Building pressure: Tolko shutting down for a week

Don Plant 2009-06-04 Kelwona Daily Courier:

Tolko will shut down its Kelowna division next week, putting another 165 employees out of work – at least temporarily. The company announced Wednesday its stud-mill operations will close in Kelowna and Armstrong on Monday for a week. Officials will review the shutdown every week after that. More than 355 Okanagan employees are affected in all. “This announcement does not reflect the performance of our employees, who continue to work safely and productively,” said Jim Baskerville, the company‘s Okanagan manager. Tolko‘s operations are generating about two-thirds of normal capacity. The Kelowna mill has fared better than others because the company brought in more efficient manufacturing equipment prior to the economic downturn, he said. The stud-mill workers in Kelowna join the 22 veneer employees who have been out of work since the plant closed temporarily March 16. Another 64 veneer workers in Lumby and 223 in Armstrong are also without jobs.

Weak demand for wood products and the rapid rise of the Canadian dollar against the American greenback are reasons for the latest closures. “There‘s tremendous reluctance (among North Americans) to buy into a new home and take on new debt,” Baskerville said. The dollar has jumped eight cents in the last month, which has put “huge pressure” on demand for Canadians wood products, said Bruce Gardner, union president of United Steel Workers 1-423 and business agent for Tolko‘s Kelowna division. “We‘re optimistic the mill will resume operations quite quickly. But it shows that when one of the best mills is taking down time, things are getting tougher out there,” he said. The recession has forced other forest companies to close their mills indefinitely. The last time Kelowna‘s stud mill shut was for summer maintenance in 2007.
Canada‘s forest industry has seen three years of poor financial results, Baskerville said. Canfor Corp. announced last week the indefinite closure of three Interior sawmills, laying off 570 workers at mills in the towns of Vavenby, Radium and Prince George. The shutdowns are expected to be completed by June or July and will bring Canfor‘s lumber production down to about 2.5 billion board feet a year, half the company‘s total rated capacity of 4.9 billion board feet.

In Tolko‘s case, the company will re-evaluate the stud-mill closures “on a weekly basis,” said Kelowna‘s site manager Greg Maralia. “We‘ll continue to ship during this period with a skeleton crew,” he said. “There will be no maintenance during the week, other than critical, must-do projects.” Gardner said he‘s optimistic the stud mill will resume operations “quite quickly” and that Tolko will decide by next week whether to reopen Kelowna‘s veneer plant. Meanwhile, Gardner is preparing to exchange contract proposals with the company June 25. The current six-year contract expires June 30.