OREGON (From news reports) -- The Swanson Group is laying off 300 workers from its plywood mill in Glendale and cutting the pay of those still working due to a shortage of orders, as businesses grind to a halt during the COVID-19 pandemic.
The layoffs will be indefinite, said Steve Swanson, president and CEO of the Swanson Group. The mill has been shutting down operations gradually over the last few weeks and laying off workers accordingly, as well as some administrative staff, he said.
The plant was producing plywood yet had no buyers for it, and had built up a severe over-supply, Swanson said.
"We simply cannot afford to store that much plywood," he said. "We made the difficult decision to go dark on that facility on a week-by-week basis."
Swanson Group also runs a mill in Roseburg and a facility in Springfield. The Roseburg mill, which has about 150 employees, has cut production back by about 20%, Swanson said. The Springfield facility has about 250 employees and it is likely there will be some layoffs there, he said.
In a letter sent out to employees March 25, Swanson said the company is in "unchartered territory" due to events surrounding the COVID-19 pandemic. Business was strong in February and early March, Swanson wrote, but then "circumstances outside of our control changed the markets quickly."
"As Americans watched the current pandemic spread from China to Europe and then into the United States the country has made many changes to stop the spread of the coronavirus," Swanson wrote. "As a result, many businesses including our customers are waiting to see what the next several weeks will bring. We have seen a dramatic decline in our order file."
In addition to the layoffs, employees who remain working will take a 10% pay cut beginning April 16, he said. "This is an indefinite curtailment because we just don't know how long the markets will be stagnant," Swanson said in the letter.
On Tuesday, Swanson said he worries about the possible long-term economic effects of the pandemic, and the measures taken to stop its spread.
"The cure could end up being worse than the disease," he said. "If we get thrown into a multi-year depression it's going to be catastrophic for us. This is a serous pandemic, but the economic disaster we're facing is real, it's every bit as real as the virus."
Matt Hill, executive director of the Douglas Timber Operators, said these are difficult times for the forest products industry, with no immediate end in sight.
"In terms of the broader COVID-19 impact on the forest products economy, we can expect to see additional tightening as long the American economy is effectively placed on hold," Hill said. "This is a demand side problem and it is rippling through the supply chain: first with the mills, then loggers and truckers and so on.
"The federal CARES Act provides some relief for employers but not all of that is available to Oregon mills. Some programs, like the Paycheck Protection Program, are only available to businesses with fewer than 500 employees. That will help some but not all of our mills."
Hill said other plants across the state are experiencing similar cutbacks. They include:
Seneca Sawmill Co., which employs 470 in Eugene and Noti, which is cutting hours at its three mills in Eugene and closing down its log yard. The company is trying to get employees 30 hours a week, Hill said, but in some cases that means bringing crews in to power wash and paint, not process logs. It has handed out bags of groceries to employees and is paying all health care premiums for April and May.Timber Products Co. in Medford, which confirmed last week that it has temporarily shut down a facility in Medford after an employee tested positive for COVID-19. Company officials say they have down their mill in Medford while the facility is deep cleaned. They plan to re-open the mill sometime next week.
This has been a tough year for the Swanson Group. Last March, Swanson Group announced the permanent closure of its sawmill in Glendale due to a lack of timber supply.
Despite that, Steve Swanson said he remains optimistic about the fate of the company and that of the workers who are temporarily getting laid off.
"The minute this thing breaks I believe we're going to have a robust market," he said. "We expect to bring every one of them back if and when we come out of this thing. We're doing all we can do."