Rough & Ready Lumber, Josephine County's last sawmill, a casualty of southwest Oregon's enduring timber wars

Rough & Ready Lumber, Josephine County's last sawmill, a casualty of southwest Oregon's enduring timber wars

View the Slideshow >>

(Gallery by The Associated Press)

Print

By Scott Learn, The Oregonian 
Email the author | Follow on Twitter
on May 20, 2013 at 5:06 PM, updated May 21, 2013 at 12:29 PM

Email

CAVE JUNCTION – Here lies Rough & Ready Lumber. The last sawmill in Josephine County closes next week, a grim milestone in the persistent stalemate over logging that's peculiar to this unique corner of Oregon.

In much of western Oregon, the 1990s timber wars have given way to a shaky détente, with a focus on thinning and light-touch restoration in federal forests.

In southwest Oregon, the battle still runs hot.

High unemployment raises the stakes here. So does a storied timber history and a heavy reliance on dwindling logging revenues from federal forests to fund county government. 

Three Oregon Congressmen want to more than double logging in the region's O&C Lands, forests shifted to the feds after an early 20th Century railroad deal went sour.

But the consequences are uniquely high for environmentalists, too, who said no to big increases in logging when Gov. John Kitzhaber convened an O&C Lands task force last year to attempt a compromise.

Josephine County and its neighbors sit in the Klamath-Siskiyou eco-region, one of the most biologically diverse places on the planet. The landscape, warmer than Douglas fir strongholds to the north, supports 36 species of conifers alone and some of Oregon's top runs of salmon and steelhead.

Meanwhile, Josephine County voters decide today whether to increase their lowest-in-the-state property taxes to partially plug the gap left by logging reductions.

"Everybody views this as black and white, and it's just not that way," says Tom Tuchman, Kitzhaber's forestry adviser. "Finding a balance is an incredibly difficult thing to do."

Mill moments

Jennifer Phillippi's grandfather opened Rough & Ready 90 years ago, a safe bet in a county that's two-thirds federal forests. At the mill, the snowcapped Siskiyou Mountains hang on the horizon, and the smell of sawdust still lingers.

But the mill stopped sawing last month, with Phillippi and her husband, Link, citing a lack of reliable log supply from public lands.

Federal timber production and jobs at Oregon mills have fallen dramatically since 1990, when the northern spotted owl was listed under the Endangered Species Act. 

Bigger, more efficient mills and the huge housing construction drop in the recent recession contributed as well.

Rough & Ready was among 22 sawmills in Josephine and Jackson counties in 1975, the Phillippis said, down to none now.

The mill was small, running one shift with 85 jobs. And the recession stung. But the problem wasn't demand, said Jennifer Phillippi, one of three co-owners.

View full size

"We have customers who are dying for it," she said. "The only thing we don't have is the logs."

In 2002, Rough & Ready shut down its small-log mill running three shifts. It needed millions in investment to compete in commodity timber, said Link Phillippi, the mill's president. 

Nearby lumber, needed to keep costs low, wasn't steady enough, he said.

Instead, they upgraded a large-log mill and built a niche in appearance-grade lumber for exposed beams and high-quality windows and doors.

For that, they needed the clear, knot-free pine and fir that runs toward the outside of larger logs. The ideal: 80- to 100-year-old second-growth logs -- not old growth, the Phillippis stress -- 22 to 24 inches wide.

The mill put out "one of the best products in the sawmill business," says John Dunkin president of Rogue Valley Door, one of the largest U.S. manufacturers. These days, his company buys wood from Canada.

Forest politics 

The Phillippis say environmental groups helped stifle timber sales, protesting five of the last six U.S. Bureau of Land Management sales with Rough & Ready as the winning bidder. BLM handles most of the O&C Lands.

An industry group protested the sixth sale for lack of log supply, but withdrew it after Rough & Ready won the bid. BLM also removed two large sales in 2006 after protests, Link Phillippi said.

"Rarely do we buy a federal timber sale that we can operate right away. It usually takes a year or two. Sometimes they get eliminated."

