Mill decision a step closer

The Warm Springs Forest Products Industries board and management last week presented Tribal Council with three alternatives for the future of the WSFPI mill.

One option is the closure of the sawmill, and the sale of all future tribal timber to mills off the reservation.

The second option would be to downsize the mill from 120 workers to about 80, operating the sawmill at 60 percent of one shift.

The third option is to transform the mill into an efficient operation. This would require stopping the mill operation for two years, while the facilities are being remodeled.

Tribal Council could not make a final decision last week, as there needs to be a clearer financial analysis of the options. The numbers as presented by WSFPI to Council last week seemed to be open to interpretation.

Council asked that the figures be clarified and presented again on Feb. 12. There may be some modification of the three options as well.

“The mill is a trust asset of the membership,” Tribal Council Chairman Austin Greene said. The Council needs accurate information, and all possible options, he said, in order to make the best decision for the tribes.

The WSFPI situation is complicated and long-standing.

Employment is a large part of the equation: Of the 120 employees at the mill, 67 percent are tribal members.

On the other hand, the operation has been losing significant money in recent years. To further complicate the matter, WSFPI carries significant debt, to tribal Credit and the Business Investment Revolving Fund, among others.

The Warm Springs BIA superintendent John Halliday says he cannot sign-off on further timber sales until the Tribal Council is satisfied that the required payments from WSFPI to the tribe will be made.

WSFPI sells high-quality lumber to the buyers in Japan. When the cost of operating the mill is more than the revenue, the effect is a subsidized sale of lumber to the Japanese, Halliday said.

The effect is like sending tribal revenue to the Japanese buyers, Halliday said. “You cannot run a business that way,” he said.

In the plan presented to Council last week, the WSFPI board recommended the down-sizing option, while they develop a plan for the transformation option. Council asked to see a modified version of the transformation option, with the remodel happening sooner rather than after a number of years.