Pining for Old Growth : After a Boom in the ‘80s, California’s Timber Industry Is Withering Fast

California’s timber industry has gotten hammered during the recession. Yet, surprisingly, the closure of dozens of mills and the loss of thousands of jobs in recent years aren’t a consequence of the state’s poor economy.

Rather, what is bringing down this once robust industry is a complex tangle of factors--from changing mill technology to controversial forest management and export practices to timber-harvesting restrictions imposed to save rare birds.

“What we’re experiencing is a lack of supply (and) a slow strangulation of the industry,” said Bill Dennison, president of the California Forestry Assn., a trade group in Sacramento.

The blame, he and others in the industry say, rests squarely on environmentalists who have put the interests of birds ahead of people--a claim environmentalists both resent and deny.

Timber harvest statistics tell much of the tale.

Throughout most of the 1980s, when housing and commercial construction sizzled, the harvest on public and private lands soared, hitting an annual peak in 1988 of 4.6 billion board feet. By 1992, the cut had plummeted to 3 billion board feet. (The most common measure to describe log and lumber volume, a board foot is a one-square-foot board that is one inch thick.)

This year, and for the foreseeable future, the industry can expect to cut a maximum of 2.7 billion board feet per year, said Bill McKillop, a professor of forest economics at UC Berkeley.

The reductions are coming primarily on public lands where cutting was ordered temporarily halted by a federal judge in 1991 until a plan to protect the northern spotted owl could be adopted. The plan is still being developed.

In the last decade, 67 mills have shut down in California, a third of them since 1988. Although the industry cannot say for sure how many jobs have been lost, a rule of thumb is that each drop of 1 million board feet in the harvest costs nine jobs directly and at least that many in service and other positions.

That would mean that something like 17,000 jobs have been lost in an industry that at its peak in 1989 directly employed 150,000.

Next year, the industry anticipates a further drop of as many as 8,000 direct jobs in California because available timber will have all but evaporated. Many large companies are moving their milling activities to the South, with its easier environmental regulations and cheaper labor costs. Smaller independents are going out of business.

A compromise unveiled in July by President Clinton to manage forest resources in the Pacific Northwest--including Northern California--by limiting cuts on federal lands has raised howls from both sides and promises further confusion.

Mill closures and layoffs have taken a harsh economic and social toll on the state’s remote timber communities in the Sierra Nevada and northwestern California, the two areas where most logging is done.

Seeking to protect the California spotted owl, a relative of the northern spotted owl, the U.S. Forest Service early this year decided to temporarily restrict logging in old-growth Sierra forests.

Similar limits aimed at helping the northern spotted owl have already had a deadening effect on towns nestled in the four northwestern California national forests--Shasta-Trinity, Klamath, Mendocino and Six Rivers--that represent the bird’s chief California habitat.

Accustomed to high unemployment and boom-and-bust cycles, many of these towns have watched jobless rates soar to nearly 19%.

Siskiyou County has chronicled a steady increase in the demand for free meals for needy children. Since 1990, the median family income there has tumbled by $3,000, to about $26,000. Juvenile crime is on the rise, and academic test scores are sinking, according to the county’s top school official.

Children feeling the threat of a parent’s layoff find it tough to concentrate, said Frank Tallerico, the county’s superintendent of schools, based in Yreka. “Schools must spend more and more money dealing with children’s self-esteem,” he said.

If current policies continue, the California Forestry Assn. predicts, California will lose 50% of its remaining mill capacity within the next two years.

Meanwhile, logging limits on public lands have prompted timber companies to cut more heavily on private holdings.

And they have forced up prices for raw logs and lumber at a time when home builders and buyers can ill afford the burden. A typical house now costs an additional $3,000 to $6,000.

The timber industry’s decline--and its tenacity--are evident in McCloud, a picturesque mill town 80 miles south of the Oregon border with a million-dollar view of snow-capped Mt. Shasta.

Despite brisk business at local bed-and-breakfast establishments and a growing reputation as a square-dancing mecca, the Siskiyou County community has the aura of a town that is barely holding on.

When the owner of the lone mill ceased operations in 1979, “the town basically died,” said Hobie Bailey, a sawyer and lifelong resident. Since then, with the reopening of the mill under new owners, he noted, “it has come back some, but with all the uncertainty it’s not always a happy place.”

Last summer, this one-time company town--built from scratch at the turn of the century by the defunct McCloud River Lumber Co. and McCloud River Railroad Co.--was bracing for another shutdown after logging restrictions depleted the timber supply.

But McCloud, which has shrunk by two-thirds to about 1,600 residents, got a reprieve because of the fast-moving fire that burned nearly 70,000 acres of off-limits Shasta County timberland last August.

Thanks to extensive salvage logging of the cedar trees that P&M; Cedar Products--the mill’s current owner--uses to make paneling and raw materials for pencils, the company has been able to stay open and pay its 125 employees.

The once stately McCloud Hotel, built by the lumber company in 1916 for unmarried workers, sits empty and dilapidated in the center of town, its broken windows and cracked, fading yellow paint belying the town’s vibrant past. A Bay Area architect plans to buy the property and restore it as a hotel, although previous efforts have failed.

Environmentalists, for their part, resent being blamed for the industry’s woes. They say timber companies precipitated the crisis by overcutting in the 1980s and by exporting raw logs--and processing jobs--to the Pacific Rim.

Furthermore, they say, employment had been on the decline because of increased mill automation.

“Many in the industry knowingly cut at levels that were unsustainable with the intent of liquidating the forest here and moving on to Chile, Venezuela and elsewhere,” said Sami Yassa, a staff scientist with the San Francisco office of the Natural Resources Defense Council. “The industry foreclosed options to its communities.”

As this emotional battle rages on, the prognosis is not good. The big timber companies--especially Sierra Pacific, which has been snapping up the private landholdings of distressed independents--will survive. Many smaller ones will not.

The crisis is prompting some desperate measures. In Humboldt County, residential landowners are harvesting redwoods from their back yards.

In the Trinity County town of Hayfork, loggers’ wives and preservationists have teamed up to devise new forest management concepts.

And a couple of U.S. Representatives have introduced legislation that would enable taxpayers to buy valuable old-growth redwood holdings from Maxxam, the controversial, indebted Houston company that bought Pacific Lumber years ago and doubled its timber cut to pay off junk bond debt.

Could California’s timber industry disappear? Yes, said Dan Nutley, a partner with the accounting firm of Grant Thornton in Stockton whose ancestors were Swedish loggers and whose clients include many forest products companies. “You’re seeing it happen right now.”

California’s Timber Industry * Employs more than 130,000 people * Supports nearly 300,000 additional jobs in services, transportation, agriculture and government. * Provides wages of more than $4 billion annually. * Accounts for 1 in 10 jobs in 11 Northern California counties.

timber harvest levels increased dramatically in the boom years of the 1980s, to an average of 4 billion board feet per year. Since then the cut has been dwindling. Environmentalists contend that the 1980s rate of harvest was unsustainable. the timber industry counters that plenty of forested land remains.