FOREST GROVE, Ore. — Stimson Lumber Co. will lay off more than 60 employees at one of its Oregon sawmills amid rising costs caused by state programs and policies, CEO Andrew Miller announced on May 31.
The mill, near Forest Grove about 30 miles west of Portland, produces dimensional lumber for retailers including the company’s largest customer, Home Depot. Miller said the company is being forced to shift operations to other states such as Idaho and Montana “due to the rising cost of doing business in Oregon.”
“This is really about just trying to be objective about the (economic) landscape in Oregon, versus the options we have to invest elsewhere,” Miller said. “Basically, we’re a commodity business. Margins are lean. The business environment tends to be very competitive.”
Miller — a prominent GOP political donor — said the accumulation of taxes, fees and regulations in Oregon have eroded the competitiveness of the state’s wood products industry.
He called out several policies, including the state’s Clean Fuels Program passed in 2015. Lawmakers are also working to adopt a cap and trade carbon pricing policy that Miller said will raise fuel prices by 22 cents per gallon in just the first year alone. The Legislature, meanwhile, adopted a gross receipts tax on businesses in May that aims to raise $1 billion a year in revenue for public education.
It all adds up to 5% to 7% higher production costs for lumber in Oregon, Miller said. And, because the agriculture and timber industries are price-takers on the global market, that means companies cannot pass along the increased costs to consumers.
“It’s the same set of issues that is facing farming throughout the state,” Miller said. “These are just realities. It’s not a political statement.”
Stimson Lumber operates sawmills in Forest Grove, Tillamook and Clatskanie. The Forest Grove mill opened in 1933, and employed 225 people before cutbacks.
Affected workers will receive severance pay and may be re-positioned within the company, Miller said. Stimson also runs three mills in northern Idaho, and employs about 750 workers total.
Miller said he is not optimistic about the business climate in Oregon changing anytime soon. He blamed urban legislators for setting policies that have a disproportionate impact on manufacturing in rural communities.
“As we look at what are our choices, we look not only at the current environment, but we have to look ahead a number of years,” Miller said. “It’s clear to me that there’s not the political courage in the state to tackle spending that just keeps ratcheting up.”
In April, Georgia-Pacific announced it was closing its sawmill in Coos Bay, eliminating 111 jobs. A spokesman for the Atlanta-based company said the decision was prompted by overall market conditions and unreliable local rail service. Swanson Group also permanently closed its mill in Glendale, Ore., in March, according to an article in the Roseburg News-Review.
Figures from the Oregon Employment Department show the number of jobs in wood products manufacturing declined statewide between 2001 and 2018, from an average of 33,320 to 23,438, though the industry appears to have stabilized from the Great Recession and had added back 4,142 jobs since 2011.