Timing is everything
Word around the camp fire is the coastal forest industry strike is going to be long and painful, what a surprise. If there could be a better time for forest companies to have their workers to go out on strike I’m not sure I could think of one. After all the strong Canadian dollar, the credit crisis, weaken housing starts in the US and poor lumber prices have all but made the industry unprofitable. I can understand the union's perspective on working conditions but the real tragedy is the company will make more money not operating than it will running in such poor economic conditions.
According to the recently released PricewaterhouseCooopers sawmill earnings report for 2006 and up to quarter two 2007 North American sawmills have either broke even or in most cases lost money. Average delivered log costs in North American have risen by 66% in the last five years, the single greatest cost increase for sawmills. Sawmills in South Africa, Chile, and North West Russia showed the highest profits. Click here to read the PWC release
At this point with many experts predicting continuing strengthening of the Canadian dollar and weakening of the US housing market so there seems to be little motivation for forest companies to settle the dispute and get back to the work of loosing money. It is a strange and risky situation for both the forest companies and their employees and with an overall strong economy in BC there is little hope the government will step in. With so many jobs available in other industries it is likely the BC government will simply let the dispute run it’s course and if the workers leave the industry for greener pastures, so be it. In fact this is already happening a fact the cash strapped forest companies are either ignorant of, or are powerless to stop. In talking to people around the industry skilled trades people are already leaving for jobs in oil and gas, construction and mining. The situation has the potential to severely impact the industry when a large portion of it’s skilled workers are gone with no one to replace them.
The current Coastal strike is symptomatic of the forest industry a whole, there is simply no wiggle room for employees or companies when there is no money left on the table. Tree’s will stay on the stump or continue to head out of the country if it’s uneconomical to turn them into lumber, it’s that simple. The union and companies should both put down the guns and take a long hard look at the market place in which we sell our products, because if we can’t sell something nothings going to happen, but I guess in the end thats where the coast is today.
Joe Perraton
Forest Industry Network