Owens & Hurst buyout?

Possible sale of Eureka mill in the works as Owens & Hurst Lumber Co. employees ponder their choices for the future, potential is developing for the Eureka mill to be sold to an out-of-state company that is interested in importing and processing hardwoods.

As Owens & Hurst Lumber Co. employees ponder their choices for the future, potential is developing for the Eureka mill to be sold to an out-of-state company that is interested in importing and processing hardwoods.

Jim Hurst, the co-owner and manager of the mill, confirmed Monday he is negotiating a possible sale with a company based in an Eastern state. Without a sale, the Owens & Hurst sawmill is scheduled to close May 31, its planer operation will close around the end of August, and an auction for all mill equipment will be held soon after, Hurst said.

Hurst would not speculate what chances a buyout might have.

"Long ago, I quit predicting the lumber market and with all the factors involved with a sale or no sale; I'm staying noncommittal at this point," he said. "But it would be good for the community."

In negotiations so far, Hurst said he has been "brutally honest about the nature of the wood products business in the state of Montana" because he doesn't want the potential purchaser, or local workers, to go headlong into an operation that could "go sour."

That's one reason why Hurst worries that the Owens & Hurst Mill will close and go out of business eventually, even if there is a sale. Hurst wants his employees to have the full range of government retraining and relocation benefits that will come with the closure, even if they plan to hire on with a company that purchases the mill.

"There will be a break in service. I am going to terminate all employees so if indeed there is a buyout, some employees can go their own way with those programs at their disposal," he said. "Or they can stay. Most people I talk to want to stay here. I think some of them want to be retrained and start a business here."

Gov. Brian Schweitzer said Monday that his administration is fully engaged in efforts to make the transaction happen.

The administration has been working on loan and grant packages that would be aimed at re-tooling the Owens & Hurst mill and retraining workers so the operation can process hardwoods.

Schweitzer said the company already ships hardwoods cross-country to the West Coast, with some of the raw materials being exported to the Pacific Rim. The company is interested in a value-added operation along that route, he said.

Importing wood to Montana would be a key element for the buyer's potential success, Hurst said.

"We're always exporting something from this state," he said. "Here you would be importing a raw material and doing something with it to export it out of state. That would be pretty novel for Montana."

The decision to close the Owens & Hurst mill came about largely because Hurst no longer had confidence in a reliable timber supply coming off the Kootenai National Forest, which comprises most of the land surrounding Eureka. The forest's available timber sales have dropped steadily over the last 15 years. And recently, lawsuits filed by environmental groups have effectively tied up most of the forest's timber program.

Hurst believes the litigation will continue.

"The environmentalists or obstructionists or whatever you want to call them really aren't letting up," he said. "I just don't need to subject myself or my crew to any more of that."

Hurst said he has mainly been focused on giving employees good choices for the future.

Those options were discussed at the company's annual meeting last week, and on Monday and Friday of this week, state officials were talking to mill employees to discuss retraining and relocation benefits.

Hurst said mill workers will also benefit from a "fairly sizable profit-sharing plan and severance package," and there have been multiple inquiries from manufacturing operations in other states offering employment opportunities to the Eureka workers.

"My employees probably have the maximum amount of options available to them," he said.

"I absolutely hate holding my hand out to the federal government," Hurst said. "But in this case I think the federal government is responsible for the demise of jobs in northern Lincoln County, so therefore I think they have an obligation to take care of them."

Hurst said he does not anticipate a long, drawn-out negotiations over a potential mill buyout. There will be a meeting in the next month that will probably determine whether it can happen or not, he said.

Reporter Jim Mann may be reached at 758-4407 or by e-mail at jmann@dailyinterlake.com