Well this is the bloody end. Smurfit-Stone in Frenchtown is shutting down.
Smurfit-Stone Container Corp. announced on Monday the permanent closure of its linerboard plant in Frenchtown, effective Dec. 31. (Frenchtown is about 15 miles west of Missoula.)
The news came as a shock to the mill’s 417 workers – all of whom will lose their jobs – and to Missoula community leaders who have been working to keep the mill going despite a tumultuous wood products market and the worldwide recession.
“With all the effort our union and our workers put out to keep this mill going, it’s a crying shame that we were unsuccessful,” said Bob Johnson, a millwright at the Frenchtown plant for the past 30 years and the steelworker’s president-elect union leader. “It’s a sad state of affairs that over 50 years has come to an end out there.”
When I first came here there was Intermountain, Van Evans, White Pine, US Plywood, some mill where Southgate Mall is now (Darby Lumber?), and Hoerner-Waldorf, which changed ownership and became Stone. I always lived within earshot of one mill whistle or other. Between the mills, the railroads, and the US Forest Service, Missoula was one rip-roaring 7×24x365 town. Missoula slowly developed a new economy, but it is a shell of what it once was.
This closure is going to ripple across the economy like nothing we have seen here before, affecting the mill workers, the school district, the truckers, loggers, security guards, and local businesses. So that leaves what, Roseburg? (That is still there, isn’t it?) Many were afraid this was going to happen back in the 1980s, yet somehow the mill hung on and adapted. Missoula may be more resilient now than it was then, but my guess is the the new tourism-retail-nonprofit jobs do not pay as well.
I blame no one in particular.
on Dec 15th, 2009 at 8:57 am
Very wise, that last sentence. It is many factors, and we must adapt.
on Dec 15th, 2009 at 7:49 pm
Carol:
You know you have made a mistake when Mark Troll praises you.
Environmentalism + Statism + Unionism = Death of Smurfit-Stone Container Corp.
on Dec 16th, 2009 at 12:22 am
Mark T: Exactly. The demise of American manufacturing, the remote nature of Missoula from the relevant markets, the rise of China and micro wages, the wholesale liquidation of vast tracts of cheap virgin Russian timber, the elimination of living wage jobs, the irrational Federal prohibition on domestic Hemp (NOT POT) production in the United States, the unreasonable expectation of employers to provide for inferior and expensive health insurance, hemorrhaging borrowed money in two full-blown wars with no end in sight, financing the Palestinian genocide, the complete corruption of our Corporate owned and controlled government, the downward spiral of civilization as we know it. …It is a complex equation, and our Corporate Overlords have done a great job of using propaganda to keep us bickering amongst ourselves while they loot what’s left by borrowing from China and sticking the bill to my great grandkids. Read the comments in the Missoulian regarding this story. Pretty sad.
on Dec 16th, 2009 at 6:20 am
Sorry I missed my big chance Max. But Stone managed to exist a generation beyond the point where unions, enviros and govt should have taken it down. So it’s hard to blame anything in particular at this point, except to blame just Everything of course.
on Dec 16th, 2009 at 7:47 am
Whatever the reasons, it’s very depressing and those 400 plus primary industry jobs will translate into another five or six hundred lost county and state wide. With this kind of closing, there just aren’t the same kind of jobs available. Once these industrial facilities are closed and shuttered, they’re usually gone forever.
People who have spent most of their working years at the mill suddenly find themselves with very few options. The “federal retraining” isn’t much, or at least wasn’t when I went through it. Can they last long enough for two years at the College of Technology? With depressed real estate prices, can they sell and go elsewhere? I don’t think there’s really “elsewhere” to for many of these employees.
One in four manufacturing jobs in Montana is related to the forest products industry. If this is a “sign of the times”, then the times are going to get very rough around the state.
I’ll expect the Governor to show up and bluster a bit, but is there anything real the state could do? Open up some logging on nearby state land, for example? I hope they’re at least meeting on it.
Took me a long time to get over it, and I know people who are still very bitter.
on Dec 16th, 2009 at 11:20 am
I know you tend toward being a fatalistic Catholic, but surely you cannot believe that “Everything” caused the demise of Smurfit-Stone Container Corp. That is like saying the world conspired against it.
The anti-resource extraction trend in Montana regulatory and tax law has been obvious for years. Couple that with burdensome union rules and inflexible wage rates and you have a recipe for bankruptcy even in good economic times. And if the targeted industry still manages to somehow struggle on, bring in the environmentalists with their outside money to destroy the company’s finances in court.