Oregon Timber

JOBS

1990: 63,700

2010: 25,300

SAWMILLS

1988: 165

2008: 116

2012: 69

O&C LANDS

Annual growth: 1.2 billion board feet

Industry favored cut: 500 million

Current cut: less than 200 million

SOURCES: U.S. Forest Service; Oregon Forest Resources Institute; Bureau of Land Management.

Oregon Democratic Reps. Peter DeFazio and Kurt Schrader, and Republican Greg Walden are pitching a deal in the U.S. House to more than double logging on O&C land.

Their proposal, supported by industry, would put 1.5 million acres of previously logged forests in a trust run for timber production and managed under more lenient state laws for private forests -- a shift designed to limit environmental appeals.

The U.S. Forest Service would manage the remaining 1.1 million acres with a focus on retaining old growth. The Rogue Wilderness would get 56,000 more acres.

The plan could fly in the Republican-controlled House. It stands little chance in the Democrat-controlled Senate, Oregon Sen.Ron Wyden has warned.

DeFazio's approach is the "only hope for federal timber in our region," Link Phillippi said. But after decades of battling, the Phillippis said, the prospects are too dim for Rough & Ready to bank on.

Biggest and best

Eighteen miles down the Redwood Highway from the mill, Walter and Mary Camp manage their own 180 acres of forest with light-touch logging to improve forest health. Threatened coastal coho salmon teem in their pond.

DeFazio's proposal, which would apply Oregon's private logging rules to public forests, scares them, the Camps said.

Their property is surrounded by a mix of private and O&C forests, typical in southwest Oregon.

In 2008, Rough & Ready's timberland arm clear-cut 67 acres next door to the Camps, spraying herbicides afterward. That approach is allowed under Oregon's Forest Practices Act, and would extend to lands placed in the trust, the Camps fear.

The proposal "should terrify people across the nation," Mary Camp said.

Endangered Species Act rules on the trust lands would also be far less stringent. Many cuts would be in potential spotted owl habitat. And streamside protection would drop from putting nearly 40 percent of harvestable acres off limits to about 5 percent.

View full size

In cooler, wetter northwest Oregon, BLM has focused on thinning projects. That tends to go over well in thick, second-growth Douglas fir stands clear-cut and replanted decades ago. Mills set up for small logs can process them into commodity lumber and other products.

Thinning is tougher to execute profitably and ecologically in southwest Oregon. Ecologists here focus on keeping larger pines and clearing smaller trees crowding them.

That's the rub for Rough & Ready: Larger trees like its mill needs, particularly pines, aren't left to grow on private lands, where more profitable 30- to 60-year rotations are the norm.

The Klamath-Siskiyou Wildlands Center has led many timber sale appeals.

George Sexton, the group's conservation director, says he offered to back off a lawsuit over a recent Rough & Ready sale, Rio Rumble, if BLM put trees less than 30 inches wide off limits.

The agency declined, saying older trees needed to be cut to prevent harmful mistletoe spread along the trees' crowns.

Rough & Ready and at least seven Oregon mills are relying on larger diameter trees from public lands, environmental groups estimate.

Rough & Ready's mistake was banking on bigger trees, particularly large pines, said Steve Pedery, Oregon Wild's conservation director. New regulations have cut harvests because past volumes were unsustainable, he said, harming streams, salmon and wildlife.

"It's not a good business model to depend on eliminating 20 years of conservation standards."

300 million feet apart

The governor hoped his O&C committee would compromise. It didn't.

The environmental representatives could swallow just over 200 million board feet a year, tapping an "ecological forestry" model with limited clear-cuts. Industry and county representatives stuck to 500 million, enough to meet county revenue goals.

A staff report said meeting the revenue goals and abiding by environmental laws as interpreted now "appear to be mutually exclusive." It also said thinning projects would run out in 10 to 25 years.

Wyden has promised a strategy later this month to address the deadlock. The two sides could reconcile in conference committee.

