Welco mill closure brings deep cuts

NAPLES — Josh Thomas is losing a good job.

The 25-year-old married father is among 93 people who will be out of work when Welco Lumber Co. closes by the end of the year.

“It’s gonna be hard because there ain’t much in Bonners anymore and I don’t want to move. I’ve lived here my whole life,” Thomas said. “I’ll probably have to go somewhere out of town (for work).”

The news about the Naples mill, which manufactures cedar fence planks, is expected to give Boundary County the highest unemployment rate in Idaho. The number of residents out of work in September was 13.9 percent or 606 people.

“It could push it close to 20 percent,” said Kathryn Tacke, regional economist for the Idaho Department of Labor in Coeur d’Alene.

Jobs at Welco pay between $10.46 and $25.44 an hour plus benefits, with the average employee making $15.05 an hour, said Peter Stroble, director of sales and marketing for Welco headquarters in Shelton, Wash.

Employees who remain until the mill closes will receive a severance. They will get one week’s pay for every year of employment up to four years or a minimum of $1,000, Stroble said.

“We feel terrible about this,” he said. “That mill is a good mill from a cost point of view. But the economy is so weak right now. It just doesn’t make any sense for us to be operating two mills when we only have demand for production that one mill can supply.”

Welco, whose only remaining mill is in Shelton, Wash., said in a news release the decision to close the Naples facility, in large part, is due to  weak demand for fencing products brought on by the sluggish housing market.

“This isn’t an issue of that mill being incompetent, just an issue of the market not being there,” Stroble said. “The people of the mill are good, loyal hard-working employees.”

He expects the mill to close the third week in December.

Owned by Welco for 17 years, the mill in Naples will not be sold.

“We’re going to keep it in a mothball state for the time being,” Stroble said. “We’re going to retain the right to start it up if we need. I want to stress it is a highly unlikely scenario.”

When Welco closed its Marysville, Wash., mill in 2007, the facility was sold off in pieces, he said.

“One of the things in a commodity industry, you don’t want a competitor to get a hold of your assets,” Stroble said. “A big part of the decision is to take the supply off the market so the remaining assets can perform better.”

Welco’s mill in Shelton employs about 90 people. There will not be an opportunity for employees from Naples to transfer because there are no openings, Stroble said.

Tacke call the news “very disappointing.”

“There’s already been so many blows in the forest products industry,” she said. “Things don’t look very good. It’s very unlikely we’ll probably see U.S. housing starts increasing. They will remain low.”

Laurie Doering, owner of Northwoods bar in Naples, heard the news on Wednesday evening from a Welco employee.

“I just don’t think it can be good,” Doering said about the impact on the community and her business. “A lot of them (employees) that work there are our friends. They come in and frequent our place quite a bit.”

Andrea Callahan, a cashier at Naples General Store, was shocked to hear the news.

“That’s a big part of the jobs around here,” Callahan said. “I know a lot of people who work there. It’s going to put them back a lot.”