Eel River Sawmills gives 60 days until jobs end
February 01, 2001
By John Driscoll
The Times-Standard
Eel River Sawmills Inc. has given its 375 employees two months notice that their jobs will end as part of the expected sales of assets to the Pacific Lumber Co. and another local buyer.
Sometime between March 31 and April 13, Mill A north of Rio Dell and Mill C off U.S. Highway 36, and the Fairhaven Power Co., will no longer be run under the Eel River Sawmills name, the company informed its employees Tuesday.
Some Eel River employees, in expressing concerns over the uncertainty of their jobs, said the company has kept them in the dark.
"We had no inkling of what was going to happen to our jobs," said Clifford Crowl, a 32-year employee.
Crowl, along with many other longtime employees, owns shares of the company as part of a stock ownership plan.
Employees at the company's other two mills, mills B and D in Redcrest -- which are being negotiated for sale with an anonymous local outfit calling itself Englewood Lumber Co. -- were given the same notice two weeks ago, said Eel River Sawmills President Dennis Scott.
"It's a pretty harsh notification," Scott said.
Both sales are expected to be finalized at the end of March.
Terminated employees would have to apply for jobs with the new owners, provided the acquisitions go through.
But it they don't, Scott said, "I could still see us continuing to run the operation."
In that case the notice would be rescinded, Scott said.
Lumber sales at Eel River plummeted 50 percent last year, dropping from $41 million in fiscal year 1999 to about $20 million in fiscal year 2000. Supply of logs from its own timberland were negligible, and prices for imported log prices have been burdensome, the company has reported.
The latest action is intended to protect the company from liability in the event that new owners close or curtail operations at the mills, Scott said.
PL would not say what jobs may be retained following a purchase, though the larger company has designs on Eel River Sawmills' small-diameter Douglas fir mill that would enable PL to mill its small logs instead of sell them.
"Everything's still very positive (for a deal to go through)," said Scott, who had met with PL President and CEO John Campbell Wednesday.
How many, if any, Eel River employees PL would hire won't be known until after the deal is made, said PL spokeswoman Mary Bullwinkel.
Last week Pacific Lumber announced a week-long closure of one of its own mills, citing log supply problems and low lumber prices that have plagued the Northwest recently.
Englewood Lumber, Scott said, is interested in some 11,000 acres of young, well-stocked timberland off U.S. Highway 299 in Humboldt County. PL is proposing to buy 9,000 acres, and Eel River hopes to sell its remaining 5,000 acres in several deals.
Eel River employees will get the chance to vote on the transactions, but the stock ownership plan at present only owns between 25 and 30 percent of the company. Founder Mel McLean's trust owns the controlling interest in the company.
Crowl believed that the employees owned 46 percent of the company, and should have been granted another five percent upon McLean's death in 1999.
"It now appears that for a number of years we were lacking information on the ownership," Crowl said.
Scott explained to the Times-Standard Wednesday that the employees' shares were purchased with a loan, and ownership was allocated as the loan was paid down. To date, the loan has not been paid off, he said, so employees own less than the full 46 percent.
How employees will be paid off as a result of the sales, "Depends on how it's hashed out," Scott said.
Fairhaven Power employees vested in the plan said that they were told two weeks ago that they may be paid off over as long as 17 years, an announcement that was met with disappointment. The power company is probably the company's most valuable asset, especially during today's suffering lumber market, though Pacific Gas and Electric Co. has recently sent out notices that only partial payment can be expected for power produced in December.