SELECTIVE THINNING.

Byline: Joe Harwood The Register-Guard

Since completing its $7.8 billion hostile takeover of Portland-based Willamette Industries Inc. 19 months ago, wood products behemoth Weyerhaeuser Co. has shuttered 28 plants across the United States and in Canada, eliminating 2,287 jobs.

Add to the list the approximately 200 workers at Willamette's former Portland headquarters who lost their jobs last year, and more than a quarter of the layoffs - 691, or 27.8 percent - have been in Oregon.

The state thus far leads the country with the most closed Weyerhaeuser/Willamette facilities, despite assurances by Weyerhaeuser before the takeover that Oregon - with more Weyerhaeuser and Willamette facilities than any other state - would not bear the brunt of the layoffs.

Most recently, in August, Weyerhaeuser permanently closed its North Bend corrugated-medium cardboard mill and announced that it would shutter its Trus Joist engineered lumber plant in Junction City by year's end. Weyerhaeuser said it will offer jobs to more than half of the displaced Junction City workers at Trus Joist operations in Eugene and Stayton.

That Federal Way, Wash.-based Weyerhaeuser is closing inefficient and overlapping operations is not a surprise.

The prospect of being able to close duplicative plants or sell assets and thereby boost profits is often a driver for mega-mergers. Aside from shutdowns and mill sales, Weyerhaeuser since last December has sold more than 250,000 acres of timberland in Washington and Oregon.

The closures are helping Weyerhaeuser shave $300 million in annual operating costs, and the sales of land and mill sites aided the company in reducing its $12.7 billion debt load, much of it taken on in order to buy Willamette.

Weyerhaeuser CEO Steve Rogel has made no secret of his desire to consolidate the fragmented wood products industry, which is heavy with excess production. The industry's overcapacity in lumber, panels and paper, coupled with foreign imports, has made it tough for producers to boost prices, and has hurt their profits.

Rogel has said he wants to cut capacity and supply in order to boost profits and make Weyerhaeuser more globally competitive.

In late 2000, when Weyerhaeuser first launched its takeover bid, Willamette officials warned that Weyerhaeuser, if successful in its bid, would cut jobs sharply in Oregon and in other states where both firms had operations. But Weyerhaeuser officials down-played the potential for closures and layoffs. Rogel told The Register-Guard in a November 2000 interview that "there would be very few layoffs" in Oregon.

Weyerhaeuser spokesman Bruce Amundson said that in terms of job losses, Oregon is in line with other states if the 200 Willamette headquarters jobs are taken out. Emphasizing that the pain isn't just hitting Oregon, he noted that Weyerhaeuser announced last October that it would cut 750 jobs over two years at its Washington headquarters as part of the austerity plan.

Rich Hanson, Weyerhaeuser's chief operating officer who headed up the team responsible for integrating the two companies, said the closure of the North Bend plant was more related to the chronic overcapacity of the containerboard industry and shrinking markets than to the Willamette takeover.

Weyerhaeuser last year shuttered similar corrugated-medium mills in Kentucky and North Carolina, laying off a combined 290 workers.

To compete in world wood products markets, Weyerhaeuser must cut costs and become more efficient, Hanson said. In doing so, Weyerhaeuser hopes to become stronger and better able to invest in modern equipment. That will keep jobs here, Hanson said.

"As we continue to do some of the painful stuff, we are also looking to the future as far as capital expenditures," Hansen said of Oregon. "As we get more competitive, we can then think about capital improvements."

But becoming more efficient - doing more with less - is likely to mean more facility closures in Oregon and elsewhere.

The impending closure and sale of the Trus Joist plant in Junction City shows how the company is striving to become more efficient by reducing overlapping operations.

Weyerhaeuser had Trus Joist engineered wood products plants in Eugene, Stayton, Junction City and Hillsboro when it acquired Willamette, which had engineered wood plants in Winston, Albany, Vaughn and Woodburn.

Weyerhaeuser quickly set about consolidating the operations and cutting jobs. It shut the Woodburn and Winston plants in 2002, and the surviving Weyerhaeuser operations picked up the business left by those closures. The company similarly now plans to spread the work done in Junction City to other plants.

The shuffling has been brutal on workers - both those who have lost jobs and those who are hanging on.

"There's not a feeling of much job security like there was a few years ago," said Greg Pallesen, vice president of the Portland-based Association of Western Pulp and Paper Workers. The union represents pulp and paper mill workers in Washington, Oregon, Idaho, California and Arizona.

"The company wants and expects loyal employees, but that loyalty in job security is not returned," Pallesen said.

Weyerhaeuser also has made a series of small cuts at Weyerhaeuser operations throughout the state since the merger. At the end of 2001, the companies had Oregon employment of about 6,300. That number is now down to about 5,100. Weyerhaeuser has 55,000 employees companywide.

NATIONWIDE CUTTING

Non-Oregon facilities shut by Weyerhaeuser since its purchase of Willamette Industries

Alabama: Plywood mill, Millport, 250 jobs eliminated

Arkansas: Plywood mill, Dierks, 90 jobs

British Columbia: Sawmill, Vancouver, no job-cut tally available; lumber mill, Vaneby, 80 jobs

California: Recycling plant, San Jose, 2 jobs

Colorado: Box plant, Denver, 83 jobs

Kentucky: Containerboard machine, Hawesville, 142 jobs

Louisiana: Engineered lumber plant, Simsboro, 66 jobs; engineered panel plant, Lillie, 127 jobs

Maryland: Recycling plant, Haverhill, 2 jobs.

North Carolina: Containerboard machine, Plymouth, 146 jobs

Oklahoma: Recycling plant, Oklahoma City, 12 jobs; packaging plant, Tulsa, 25

Ontario: Sawmill, Dryden, 110 jobs; containerboard machine, Sturgeon Falls, 140 jobs

Pennsylvania: Paper machine, Johnsonburg, 90 jobs

Saskatchewan: Engineered panel plant, Hudson Bay, job cut not available

Tennessee: Box plant, Nashville, 104 jobs

Texas: Packaging plant, Laredo, 18 jobs

Virginia: Packaging plant, Richmond, 31 jobs

Washington: Lumber mill, Enumclaw, 150 jobs; lumber finishing plant, Snoqualmie, 110

Wisconsin: Paper machine, Rothschild, 75 jobs

CAPTION(S):

Bob Durnett loads veneer at the Trus Joist plant in Eugene, which will absorb workers and equipment from the Junction City plant when it closes. Stephanie Barrow / The Register-Guard