If pressed to name the biggest forest products companies in the U.S., or the most significant in Washington, you might come up with names such as Weyerhaeuser or Boise Cascade or Georgia-Pacific. For some local flavor you might throw in some names such as Simpson, Longview Fibre or Plum Creek.
If you did, you might be dating yourself, because the majority of those companies have restructured, downsized or been bought out, to the extent that they bear little resemblance to the companies that once represented Big Timber – and there’s another term that seems anachronistic now.
You’d also have neglected to mention the company that is the nation’s second largest lumber producer, one that is of increasing importance to what remains of the forest products industry in this state – Sierra Pacific Industries.
To all but the closest observer of the industry, "Sierra who?" would likely be the most common response, and understandably so. Sierra Pacific isn’t based here; the headquarters are in Anderson, Calif. It’s not publicly traded; instead it’s in its third generation of family ownership. While it does operate three lumber mills in Washington – in Aberdeen, Burlington and Centralia, they aren’t big concentrated complexes like lumber mills of old. And Sierra Pacific hasn’t done a big splashy acquisition or merger that would have made headlines.
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In fact the "second largest lumber producer" ranking, as posted on Sierra Pacific’s website, came as something of a surprise to this columnist, who has tracked the industry for more than two decades and has been aware of Sierra Pacific, but would not have come up with that name if asked for the nation’s biggest lumber manufacturers.
But that’s one more illustration of the dramatic changes in an industry once as closely identified with the state’s identity as airplanes and apples (and as long as the world keeps buying 737s, we should keep our lead as top U.S. producer for both, for a while longer).
It’s also one more point to ponder in the wake of Weyerhaeuser’s recent, dramatic announcement of plans to move its headquarters to Seattle – if you can stand one more round of ruminations about the implications of that news.
Large-scale shifts happen all the time within regions and industries, and the forest-products industry is as good an illustration of that phenomenon as you can find. Let’s dive into the Employment Security Department’s data (non-seasonally adjusted) for the industry. For the most recent month available, July 2014, logging accounted for 4,000 jobs, wood-products manufacturing added 13,600 and paper production was good for 8,200.
Higher math tells us that’s 25,800 jobs in all, not counting jobs at businesses that support or sell to those core forest-products sectors. That’s not a bad economic cohort to have in a state, particularly when those are likely to be decent-paying jobs in regions where such employment isn’t plentiful.
But contrast that to where the industry used to be, as recently as 1990, which happens to be the earliest data file readily available on the ESD website. In September 1990, logging generated 9,300 jobs, wood products accounted for 24,500 and paper production yielded 17,000.
Again the application of higher math produces a total of 50,800, and still higher math informs us that the forest products industry is now half the size it was just 25 years ago.
Blame the spotted owl (remember him? her?), the reduced harvests on federal and state lands, the exhaustion of the supply of old-growth big trees, log exports, lumber imports, the closing of and lack of replacement for old mills that were too expensive to patch up. All those factors have been blamed, and all deserve some credit.
The industry’s massive corporate restructuring is both cause and effect. Think of that list of companies at the start of this column. We know the Weyerhaeuser story. Simpson split itself into two companies, and one of those recently divested itself of its Tacoma kraft mill. Longview Fibre is now owned by an Illinois-based company. It might take another column to track the gyrations, upheavals and name changes at Boise Cascade, whose mill at Steilacoom (or West Tacoma if you prefer) was later closed by Abitibi-Consolidated, which went through multiple reconfigurations of its own, and already we’re way deep in the weeds.
But decline is neither the full or end of the story for Washington’s forest products industry. Sierra Pacific has purchased property at Frederickson for possible construction of a sawmill to supply residential construction. The new owner of the Tacoma kraft mill, RockTenn, pledged to make millions of dollars in investment
That capital is still flowing into forest products in this state is a bit of good news for the future of the state’s employment base. The industry’s saga is getting at least one more chapter, but you might not recognize the names of those who are writing it.
Bill Virgin is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at firstname.lastname@example.org.