The House proposal could use more streamside protection, DeFazio agreed. But it would pay for private forest streamside buffers, manage half the trust lands in at least 100-year rotations and add wilderness and some old-growth protections.

Industry has filed lawsuits for bigger cuts, arguing that O&C law sets aside the lands for "sustainable yield."

If the lawsuits succeed, "the environmentalists would be here in a second saying, 'We want old-growth protection and wilderness,'" DeFazio said. "At that point, I might not be able to get it."

Back at Rough & Ready, 19-year millwright Larry Mason is hoping for a solution. Josephine County's unemployment rate tops 11 percent. At last count, a quarter of its residents were on food stamps. Mason figures his chances of getting a local job are close to zero.

It could make you cry every night, Mason said.

"In this valley, there's no jobs. The kids my daughter went to school with, none of them have jobs. It's tough, man."

-- Scott Learn

Timber Country -- seeing beyond the trees

Timber Country -- seeing beyond the trees

 By The Oregonian

Sixty-seven years ago, when Allyn Ford's father opened his first sawmill in Roseburg, he found a straightforward way to make money: A grinding, steel maw chewed through locally cut trees, spitting out millions of board feet of lumber annually.

Those days are long gone. Today, trees from nearby state and federal forests are nearly as scarce as spotted owls.

Nine states

The "Nine states of Oregon" project was originally published in The Oregonian in November 2003.Editors have republished the complete series in response to readers' requests.

Now, Ford's family-owned Roseburg Forest Products is betting its future on high-tech home-building materials and tight relationships with customers. Trouble is, Ford's competitors in South America, Canada and Asia are all vying for the same markets.

"We'd better be good," says Ford, an affable man with a Stanford University M.B.A. who admits to healthy revenues but elusive earnings. "We're competing with everyone in the world."

Similar stories echo through Timber Country, which stretches along the western face of the Cascades, curls west around Eugene and brushes the Coast Range. Survival of the fittest applies equally to the flora and fauna of the Elliott State Forest's mist-filled hills and the struggling mill towns of Oakridge, Mill City and Sweet Home.

Most of the trees in Timber Country belong to the federal government. During the past decade, in response to environmental regulations and lawsuits, the feds have drastically scaled back logging, dragging down harvests to record lows in 2001. Since 1989, about 160 mills statewide have closed, taking with them 35,000 jobs.

While regions such as Southern Oregon, Central Oregon and the Columbia Corridor have rallied around new industries, new residents and new identities, Timber Country has struggled, with limited success, to right itself.

The bigger towns, especially those along Interstate 5, are slowly diversifying. But they're still counting on timber companies to fortify the region. Many smaller towns, which lost their livelihoods along with the logs, are trying to turn to tourists, commuters and retirees.

The industry that once ruled Oregon's economy, politics and identity watched as Portland's 1990s boom made high-tech king. It was a financial and psychological blow that has deepened tensions in the region and made the politics of Timber Country increasingly conservative, defensive and angry.

At best, the mood in these blue-collar towns is skittish.

"Everyone's feeling insecure," says Randy Fouts, who drove a forklift for Roseburg Forest Products for 30 years before becoming a business agent for Lumber and Sawmill Workers Local 2949. "They don't know what the future holds."

Gap in wages doubles

Despite the industry's decline, Oregon remains the largest softwood producer in the country.

Wood products workers account for 15 percent of the state's manufacturing employment, compared with 20 percent in high-tech. Timber companies and their executives contribute heavily to political campaigns and maintain a powerful lobby in Salem and Washington, D.C.

The industry's resilience has forced state leaders to question economic development policies that have favored high-tech over timber. Gov. Ted Kulongoski, for instance, has signed legislation making it easier to redevelop abandoned mill sites.

And it has kept the pressure on lawmakers to balance environmental, recreational and logging interests. Last legislative session, the industry pushed a bill to increase logging on some state forests, but it died after heated debate.

Still, with most of Timber Country's forests in federal hands, state influence is limited.

"I don't think Ted can do much good," Fouts says.

Amid the clash of interests, timber companies are finding ways to survive. Roseburg Forest Products bought up private timberland, branched into a wide array of lumber products and modernized operations.

