Gov. Tim Pawlenty on Friday announced a host of measures, including extending timber contracts for a year or more, that the state will undertake to alleviate what's been called an industry crisis.
After meeting with 30 to 40 government and forest products officials at the Sawmill Inn in Grand Rapids, Pawlenty described public policy actions to help bring down wood prices and assist 300 people laid off last week at Ainsworth Lumber Co.'s Grand Rapids and Cook oriented strand board plants.
The state must take action, Pawlenty told reporters after the meeting. "You can't just flip the switch on and off," he said. "There are massive amounts of infrastructure."
"I'm really encouraged, and I think for the long term Minnesota is going to have a good forest future," Willie Lindquist, president of Associated Contract Loggers & Truckers, told the news conference.
Present at the meeting were lawmakers, state commissioners, mill officials and loggers.
ADVERTISEMENT
Pawlenty said a significant downturn in the nation's housing industry and high wood prices in Minnesota caused mills to drastically reduce the amount of wood they buy from loggers. Loggers have suffered all summer from lack of markets.
Those events caused a "perfect storm," as Pawlenty called it, that brought about the indefinite closure Sept. 22 of the Grand Rapids and Cook mills as well as the permanent shutdown in August of one line of Ainsworth's Bemidji oriented strand board mill. The Bemidji shutdown put 110 people out of work permanently. An Ainsworth official said the September closings are temporary.
Oriented strand board, or OSB, is often used instead of plywood in home construction.
At the news conference, Pawlenty said the laid-off workers are now eligible for job training, counseling and other services after being declared dislocated workers. "That's Plan B," he said. "Plan A is to get them back to work in the mill."
The governor agreed to extend all timber permits for a year -- and more if necessary, and if approved by the Legislature. That gives loggers more time to cut and sell the timber they have been unable to sell this year.
Future timber bids on state land in some cases will be taken in written form, rather than orally, to see if that method keeps prices down and eliminates what the governor called "hysteria" at auctions. State auctions also will take place frequently than twice a year.
Iron Range Resources will offer low-interest loans, which may help buy down loggers' lines of credit, "so we don't lose any of these businesses," IRR Commissioner Sandy Layman said.
Pawlenty, who is running for re-election in November on the Republican ticket, said he would reconvene his Advisory Task Force on the Competitiveness of Minnesota's Primary Forest Products Industry, originally formed in 2003. The Department of Natural Resources will look into improved timber management to increase the flow of the timber supply and the Legislature will be asked to consider incentives for lowering the cost structure and taxes, he said.
ADVERTISEMENT
Tom McCabe of Duluth, president of the Minnesota Timber Producers Association, said many good ideas came out of the meeting.
His organization presented the governor with a 12-point proposal, much of which became part of Pawlenty's plan.
"We think there will be follow-through," said Wayne Brandt, executive vice president of Minnesota Forest Industries and Minnesota Timber Producers Association.
"Many of the things that need to be done are reasonably well-known," he said. "But sometimes it's hard to get things done until there's a crisis."
JANE BRISSETT can be reached weekdays at (218) 720-4161.
