Plum Creek Cuts Back ln Montana

Plum Creek Timber. Seattle. Wa.. has cut production at two of its Montana mills and is "seriously considering some consolidation" of its other operations in the state.

Due to market conditions, the company temporarily ceased production Sept. 30 at its fingerjoint stud mill in Kalispell, Mt. The closure will last for at least the remainder of the year, with hopes to restart the facility in 2009 if conditions improve.

In addition. Plum Creek laid off 35 workers at its MDF plant in Columbia Falls, Mt.

Laid-off employees were encouraged to apply for jobs at other Plum Creek facilities in the Flathead Valley, but the future of those plants is also uncertain. "This is a tough, tough market," said Rick Holley, president and c.e.o. "I'm an optimist, and I can usually see a light in the darkness. But I look down that tunnel today, and it's just black. I can't see any light."

According to Hank Ricklefs, v.p.northern resources & manufacturing division, until recently, MDF was one of the few bright spots because it is used for moulding, doors and furniture, but not generally for new home construction. "But now we're caught in the late-cycle effect and we have to try to come to grips with that," Ricklefs said. "We can't run 24 hours per day, seven days per week. We can't fill it up."

The company's manufacturing division lost $9 million during the first fiscal quarter of 2008, said Holley, and continued to lose ground during the second quarter. Last year, total earnings were down 935 million.

"Our land sales in Montana have come to a screeching halt," said Holley, with the exception of a large conservation deal to sell 320.000 acres into public ownership. After several years of red-hot real estate, he said, "we're selling maybe a couple lots per month. It's really slow."

At some point, he said, it no longer makes sense to operate two similar facilities at half production. He said that sawmills in Pablo and Columbia Falls could be combined, as could plants in Fortine and Evergreen.

"You don't do things like this lightly, but at some point you have to start looking at alternatives that maintain the jobs you have," said Holley. He predicted that Plum Creek "will have to seriously think about consolidation" unless markets improve dramatically by the first quarter of 2009.

Dealer Turns From Retail

Collins Cashway, Loveland, Co., will shutter its 32-year-old retail store by the end of the year to concentrate on pro sales from its adjacent 35,000sq. ft. lumberyard.

The 20,000-sq. ft. store currently accounts for just 77o to l}Vo of sales, down from a high of 40Vo in the l 970s.

In addition to lumber sales, Collins Cashway will continue to sell tools, fasteners and other basic hardware items, as well as offer insulation installation and kitchen cabinets, two profitable niches cultivated over the last few years.

"We picked our niches and got lucky," said co-owner Doug Frost.

Frost called the consolidation "the next logical step. We just don't need the 20,000 sq. ft."

The retail building will be leased or sold to a local church.