Instead of selling off its mills, as others have done, it has been investing in new ones. The latest is a highly automated $75 million building products plant. Unlike its forerunners, which turned big logs into millions of two-by-fours, the plant assembles composite materials into sturdy, easy-to-use joists, beams and columns for homes and other structures.

The operation sprawls across 70 acres. A single building encloses 11 acres and contains such proprietary equipment that managers won't talk about details.

"We've decided to go big and fast," says Ford, who continues to pump millions of dollars into capital improvements.

With annual sales of about $800 million and a work force of about 3,000, Roseburg Forest Products is one of the state's largest privately held companies. For decades, it has been Roseburg's biggest employer.

Even so, the company hasn't turned a profit in the past two years. And this summer, it announced layoffs in its plywood unit, including the closure of a plant in Green on the outskirts of Roseburg.

The layoffs will leave more than 600 people -- 20 percent of the work force -- without jobs. They shocked a community still raw from a decade-long slump.

"It wasn't a pleasant decision," Ford says. "We're part of the community, and we feel it."

Judy Sherman, 60, a short, strong-looking woman with graying hair and rugged hands, learned of the layoffs -- including hers -- while buying bread in a downtown bakery.

"All kinds of things ran through my mind -- what bills hadn't I paid, how long would the money last," says Sherman, who had worked for timber companies for 30 years, the last eight in one of Roseburg Forest Products' plywood mills.

Sherman, who is single and cares for two young children and a grown grandson and granddaughter, can't afford to retire. She also doesn't expect to get her old job back. "Everything is so downsized and mechanized," she says. "We knew it was just a matter of time before our jobs were gone for good."

Other jobs, such as those with Dell Computer's new call center in Roseburg, have helped offset declines in timber employment. But service-oriented jobs generally are lower-paying and can be ill-suited to mill workers' skills.

From 1990 to 2000, the gap between the county's average wage and Oregon's more than doubled to $3,688. The divide between county and national average wages: $7,604.

Sherman hopes to go back to school, using money from a federal aid program for dislocated workers, to earn a degree in early childhood education.

She says she should have changed her career years ago. Even so, she doesn't understand why federal policies have come down so hard on harvest levels.

"There's no reason or rhyme why they can't harvest and replant and harvest," she says.

Looking for income, federal help

When Paul Ehinger, 80, worked for Edward Hines Lumber in Westfir, the company ran a sawmill, a plywood mill and a logging operation, dominating the bustling town east of Eugene.

Today, the company's office is a bed-and-breakfast.

Runaway costs shut down Westfir's timber operation by the early 1980s. The town where Ehinger raised his family has dwindled to 307 people and three businesses: the bed-and-breakfast, a U.S. post office and a massage therapist.

The most vulnerable mills lay in small towns like Westfir -- next to, or within, federal forests and heavily dependent on publicly owned trees. Boring, Estacada, Lyons, Idanha, Sweet Home, Oakridge, Dillard, Drain, Creswell, all suffered mill closures. Like Westfir, many have found little to fill the void.

"The ones in the center of government forests have pretty much disappeared over the horizon," says Ehinger, now a private timber consultant in Eugene.

State employment economists say almost half of the timber workers who lost their jobs in the 1990s fell off employment rolls for good. They moved to other states or retired or became part of "a cadre of chronically underemployed rural residents," labor expert Art Ayre wrote in a June article in the Journal of Forestry.

When harvests in Oregon peaked in 1986 at 8.7 billion board feet, 56 percent of the logs came from federal lands. At the low in 2001, the share had plummeted to 5 percent.

The hardships have laced communities with bitterness and a sense of betrayal. Politics are more polarized and conservative, Ehinger and others say.

"We're Republican-based but labor-friendly. That's a tough mix," says Fouts, the union leader. "Add environmental issues, and that's really a problem."

Many blame the federal government for shoddy forest management. They blame environmentalists for extremist tactics in the courts and in the forests. They blame Portland for forgetting its roots and fostering liberal attitudes unsympathetic to Timber Country's problems.

