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U.S. duty spurs Weyerhaeuser to idle Canada mills
Friday, August 17, 2001
BLOOMBERG NEWS
Weyerhaeuser Co. said yesterday that it will idle three cedar mills in Canada and lay off 1,000 workers for at least two weeks because the United States placed a duty on Canadian softwood lumber imports.
Production at two mills in the Vancouver area will be halted Monday, and another will be idled Aug. 27, Weyerhaeuser said. At least 70 percent of lumber made at the mills is sent to the United States.
Weyerhaeuser said it will be more difficult to sell lumber from its Canadian mills at higher prices, and it faulted the U.S. government for applying the duty to cedar. The company said cedar is mainly used for home siding and decks, while other softwood is used to build the frame of a house, the main target of the duties.
"We're not going to continue to run up production with this kind of uncertainty," spokesman Paul Barnum said.
The Commerce Department last week placed a penalty of 19.3 percent on Canadian softwood lumber imports after shipments rose 31 percent in the second quarter from the first quarter.
Federal Way-based Weyerhaeuser had 47,200 employees at the end of last year.
A group of U.S. lumber makers, including International Paper Co., claim they face unfair competition because Canada's fees to cut trees in government forests are below market prices.
The tariff is preliminary, and a final decision is set for October. Duties being collected by the United States will be returned if the decision is reversed, the department said.
Weyerhaeuser has 15 other mills in Canada that make softwood lumber, which includes spruce, fir and pine, Barnum said. Almost 40 percent of Weyerhaeuser's softwood-production capacity is in Canada, with the rest in the United States, he said. They likely will be hurt by the duties as well, Barnum said.
Weyerhaeuser also extended its $50-a-share offer for smaller rival Willamette Industries Inc. until Sept. 14.
The company wants to buy Portland-based Willamette because of its profitable plants and to help make paper and lumber prices less volatile. About 46.5 million shares, or 42 percent of shares outstanding, have been tendered.
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