon Woodworking Co. will close its doors in about two months, a victim of growing international competition in the lumber remanufacturing market, industry officials said Friday.
Wood remanufacturing involves the reshaping of lumber into various shapes to produce items like door frames and moldings.
Oregon Woodworking, which has made doorjambs and other wood products since 1993, will lay off the remaining 30 members of its work force as soon as it completes existing orders, said Lisa Coats-Taylor, the company's human resources director. The company had as many as 130 employees at one time and started this year with about 60, Coats-Taylor said.
”We've been gradually laying people off since the beginning of the year and we now have to make these layoffs permanent,” she said, adding that Oregon Woodworking is still looking to make sales to clear its remaining lumber inventory. ”I think 30 to 60 days (until the mill closes) is realistic. (But) it isn't what we want to do.”
Coats-Taylor was blunt when asked what led to the company's closing.
”We cannot compete with the competition coming from China, period,” she said, noting the cheaper prices foreign companies can offer on similar products due to cheaper labor. ”We have a great product. We just can't compete on price. For the last few years, I think we've had a hard time staying profitable.”
Oregon Woodworking is owned by Central Oregon lumber industry veteran Arthur Pozzi, who launched the Pozzi Window Co. brand in 1978. The brand is now a part of window and door manufacturing giant Jeld-Wen Inc.
Local lumber industry officials say they're sad to see Pozzi's latest venture close.
”He's been a grandfather to the wood remanufacturing business here,” said Bruce Daucsavage, president of Prineville's Ochoco Lumber Co. ”I hate to see him close, because his company pays good family wages to his workers.”
But officials added that the move isn't surprising, noting that they are dealing with increasing operating costs while also facing competition from cheaper products coming from abroad.
”Oregon (Woodworking) probably has, by far, the bigger impact (from foreign products) on them because of their product line,” said Dallas Stovall, president and CEO of Madras-based Bright Wood Corp., which also remanufactures wood products. ”Although we compete with offshore manufacturing, it's not as much as they are competing with, and their backs were really against the wall.”
Bright Wood, one of the largest private employers in Central Oregon, laid off 140 workers in February in the face of the slowing domestic housing market. But Stovall said demand has picked up again and the company has rehired some employees, and may have more jobs available in the coming month.
”We're busy, and we're picking back up,” he said.
Ochoco Lumber's Daucsavage agreed that the demand for remanufactured wood products isn't the problem facing local mills.
”Demand in the United States has not faltered,” he said. ”In fact, it's risen. But everybody's chief competition will be China eventually. There's an immensely large supply of timber in Russia, and China is strategically located right next to that supply.”
Compounding Chinese remanufacturers' advantage of access to cheap lumber is domestic companies' lack of access, Daucsavage said. In the pine lumber market, for example, local companies are increasingly frustrated with the reduced timber supply from federally managed national forests, he said.
The lack of supply, Daucsavage said, drives raw materials prices to very high levels for local mills, while international timber sellers increasingly sell to non-U.S. companies to maximize profit in the face of the weak U.S. dollar.
”It's a lack of available lumber issue,” he said. ”We're growing more timber in Central Oregon than we've ever had, but that timber is owned by the public, and there's been a shift on the part of (the) national forest (system) to not support the local economy with raw materials. It's a strong statement, but I stand by it.”
For Oregon Woodworking's Coats-Taylor, the focus now is to ensure the well-being of the company's employees.
She said the company will provide recommendations for its former workers, and is working with Oregon's Bureau of Labor and Industries to retrain employees for new careers.
As for Oregon Woodworking's current building in northeast Bend, Coats-Taylor said its fate is up to Pozzi, who has not announced any plans for the site.
”I think he's saddened by having to call an end to his production days,” she said. ”Right now, he's just focused on making sure our employees are taken care of.”