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Sierra lumber firm to fold
El Dorado Hills sawmill's failure to erase 120 jobs.
By Loretta Kalb -- Bee Staff Writer
Published 2:15 a.m. PDT Saturday, August 16, 2003
The family-owned Wetsel-Oviatt Lumber Co. -- a fixture of the Sierra Nevada for three generations -- announced Friday it will close in 60 days due to skyrocketing workers' compensation costs and a glut of foreign competition.
The closing of the El Dorado Hills sawmill, in business since 1939, will eliminate work for 120 people, some of whom have been with the company for decades.
"I really feel for the people that work for us," said Cecil Wetsel, the mill's president and chief executive. "For about an hour and a half this morning, until 11:30, I was emotionally neutral. But when I got in there, wow, I lost it."
An 18-year employee, Connie Gaskill expected something like this.
"I'm not surprised. I just didn't think it would be this soon," said Gaskill, 60. She and other employees earned $12 to $23 an hour and received fully paid health benefits and a pension plan.
California has been losing its small sawmills for decades because of mechanization and the cost of complying with tough state environmental rules. Since January 1990, the number of workers has dropped more than 20 percent -- and at the end of last month stood at only 7,700.
More recently, companies have been buffeted by a glut of timber imports from foreign countries and other states, which industry advocates say now meet 80 percent of the state demand.
"We're meeting our wood demand from places that have far less environmental protection than California does," said David Bischel, president of the California Forestry Association, a trade group.
Meanwhile, lumber production in California has been falling. In 2001, the state produced 2.73 billion board feet, a 13.9 percent decline over one year and the lowest output since 1963, according to the Western Wood Products Association.
Wetsel-Oviatt has been producing in recent years enough lumber to build 2,000 homes a year, said Judith D'Amico, a vice president and wife of the owner. The company grossed $30 million last year -- and as much as $34 million in profitable years.
For environmental advocates, however, the need to protect timberlands remains crucial.
"California is the most environmentally conscious state," said Craig Thomas, director of the Sierra Nevada Forest Protection Campaign, a coalition of conservation groups. "We would argue there are not nearly enough oversights of logging on public and private lands."
But perhaps the biggest upset in Wetsel-Oviatt's bid to extend the family enterprise was the stunning news in April that the company's workers' compensation premiums jumped to $1.6 million a year, more than double last year's $760,000 premium.
"That was when the bleeding really started," D'Amico said.
While the company had its share of accidents -- eight since 1991, including five deemed serious by the state's Occupational Safety and Health Administration -- Wetsel-Oviatt executives said those events in recent years had little effect on premiums.
"Losses just have not driven premiums as they did in the old days," said James Salfen, chief financial officer. Last year, he said, money spent to cover injured workers reached $112,000 -- far below the $760,000 in premiums.
The premium rate hike, D'Amico said, added to the sense that a "piling on" was occurring in California.
Other rising costs for Wetsel-Oviatt: A timber harvest plan, essentially an environmental document that the state must approve before trees can be cut, now can cost as much as $75,000. The mill was spending $100,000 a month for natural gas, which is used to dry lumber.
Meanwhile, timber industry supporters lamented the closing of the business. At one time, the mill supported some 1,000 workers and their families.
"This is the loss of a local family-owned business, and it's also a loss of a leader in our industry," said Cheryl Rubin, vice president of the California Forest Products Commission. "It's a real irony that last year's California agriculturist of the year (Cecil Wetsel) is this year's man out of business."
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El Dorado Hills sawmill's failure to erase 120 jobs.
By Loretta Kalb -- Bee Staff Writer
Published 2:15 a.m. PDT Saturday, August 16, 2003
The family-owned Wetsel-Oviatt Lumber Co. -- a fixture of the Sierra Nevada for three generations -- announced Friday it will close in 60 days due to skyrocketing workers' compensation costs and a glut of foreign competition.
The closing of the El Dorado Hills sawmill, in business since 1939, will eliminate work for 120 people, some of whom have been with the company for decades.
"I really feel for the people that work for us," said Cecil Wetsel, the mill's president and chief executive. "For about an hour and a half this morning, until 11:30, I was emotionally neutral. But when I got in there, wow, I lost it."
An 18-year employee, Connie Gaskill expected something like this.
"I'm not surprised. I just didn't think it would be this soon," said Gaskill, 60. She and other employees earned $12 to $23 an hour and received fully paid health benefits and a pension plan.
California has been losing its small sawmills for decades because of mechanization and the cost of complying with tough state environmental rules. Since January 1990, the number of workers has dropped more than 20 percent -- and at the end of last month stood at only 7,700.
More recently, companies have been buffeted by a glut of timber imports from foreign countries and other states, which industry advocates say now meet 80 percent of the state demand.
"We're meeting our wood demand from places that have far less environmental protection than California does," said David Bischel, president of the California Forestry Association, a trade group.
Meanwhile, lumber production in California has been falling. In 2001, the state produced 2.73 billion board feet, a 13.9 percent decline over one year and the lowest output since 1963, according to the Western Wood Products Association.
Wetsel-Oviatt has been producing in recent years enough lumber to build 2,000 homes a year, said Judith D'Amico, a vice president and wife of the owner. The company grossed $30 million last year -- and as much as $34 million in profitable years.
For environmental advocates, however, the need to protect timberlands remains crucial.
"California is the most environmentally conscious state," said Craig Thomas, director of the Sierra Nevada Forest Protection Campaign, a coalition of conservation groups. "We would argue there are not nearly enough oversights of logging on public and private lands."
But perhaps the biggest upset in Wetsel-Oviatt's bid to extend the family enterprise was the stunning news in April that the company's workers' compensation premiums jumped to $1.6 million a year, more than double last year's $760,000 premium.
"That was when the bleeding really started," D'Amico said.
While the company had its share of accidents -- eight since 1991, including five deemed serious by the state's Occupational Safety and Health Administration -- Wetsel-Oviatt executives said those events in recent years had little effect on premiums.
"Losses just have not driven premiums as they did in the old days," said James Salfen, chief financial officer. Last year, he said, money spent to cover injured workers reached $112,000 -- far below the $760,000 in premiums.
The premium rate hike, D'Amico said, added to the sense that a "piling on" was occurring in California.
Other rising costs for Wetsel-Oviatt: A timber harvest plan, essentially an environmental document that the state must approve before trees can be cut, now can cost as much as $75,000. The mill was spending $100,000 a month for natural gas, which is used to dry lumber.
Meanwhile, timber industry supporters lamented the closing of the business. At one time, the mill supported some 1,000 workers and their families.
"This is the loss of a local family-owned business, and it's also a loss of a leader in our industry," said Cheryl Rubin, vice president of the California Forest Products Commission. "It's a real irony that last year's California agriculturist of the year (Cecil Wetsel) is this year's man out of business."
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