"I'm not saying they're ignorant. They just don't understand," Fouts says.

Republican state Rep. Susan Morgan has lived for 25 years in Myrtle Creek, a onetime timber town south of Roseburg. She's looking to Congress to increase federal timber harvests -- not to the levels of the past, but substantially above those of today.

The forest fires that have raged through the West in recent years have fueled the Bush administration's efforts to thin more trees and increase harvests. After Bush visited Oregon this summer to promote his cause, Timber Country residents began talking more optimistically about federal policies easing.

"There's hope here that we can regain some of the losses," Morgan says. "There has to be some kind of rational approach to managing the federal forests."

Counties also are lobbying for the continuation of their timber subsidies, put in place in 2001 and due to expire in 2006.

Yet analyst Ehinger remains cautious. "Honestly," he says, "I don't see the environmental movement turning over and playing dead in the sand."

Timber Country tries to diversify

Like many towns, Oakridge isn't banking on timber's return.

In the mid-1990s, the city bought the abandoned Bald Knob sawmill at the edge of town, eager to tear it down and forget about the past.

But the community, which lies in the lush Willamette National Forest southeast of Eugene, hasn't been able to lure a new manufacturing tenant to the site. So the mill gathers rust, its pale green sides ripped and ragged, its rafters dripping rain.

"The pigeons rent it," says Jay Bennett, a former city administrator.

Government money helped Oakridge buy the 220-acre site, which the town plans to turn into a campuslike industrial park. Some of the work is done, and a few small businesses have moved in.

Bryan Huber, chief executive of Creative Composites, came to Oakridge to build high-end snowboards, but he ended up manufacturing aircraft parts for the U.S. Air Force, a more lucrative niche. With annual sales approaching $1 million and employment growing, he plans to expand the business into an available building at the industrial park.

Huber is a sailor, as well as a snowboarder and businessman. He says Oakridge, resting in a tight valley pocket within the forest, is the perfect spot to play and make money. Highway 58 brings travelers to nearby rivers, lakes and the Willamette Pass ski area.

Randy Dreiling, chamber of commerce president and owner of Oregon-adventures.com, is convinced the town can become a destination for mountain bikers, rivaling hot spots like Bend in Deschutes County.

Dreiling tried to get traction for his business back in the early 1990s. But the mill had recently closed, and laid-off timber workers were in no mood for the peddlings of forest-loving mountain bikers.

" 'Tree-hugger' was the politest thing they called us," Dreiling recalls.

Now, many of the timber families are gone. And the townspeople who remain seem more receptive to new ventures, Dreiling says. Early this year, he moved to Oakridge from Eugene, set up a Web site and began organizing mountain-bike tours.

With 500 miles of trails winding through the surrounding forests, "the atmosphere up here is great for biking," he says. "It's just a matter of time."

-- Gail Kinsey Hill

U.S. wins trade case, Canada must stop subsidizing lumber mills

Published: Friday, January 21, 2011, 6:02 PM     Updated: Friday, January 21, 2011, 6:09 PM

 By Richard Read, The Oregonian 
Follow

Ontario and Quebec must stop subsidizing lumber manufacturers or levy nearly $60 million in tariffs on Canadian exports to level the playing field for U.S. producers, a trade tribunal ruled Friday. 

Steve Swanson, chairman of the U.S. Coalition for Fair Lumber Imports, welcomed the ruling. "By providing new subsidies, Canada knowingly violated the terms of the lumber trade agreement to provide an unfair advantage to Canadian producers in this very challenging market," said Swanson, president of Swanson Group mills in Glendale. 

The tribunal of the London Court of International Arbitration found that the provincial subsidies violated a U.S.-Canada softwood lumber trade agreement reached in 2006. Under the agreement -- effective for seven years -- Canada collects export taxes on shipments of softwood lumber to the United States when lumber prices fall below certain levels. The agreement prohibits Canadian federal and provincial governments from circumventing these tariffs by increasing subsidies beyond those in effect in 2006. 