It is amazing to me that the working people of Montana have allowed this situation to develop.
Oro y Plata!
on Dec 16th, 2009 at 1:10 pm
Yes there’s all that, making cost of doing business high, but I tend to think more of the whiplash economy. There was such a huge runup in consumer spending the last 10 years, with plenty of it based on HELOC money, that enabled people to buy lots of stuff that required boxes.
Then there is the price of work comp, but we have a lot of work related accidents here too. Before that Stone was shaky..unions? Well they busted mine but that didn’t make things any better. It was just a race to the bottom. BTW Stone contracts out some services like security to private nonunion firms.
Years ago there was an orgy of clearcutting permitted by the USFS, with a sudden reduction when they realized their stupid forest plan models were wrong. That threw wood products into freefall in the 80s. And I heard the air was pretty rotten before Hoerner submitted to air quality controls. I’m not sure I want to go back to that.
There are so many factors at work here I just don’t think you can single any one cause or one person out in the recent past.
on Dec 16th, 2009 at 1:50 pm
Carol:
It all comes down to the cost of doing business. Normally, a business can control its costs in order to make a profit and continue operations. When it cannot control its costs, it goes broke. That is the standard punishment administered by the market.
However, industries targeted by laws and regulations enacted by local, state, or federal governments suffer under costs they cannot control and sometimes cannot predict. These non-market costs, so to speak, can often be passed on to consumers farther along the consumption chain. But there is a limit to that. At some point, the company’s products will be too highly priced to effectively compete with other companies that are not subjected to government-imposed costs. This happens often in international markets where the regulatory and taxation field is level for all players.
In an economic slump, all companies scramble to reduce their costs. Some cannot reduce their costs quickly enough, and they hit the wall sooner than other companies. But the company laboring under onerous government regulations and taxes always hits the wall first.
Clean air is nice, but it has a cost. And while virgin forest vistas may give pleasure to some people, they put other people out of work.
on Dec 16th, 2009 at 1:52 pm
Errata: Where the regulatory and taxation field is NOT level for all players.
on Dec 16th, 2009 at 3:47 pm
Of course no mention of (local, state and federal subsidies)government benefits. Generational handouts. Stone was the Taj Mahal of Montana’s welfare-forest state. The unsustainable mining of raw material (private and public forests) was heavily subsidized. Public health and environmental costs were socialized, as were the fuels and haul routes (rail and truck) that moved materials and finished goods. As always, profits were privatized, costs socialized. Because it’s big, and corporate, this equation has two (unequal) sides.
on Dec 16th, 2009 at 4:17 pm
Of course, no mention that the local, state, and federal subsidies poured right through the company and out into Missoula, making everyone happier, healthier, and richer.
on Dec 16th, 2009 at 5:05 pm
Subsidize the drinking of the bums hanging out downtown, but not working Montanans. Got it.
on Dec 16th, 2009 at 5:38 pm
Ah, Sen. Dork (D-Mont.) is to blame.
on Dec 16th, 2009 at 5:48 pm
Max, that sounds like an argument for a new federal stimulus
on Dec 16th, 2009 at 6:45 pm
Boneshackler: You picked the wrong blog to try to describe complex relationships. These people like it easy and sweet …e.g. “Sen. Dork (D-Mont) above.
If it is too complicated, you’ll find them avodiing you, as they did.
on Dec 16th, 2009 at 7:08 pm
Well excuse my lèse-majesté.
I hate that all these credits and incentives are necessary to keep businesses going (or get “green” industries off the ground). Yet it’s the way of the world now. These stupid klugey gimmicks permeate the tax system.
But yes it was impolitic of Baucus to lead the charge to do away with this one.
on Dec 16th, 2009 at 7:53 pm
You picked the wrong blog to try to describe complex relationships.
Of course, “complex” and sophisticated is calling Sarah Palin the “town pump”.
on Dec 16th, 2009 at 9:27 pm
If the hose fits, fill your tank.
on Dec 16th, 2009 at 9:37 pm
Hey Carol - I don’t like Baucus. He’s a schmuck. He doesn’t have any good intentions. He only knows politics.
But you really have a reduced the issue beyond the limits of simplicity. If there was demand, tax credits or none, there would be a thriving business there.
