The Ainsworth-owned Cook wood products plant likely will remain closed most if not all of 2009, some local officials learned during a Tuesday meeting in Vancouver, Canada with company officials.
The news came a week after an announcement by Ainsworth officials that they were permanently closing the company's Grand Rapids mill, after being temporarily closed for nearly two years. It employed 190 people.
Both OSB plants make oriented strand board from wood chips. The product is used to build exterior house walls.
The Cook plant initially closed temporarily in September of 2006, laying off 150 people.
It opened for stretches since then, but last shut its doors on Jan. 16.
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"They're in a cash preservation mode right now, trying to weather this economic downturn in housing," said State Rep. David Dill, DFL-Cook.
Even though Ainsworth officials told Dill, St. Louis County Commissioner Bill Kron and Iron Range Resources Deputy Commissioner Brian Hiti that they anticipate the market could rebound slightly about three months in the spring and summer of 2009, they're not certain they'll reopen the plant.
The trip followed a call by Gov. Tim Pawlenty to Ainsworth officials, where he stressed how critical the plants are to northern Minnesota especially, Hiti said.
Hiti was told by Ainsworth officials that they'd likely buy only a fraction of the amount of wood they typically would buy in the Cook area.
For Ainsworth, any wood they purchase this winter is a gamble, since there's no guarantee the market will rebound by summer. But the company can't wait to see if demand returns before buying wood, because loggers can only work during the winter, when the ground is frozen.Calls to Robert Allen, CEO of Ainsworth, who attended the meeting, weren't returned Wednesday.
While the demand has plummeted, transportation and energy cost have soared, making the situation worse, Dill said.
Transportation is one of the reasons Ainworth's Bemidji plant, with 150 employees, has remained in operation. Two rail lines are connected with it. And unlike the other plants, it is able to burn some of its waste wood as fuel, saving some money.
The news was disappointing, but not surprising, for Dave Chura, executive director of the Minnesota Logger Education Program, which provides state-required ongoing logging education programs.
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"I think everybody is bearing down for the worst, and anticipating 2010 is the soonest things will turn," Chura said.
PATRICK GARMOE can be reached at (218) 723-5229 or pgarmoe@duluthnews.com
