Eureka lumber mill closing

After years of battling the U.S. Forest Service, environmental groups and fierce international competition, Jim Hurst announced Thursday that Eureka's Owens & Hurst Lumber Co. will permanently close in May.

"For our company, the hill has become too steep to climb and the path continues to be littered with obstacles," Hurst said in a statement released to media. "Pure and simple, the anemic Forest Service timber sale program is the overriding factor in our decision to close."

Hurst told employees Wednesday of his decision "to fold up the tent."

Hurst said the mill's 90 employees "could see the handwriting on the wall. They just thought we could hold out for a bit longer, maybe two or three years."

Others in the community were caught off-guard by the announcement.

"Needless to say, we're stunned," Lincoln County Commissioner Rita Windom said. "It will have a significant impact on Lincoln County, and I'm just heartsick, because we just went through this two years ago with the Stimson mill."

The Stimson plywood plant in Libby closed at the end of 2002, putting 200 people out of work. When Owens & Hurst closes, just two small wood-products facilities will remain in Lincoln County, considered Montana's timber basket for the last century.

The Owens & Hurst sawmill - Eureka's largest employer - generated a gross payroll of $3.6 million last year. But that number doesn't adequately reflect the mill's significance to the community, said Marianne Roose, the county commissioner who represents the north end of Lincoln County.

"It's not only the 90 families that are employed there, but what it means to the community as a whole," she said. Owens & Hurst sponsored a collegiate scholarship at the local high school, it purchased 4-H animals at the county fair, it provided summer jobs that allowed college students to return home and it sponsored countless community events and causes.

"It's a very gloomy day in Eureka, Montana, today," Roose said.

Hurst said the mill's equipment will be auctioned off after the May closure and a subsidiary operation will continue planing rough lumber through the summer. That operation, formerly called Lone Pine, will close as well, he said.

Hurst said the mill has been financially sound recently, but the outlook for improved timber availability from the Kootenai National Forest is "dismal." The mill has relied heavily on importing burned timber from Canada in recent years, but that source of wood is now drying up, he added.

Hurst said the mill currently has enough Forest Service timber under contract to operate the mill until next winter, but he would prefer to avoid layoffs at Christmas, leaving workers unemployed throughout the winter.

"I can offer my people more severance now than I could at any time in the last few years," he said. "This way, we can kind of go out on our own terms, kind of, rather than waiting until the last log is run through the sawmill."

Although competition from Canada and other lumber importers has taken a toll on business, Hurst contends that scarce timber sales on the Kootenai National Forest have impeded his ability to compete.

He said the U.S. Forest Service is "dysfunctional and leaderless," responding mostly to the threat of lawsuits from environmental groups rather than the needs of rural communities that have historically relied on national forest lands.

"It used to be a good thing to be surrounded by national forest," he said. "But not anymore."

Eureka is indeed surrounded by national forest lands, and that has over time contributed to the mill's timber supply problems.

"The mills that are going to survive are those that are surrounded by private forests," he said. "They can dart in and pick up a Forest Service sale every now and then."

When the mill started operating just over 20 years ago, the Kootenai was offering annual timber sales totaling close to 200 million board feet. In recent years, the volume offered has fallen below 60 million board feet, Hurst said, and most of that timber has been lower-quality dead wood.

But the main problem has been a lack of predictability in the available timber supply on the Kootenai Forest in recent years, he said.

Kootenai National Forest Supervisor Bob Castaneda acknowledged the problem.

"They are entirely right. The ideal situation is for us to be able to provide a steady amount of timber," he said. "We can do our part on that, but if [timber sales are] held up by litigation, then it's out of our control and it's in the courts' hands."

Just two years ago, the bulk of the Kootenai timber program - and most of the Eureka mill's contracted sales - were stopped by litigation from the Missoula-based Ecology Center and the Lands Council of Spokane. Hurst and other community leaders organized a bus trip to Missoula and personally appealed for the Ecology Center leadership to back off on the litigation. The group did not, and last year, a federal judge ruled that the timber sales could proceed.

The center's executive director, Jeff Juel, said Thursday the Owens & Hurst closure stems from overzealous logging policies advanced by the Forest Service years ago. Logging was so intense that the need for timberland to get a long rest, by reducing federal timber sales, became unavoidable, Juel said.

"If we want to preserve old-growth forests … and wildlife habitat, the slowdown in logging on federal lands is inevitable," he said.

Castaneda said his staff has worked closely with Hurst and other mills to come up with ways to improve harvests.

"I'm real sorry that they had to make a decision to close the mill," he said. "I think the mill has been a real asset to that community, not only from a job standpoint, but also in being able to process wood that comes off the forest."

The steady disappearance of wood-processing facilities and a skilled work force to support those facilities "can really hamper our ability to complete some of our fuel reduction projects and some of our forest management projects," Castaneda said.

Recently, Idaho mills have been purchasing most of the timber sales offered on the Kootenai Forest, Castaneda said.

The Eureka mill's closure will lead to further economic exports, with severe consequences to the local tax base, the county commissioners said.

"For larger timber, it's going to go somewhere else," Windom said. "It's going to be hauled out of here and it's not going to be part of our economy. When that mill is auctioned off and that equipment goes somewhere else, that's a big hit to our tax base."

Two years ago, Eureka voters approved an $8 million bond issue to build a new high school that was opened last fall.

Roose is concerned that a loss of homeowners and students will translate to a steeper burden on remaining taxpayers.

"If we lose a lot of families that are paying taxes plus we lose a lot of students, that will have a tremendous impact on other taxpayers," Roose said.

The Owens & Hurst mill has survived tough times in recent years, but not anymore, said Hurst, who has been a fiery advocate for timber-dependent communities, organizing the "Great Northwest Log Haul," an effort in 1988 to help a struggling mill in Darby.

In 2001, there was a similar log haul focused on saving the Owens & Hurst mill at a time when it was faced with a severe log shortage.

More than 4,000 people turned out for the 201 event from across the region, many of them hauling logs in pickup trucks or wagons or even strapped to the tops of cars.

"It's a gesture so kind and overwhelming that I'm not able to express my gratitude," Hurst said at the time.

Hurst on Thursday said he will probably maintain his interest in helping rural communities once the Eureka mill closes.

"I don't think the obstructionists have seen the last of me," he said. "The working people in rural areas don't have that many advocates as far as I can see, so I'll help in that way anyway I can. I am not leaving Eureka, though."

The Associated Press contributed to this report

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

Montana lumber mill closures since 1990

1990 Champion International, Missoula

1990 F.H. Stoltze, Dillon

1991 Flathead Lumber, Polson

1991 WTD Forest Industries, Columbia Falls

1993 Champion International, Libby

1994 Crown Pacific, Superior

1994 Darby Lumber, Darby

1994 Tricon Lumber, Drummond

1996 White Pine Sash, Missoula

1996 Crown Pacific, Thompson Falls

1996 Louisiana Pacific, Libby

1997 Idaho Pole, Bozeman

1997 Border Lumber, Rexford

1997 JD Lumber, Judith Gap

1997 Timberline Lumber, Kalispell

1998 Stoltze Lumber, Darby

2000 American Timber, Olney

2002 Stimson Lumber Co., Libby

2003 Trout Creek Lumber Co., Thompson Falls

2005 Owens & Hurst Lumber Co., Eureka