The U.S. coalition began dispute proceedings in 2008, citing plans by Quebec and Ontario to provide hundreds of millions of dollars in grants, subsidized loans and loan guarantees. The decision issued Friday requires Canada to end the illegal subsidies or levy additional tariffs. If Canada doesn't act within 30 days, the United States can slap import duties on Canadian lumber. 

U.S. Trade Representative Ron Kirk applauded the ruling, saying the result is "important for U.S. workers, firms and our softwood lumber industry." 

Peter Van Loan, Canada's international trade minister, said the ruling could have been much worse for Canada. He noted the tribunal dismissed 97 percent of the initial U.S. claim of $1.86 billion. 

The decision is the second consecutive win for the U.S. at an arbitration tribunal. The court previously ruled against Canada over the calculation of export quotas in 2007. 

Canada's lumber industry faces a bigger threat from a third U.S. case, filed Tuesday. The United States claims British Columbia has been misgrading and underpricing publicly owned timber in the province's interior region, hurting U.S. producers. Canada denies the allegations, saying trees damaged by a mountain pine beetle infestation are being graded and sold correctly. 

If the United States wins the next case, Canada's bill could reach nearly $500 million. 



--Richard Read 

United States picks international trade fight with Canada over softwood lumber

Published: Tuesday, January 18, 2011, 8:11 PM     Updated: Tuesday, January 18, 2011, 8:11 PM

 By Richard Read, The Oregonian 

Randy L. Rasmussen, The OregonianThe United States contends Canadian timber policies violate a 2006 agreement and harm Pacific Northwest mills like Seneca Sawmill Co. in Eugene, which processes Douglas fir into lumber.

 The United States aims to take Canada to the woodshed over what trade officials contend is under-priced British Columbia timber that unfairly competes with U.S. lumber companies and workers. 

U.S. Trade Representative Ron Kirksaid Tuesday the Justice Department would file for arbitration under a softwood lumber agreement signed in 2006 after years of disputes. Kirk said British Columbia was selling timber harvested from public lands for prices below amounts set by the agreement, undercutting mills in the Pacific Northwest and other regions. 

"This type of benefit harms U.S. workers and firms in the lumber industry and is inconsistent with Canada's obligations," Kirk said. "Canada is in breach of its commitments." 

Canadian government and industry officials rebutted the claims. 

"There's no substance to this," said Pat Bell, British Columbia's minister of forests, mines and lands. "We should be working on developing other markets together, like Korea, like China, like India." 

Disputes over U.S.-Canadian lumber trade are as old as the hills. But in this round, the United States contends British Columbia resorts to a new tactic, improperly grading timber as beetle-killed salvage material and selling it for pennies per cubic meter to Canadian mills. The mills turn the timber into lumber sold cheap in America, hurting U.S. businesses and workers, said Steve Swanson, an Oregon lumber producer who chairs the U.S. Coalition for Fair Lumber Imports. 

Swanson, chief executive of Glendale-based Swanson Group, said British Columbia should reverse its practices, charge proper timber fees and levy export taxes to even the playing field. 

"North American lumber producers have curtailed production, closed mills and been forced to let go thousands of workers," Swanson said. 

The Justice Department is requesting a judgment by a tribunal of the London Court of International Arbitration. 

John Allan, president of the BC Lumber Trade Council, said U.S. officials brought the latest action in response to political pressure. 

"It seems to be an attack on how we manage our forests with respect to the mountain pine beetle," Allan said. "They're basically saying, 'You should have left those trees to die on the stump.'" 

Bell, the forests minister, said British Columbia grades timber just as it did before the 2006 agreement. Lumber prices are higher than expected, proving the agreement works, he said. China is also buying lumber, he said, due in part to Canadian marketing. 

Chinese purchases also helped sustain a Swanson mill in Glendale that would have closed as unfair Canadian competition intensified, said Zoltan van Heyningen, the U.S. lumber coalition's executive director in Washington, D.C. 

"Hopefully this case will help enable it to keep open," van Heyningen said. 

--Richard Read