Pablo board mill lays off 36

The Plum Creek pine board sawmill in Pablo announced last week permanent layoffs of 36 employees.

Due to weak markets the mill is reducing shifts from 1.5 to 1, spokesperson Kathy Budinick said from a Seattle office. The mill will retain 89 employees and run on reduced hours due to reduced demand, Budinick said.

A press release from company headquarters in Columbia Falls said a total of 145 jobs will be cut from mills across northwest Montana. Permanent reductions took place in Fortine, Pablo and Columbia Falls. Temporary layoffs took place at Kalispell and Columbia Falls mills.

The mill in Fortine will completely close in March. Temporary layoffs were stated to be effective until March, the release said.

Plum Creek Northern Resources and Manufacturing Vice President Hank Ricklefs said layoffs for the “substantial reductions” were decided by a performance-based system that evaluates employees. The company has used this system for the past several years.

Ricklefs said the company does not expect markets to improve in the near future.

The housing market began to suffer near the middle of 2007, Ricklefs said. The inventory of new homes is now backlogged to 11 months, “builders are active and interested when the rate is around five month of inventory,” Ricklefs said.

What affected the Pablo mill more directly was the downturn in the repair and remodel market, which began to slide after the credit crunch in August or September last year. The smaller contractors and do-it-yourself projects generally use plain board stock, the main product of the Pablo mill. When that market went down, “that’s when we started noticing more of this tug down in pine-board prices,” Ricklefs said.

Ricklefs called the repair and remodel market drop off “pretty severe.”

“It’s a huge, huge change in the demand environment in wood products,” he said.

The pine board mill in Columbia Falls was affected with temporary layoffs.

For the laid off workers, both Ricklefs and Budinick said the permanent means permanent. The company will monitor the market but does not expect to call workers back.

“I think our outlook for the next 12-18 months is that there’s not enough prospect for significant improvement that would merit us considering ramping back to that 1.5 shifts,” Ricklefs said. “Our employees have been very, very professional about how they’ve responded to this news, It’s certainly difficult for our families and the community to have this loss of income.”

Ricklefs said Plum Creek provided severance packages and extended health care coverage to help terminated employees make the transition.