Flathead Valley feels impact of plant closing

The permanent closure of the Smurfit-Stone Container Corp. plant in Frenchtown is a "devastating" blow to independent logging and hauling contractors in Columbia Falls.

But executives at Plum Creek Timber Co. and F.H. Stoltze Land and Lumber Co., told the Hungry Horse News that the shutdown will not result in lost jobs at their companies.

One local contractor who was rocked by the closure is Dave Cheff, vice president at Ureco of Columbia Falls. Cheff became president of the Montana Logging Association (MLA) in May. He's also president of the Intermountain Logging Conference, which includes a number of Montana businesses.

The Frenchtown closure is 'very devastating," he said. "It reduces my opportunities on the ground for more product. It limits the amount of tonnage you can haul. It limits what you can send out of the woods. When I have bid for contracts, I looked at what part of the sale is pulp. Now there's no outlet for pulp. Plum Creek and Stoltze would set up jobs specifically addressing pulp. Those opportunities are gone. If we start losing infrastructure, it is hard to get it back. This lowers the contractor pool."

Ureco is taking whatever work it can find. For example, it received a $610,123 contract last summer that saved 16 jobs. Funded by the American Recovery and Reinvestment Act, the contract involves construction of a boat ramp and campground on Doris Point near Hungry Horse Dam.

Keith Olson, executive director of MLA in Kalispell, described the impact of the news on his association's 500 members, many of whom supplied Smurfit-Stone with chips, roundwood pulp and hog fuel wood over the years.

"Ten years ago, Smurfit ran its furnace on 90 percent chips and 10 percent round wood straight from the forest," Olson said. "The availability of chips shrank as mills shut down. Last year, Smurfit used 90 percent logs from the forest and 10 residuals. Logging contractors geared up for delivery of round wood. They saw it as the most immediate survival strategy they had. On Dec. 14, they got a call and they're told, guess what, we're not taking any more logs forever."

MLA has had between 560 and 640 members over the last 15 years, Olson said.

"These are contractors whose boardrooms are kitchen tables," he said. "Now we're down to barely over 500. I just signed 30 membership cancellation notices."

Some contractors saw Smurfit Stone as a way of getting through the recession, he said. "Others are looking for the best way to provide for their families within or beyond the framework of this industry."

Ureco is taking whatever work it can find. For example, it received a $610,123 contract last summer that saved 16 jobs. Funded by the American Recovery and Reinvestment Act, the contract involves construction of a boat ramp and campground on Doris Point near Hungry Horse dam.

Meanwhile, Plum Creek said it must adjust its operations.

"Smurfit-Stone was our biggest pulp wood customer, and the closure will affect some jobs — the ones closest to Missoula," said Tom Ray, vice president of Northwest operations for Plum Creek. "Our logging jobs will continue, but there will be less logs to truck. We'll leave the pulp in the woods and burn it in slash piles. Pulp wood is about 10 to 15 percent of our business on the resource side."

Smurfit-Stone debarked the pulp, chipped it and digested it for paper, he said.

Chuck Roady, vice president at Stoltze, said the closure will not cost jobs at his company, but "Infrastructure in Montana took a huge hit. It leaves contractors with no place to put their product."

With the prospect of much lower prices for biofuel, might the Frenchtown closure hasten the development of co-generation?

"There's a lot of effort focused in the state on bioenergy," Ray said. "The closure may hasten it, but I doubt it can replace all those jobs." The Smurfit-Stone closure put 417 people, earning an average of $70,000 a year, out of work.

Flathead Electric Cooperative doesn't want to exploit the industry's bad fortune simply to advance its aggressive co-generation programs.

"We don't want to benefit at their loss," said Kenneth A. Sudgen, general manager of Flathead Electric Cooperative in Kalispell. "We want a win-win, we want to help them and help us. And it may not pencil out for them."

The economics of biofuel as a means of generating electricity remain sketchy. The U.S. government on Dec. 4 pledged $564 million to 19 biofuel plants and demonstration projects in 15 states — but not Montana. The states involved are California, Colorado, Florida, Hawaii, Illinois, Iowa, Louisiana, Michigan, Mississippi, Missouri, New Mexico, Ohio, Oregon, Pennsylvania and Texas.

Flathead Electric is looking instead to innovative conservation to meet growing Flathead Valley demand for electricity. The cooperative, along with the Bonneville Power Administration, presented a $337,000 check in November to Plum Creek for installing a system that regulates the amount of power that goes to its medium density fiberboard plant.