Mill closing cuts to the heart of Republic

By Bradley Meacham
Seattle Times business reporter

Friday, February 07, 2003 - 12:00 a.m. Pacific

REPUBLIC, Ferry County - The sawmill that's sustained this town for 61 years
is closing today, and everyone on Main Street is looking for answers.

The mill has been hurt by the timber dispute between the United States and
Canada, which has depressed lumber prices.

But many in this town in Northwest Washington say environmental restrictions
on felling trees from nearby federal land are the real culprit.

Whatever the reason, the mill's owner, Vaagen Brothers, says it can't
survive losses that totaled nearly $2 million last year.

In a body blow to this rural community, it's cutting 61 jobs today and will
likely trim the remaining 26 workers in a few weeks after operations wind
down, said plant manager John Newman.
Tension is high because the sawmill has some of the last family-wage jobs in
Ferry County, an area slightly larger than King County with a population of
about 7,300. Unemployment runs about 14 percent.

A bumper sticker in one shop lays out the choice: "Hug a logger - you'll
never go back to trees."

The sawmill must truck in logs from far away, driving up costs, because
environmental regulations have limited logging on nearby land, including the
Colville National Forest.

The mill once got 80 percent of its raw material from federal lands, but
recently the federal supply dwindled to the equivalent of only five days
each year, Newman said.
Drawing ire is the Kettle Range Conservation Group, an 800-member group that
has challenged proposed timber sales to prevent logging.

"They want to lock everything up," Newman said. "They're blocking
everything."

To find a way to keep the mill alive, U.S. Rep. George Nethercutt,
R-Spokane, hosted a town meeting last month with Mark Rey, U.S.
undersecretary of agriculture.

A former sawmill-industry lobbyist, Rey is point man for the Bush
administration's plans to loosen cutting restrictions.

Most of Republic turned out, filling the high school gym to plead for relief
from the restrictions.

"Our real problem is politics here," said Darlene Glidden, an owner of the
Klondike Motel, two blocks up the road. "Extremist environmentalists want
everything."

Tim Coleman, executive director of the Kettle Range group, insists he isn't
trying to close down the town.

Sitting in an office decorated with forest maps and a poster from
demonstrations against the 1999 World Trade Organization meetings in
Seattle, he rejects the criticism as a ploy by the mill to cut costs.

"We're working to make sure they have their logs and the forest stays
healthy, too," Coleman said, sighing with frustration at the blame his
group's received. "We want to protect jobs and the forest. Meanwhile,
they're dragging us through the dirt."

Several stores in town were threatened with boycott last month when they
appeared on a list of donors to the environmental group's scholarship fund
that was circulated.

Richard Eich, a logger who runs a store across the street from the group's
offices, told Coleman members of his group aren't welcome in the store.
Glidden and others said they still won't shop in the store operated by the
environmental group.

But apart from the environmental rules, a big part of Republic's problem is
the U.S.-Canada trade dispute.

Since the Bush administration imposed a tariff last year on Canadian lumber,
mills in inland British Columbia have cranked up production to maintain
revenues, creating a wood glut and depressing prices in the United States.

Seattle's Plum Creek Timber said its prices fell more than 10 percent in the
last three months of 2002. Low lumber prices make some trees too valuable to
cut, said Chief Executive Rick Holley.

Since the Republic mill produces smaller orders and has saws designed for
big logs, Newton insists it could survive with a steady supply of logs. It
competes directly with Canadian mills on only about half its products.

Meanwhile, townspeople say federal lands remain the only hope for their
mill. "As a small community, there's nothing we can do about Canada," Eich
said.

Bradley Meacham: 206-515-5066 or bmeacham@seattletimes.com