Economic currents rip yet another NW icon
THE NEWS TRIBUNE
There’s no way to put a good spin on the Weyerhaeuser Co.’s 40 percent downsizing at its Federal Way headquarters.
Although CEO Dan Fulton told Wall Street analysts that a leaner company will be better positioned for the future, that’s hardly reassuring to management-level employees who are losing good-paying jobs and benefits or to South Sound communities and businesses that will share their pain.
The iconic 108-year-old Northwest company is yet another victim of the housing downturn that has cost so many Americans their jobs. Home construction has decreased by more than 50 percent since 2006 – a double whammy for Weyerhaeuser because it hit both its wood-products and real-estate divisions and contributed to a $96 million second-quarter drop in earnings.
Now some observers are predicting the company could re-invent itself as a less diversified company and, like other owners of vast tracts of timberland, eventually convert itself into a real-estate investment trust.
If that happens, Weyerhaeuser would not have to pay corporate taxes and would be attractive to investors. But it would face more pressures to log its holdings and sell more of them off for development in order to turn quick profits. That’s not an attractive prospect for those who have admired Weyerhaeuser’s traditional long-view approach to business.
The turmoil at Weyerhaeuser is only the latest to hit a Northwest-based company, following the announcement of layoffs and store closures at Starbucks. Last month, shareholders of the Safeco Corp. approved its sale to the Liberty Mutual Group of Boston – which is likely to mean job losses at the Seattle-based insurance company. Washington Mutual has slashed thousands of jobs in the last eight months – and could be cutting more.
Any time 1,500 people lose their jobs at one company, it’s bound to send off shock waves in the surrounding community. Federal Way will feel the pain, of course, but the Weyerhaeuser employees live all over the South Sound. It’s small comfort to know that they have been caught up in economic forces that have affected millions of Americans – forces that could ease up in months to come. Here’s to better times for them, and for all of us.