Why is there no demand? One, it’s a bubble economy we live in, and we are currently bust and headed for another. Not much building going on.
Two, globalization means that we will go after the cheapest and most abundant resources first, hence Boneshackler’s reference to “cheap, virgin Russian forests”. Eventually, after everything else is used up, we will come after the marginal forests of NW Montana.
Hey - you wanted this. It’s called “free trade”, where we don’t take care of our own first. Live with it. Praise Caesar, lèse-majesté. You constructed this false god. Now wait for it to perform miracles for you.
on Dec 16th, 2009 at 10:32 pm
Peak Wood Is Coming!
Only an idiot would believe future generations will be living in wooden houses. Must be the same idiot who was going on about Peak Oil last year.
on Dec 16th, 2009 at 10:47 pm
Ah, geez Max -you used to be so pretentious here, having your own company, an advanced degree. Has your blog persona been hammered by the recession?
on Dec 16th, 2009 at 10:55 pm
Doug:
I am a realist when it comes to economics. Government money now accounts for almost a third of all money spent in our economy. Local and state government spending equals about 12 percent, and federal government spending equals about 16 percent.
Government spending creates gross misallocations of human and natural resources. It is so wrong and so destructive, I am at a loss to explain why a society would allow it. But government spending exists, and, unfortunately, it continues to grow like a cancer, devouring its host more and more, year after year.
Keeping a paper mill alive with government money is no different from keeping a military base alive in my estimation. It is strictly a political decision and not an economic decision.
You need to talk with Senator Dork (D-Mont) about this.
on Dec 16th, 2009 at 11:18 pm
[Feeding Mark Troll here.]
I still have my advanced degree; my blog persona is still intact; and business is going great guns. (That is a pun, but you would not understand it unless you knew something about the courier business and transporting bearer bonds.)
My net worth is increasing at about 15 percent a year. The only financial problem I am having at the moment, besides 0.15 percent on the 6-month T-Bill, is figuring out whom I am going to leave my money to.
Just to get rid of some idle cash, I tried to buy my son and his wife a house last summer, but he is so well off at age 28, he told me no thanks. I bet your defective offspring would never say that.
In desperation, I offered a complete stranger $30,000 per year to pay for attending a good university. This was a young man who worked at a convenience store and mentioned to me that he hoped to be a manager some day, but that he needed a college education. He was so shocked, he just laughed. I left him my card, but he never called. Maybe he thought I was an old homo or something.
on Dec 16th, 2009 at 11:30 pm
PS: I gave a $50 bill to the UPS man tonight as a Christmas present. Every little bit adds up.
on Dec 16th, 2009 at 11:51 pm
That’s more like it!
on Dec 17th, 2009 at 6:36 am
Sorry I omitted the /sarc tag, Mark. You’re more dense than I realized.
on Dec 17th, 2009 at 8:03 am
You’re going to have to work on your sarcasm skills. That was Lind of lame, if indeed that is what it was.
on Dec 17th, 2009 at 9:00 am
Read what I have written. Obviously I don’t subscribe to a singular cause of the shutdown, but it was a chance to crosslink to some interesting new info (new to me anyway).
And you chastise me over deserved comments about Baucus, when you have said such incorrect and inappropriate things about Sarah Palin?
on Dec 17th, 2009 at 10:37 am
I did ask that you accept the manna handed you by your free trade god and eat it now. It’s your only nourishment.
And I don’t care about Baucus! He’s a slut who uses his rod on his staff! He has no character, he’s petty and vindictive, he’s dull and surrounds himself with toadies. Why would I care what you said about him? I was just observing that you sort of, you know, like, did a whoosh on what happened with this company.
I can see through Palin - it’s so easy! You’re investing in her, projecting things on her, and now defending her as if she were some sort of Madonna on a rock. She’s a player, she knows how to get what she wants. If you don’t think sex is a part of it, then I suggest you get thee to a nunnery.
on Dec 17th, 2009 at 10:42 am
I should finish that thought - if she were not attractive, she would be in Wasilla checking groceries. She has not other apparent qualifications for office.
That’s how I know.
on Dec 17th, 2009 at 11:18 am
You are a wobbling along the edge of incoherency as usual. Add any more literary flourishes to your babble and you will go over.
on Dec 17th, 2009 at 11:23 am
[I omitted the hyphen, above. That should be “a-wobbling,” as in, “a-wobbling Mark doth go.” Just a literary flourish, you know.]
on Dec 17th, 2009 at 11:57 am
Mark, you attribute sentiments to me that I have not expressed, not projection so much as what, transference, from her fan base to me? I dunno, I took Psych only in high school.
But I get a kick out of Palin, and Shatner too for that matter, and she’s had a surprising second life after the 2008 election, thanks to Facebook. But I really think she should have stayed on as governor. Clearly there is a leadership vacuum in the GOP right now and she’s more entertaining than Michael Steele.
I do not need to refrain from blogging for fear of looking like I endorse her for president. It’s not an influential blog so what does it matter. It’s really just my public diary, you know, a web journal sort of thing.
on Dec 17th, 2009 at 12:28 pm
I have a similar blog. It allows me to express myself. Blogging does not matter. Have I said that?
Part of life is learning how to read people. We get better at it as we get older, but still misjudge people. But with Palin - it is the absence of any intellectual depth, so painfully obvious during the campaign, that led me to believe that it was thigs ’such as’ her beauty pageant qualities and raw ambition that got her into power.
I could be wrong, but feel fairly OK with this one.
on Dec 17th, 2009 at 1:05 pm
I read Palin as a happy woman. I saw few of those when I was growing up.
If she’s not going to run, I hope she doesn’t play dog-in-a-manger like Cuomo did with the Democrats.
Dang, we could use some conservative beefcake…
on Dec 17th, 2009 at 1:22 pm
[Attention Readers: Mark Troll is now available for measuring your intellectual depth. If you are interested in having your depth measured, please contact Mark at his meaningless blog.]
on Dec 17th, 2009 at 2:10 pm
So Bux, was the complete subsidization of Stone a good thing because it made “…everyone happier, healthier, and richer?” Or was it a bad thing? Because: “Government spending creates gross misallocations of human and natural resources. It is so wrong and so destructive, I am at a loss to explain why a society would allow it.” Are there “good” subsidies and “bad” subsidies? If so, what criteria should be used? I’m sure many of the merchants and micro-businesses in downtown Missoula would jump at the chance to get a piece of the action Stone enjoyed for decades. Are they too small? Too independent? Why defend the bigs? Is it “trickle-down” theory? Please, do tell.
on Dec 17th, 2009 at 11:07 pm
Bug:
All misallocations of scarce resources are bad, but in a free market system, such misallocations are rapidly corrected. However, when government is the source of the misallocation, it may persist indefinitely.
This is not to say that a government misallocation of scarce resources does not make some people “happier, healthier, and richer.” It obviously does. But the key phrase is some people. Overall, across the entire economy, many others are hurt by it.
You need to read Henry Hazlitt’s “Economics in One Lesson” (1946). But before you do, I suggest you have Mark Troll measure your intellectual depth.
on Dec 18th, 2009 at 3:42 pm
Then you and I are both relieved that this federal government misallocation of scarce resources is over, at least for now, and that the problem did not last indefinitely. Sen. Tester has already started talking about a new, even greater, misallocation scheme at the Stone site burning wood chips to generate electricity. Markets eliminated the practice of using wood to fire boilers then coal replaced wood on steam locomotives. We’re dancing madly backwards.
on Dec 18th, 2009 at 5:42 pm
Your history of technology is a little rough, similar to Mark Troll’s history of America.
Most locomotive’s today are diesel-electric, i.e., a diesel engine spins a generator to power electric motors, which turn the wheels. Coal-fired steam locomotives began disappearing almost 100 years ago.
Burning woodchips to generate electricity might or might not be efficient, depending on the price of other fuels. A lot of woodchips today are used to make oriented strand board (OSB), which has almost completely replaced plywood in residential construction. I have no idea how that pencils out, burning woodchips versus selling them for OSB production.
I get the feeling wasted government money is not your primary concern. I think you might have a personal problem with Stone Container Corp. in Missoula, but you are having trouble articulating it.
on Dec 19th, 2009 at 7:31 pm
My advice, Ladybug: Don’t go there. You go round and round with these people. They have an answer for everything - and the advantage of not having to put up anything. They can point to market allocation of resources, presume that if it works well in so many situations, that it works well in all situations. Then when we point them to a situation where it is not working, say for instance health care, they find a way to blame government.
The world is such a simple place.
on Dec 20th, 2009 at 7:08 pm
[You know you are sunk when you need a bloviation from Mark Troll.]