Pyramid Mountain Lumber Still Plugging Along, Moving Towards Auction

After the announcement that Pyramid Mountain Lumber was going to shut down, the owners didn’t know what to expect. Would the employees stick around? Would someone show up and want to buy the mill? Would we be able to run as planned and go to auction? As the days and weeks have passed, our owners have been pleasantly surprised by both our employees and the public support we have received.

In the 10+ weeks since we made the announcement, we have only had a couple employees move on from our employment, prior to being laid off. Our owners and management made it clear that they understand that people must make the right decisions for their families and circumstances and that there would be no hard feelings if people left. However, they also made it clear that our ability to pay severance was dependent on being able to stay on schedule and process all the logs and lumber through the mill. Our employees have proven, once again, that they are the glue that has held this company together over the
years. To date, we have only laid off three employees.

Our original wind-down schedule was to stop taking log deliveries on Friday, March 29th and run all log inventory through the mill by the end of June. We are currently on track to wrap up sawmill production by the 4th of July. We then plan to run all the lumber through the dry kilns and surface everything by mid-August. At that time, we will have our first large lay-off. When sawmill production is complete, the plan is to have those employees help out at the planer, in the log yard, and in clean-up in the sawmill.

We plan to retain a handful of employees through the auction date to help prepare for the auction and cleanup the property. We are currently scheduled to have the auction in late September. Another surprise after our announcement was the volume of phone calls we received from people wanting to help in some way. Some of those people are working towards finding a way to purchase and update the mill and keep it running. We currently have three interested parties in discussions with ownership regarding possibly buying the mill. We do not have any actual offers on the table right now, but we are still hopeful that one of those parties can make something work.

There are many challenges that new ownership would face. Any lapse in production would likely result in difficulty hiring employees back to work. One of the main issues that current ownership has been dealing with is a shortage of employees. The new operation would have to be able to run more efficiently with fewer employees, both because of the difficulty in hiring back your workforce, and the fact that 40% of the current employee population at Pyramid is age 58 and older. Some of those employees will likely retire, and others will look for employment elsewhere while new ownership reorganizes and possibly builds a new facility.

New owners would also have to come up with a significant amount of operating cash after the purchase, both to build a new facility or re-tool the existing facility, and to buy logs for up to two months before they are able to sell anything and start having a positive cash flow.

Missoula County has stated that they will work with new ownership to transfer existing permits, which will alleviate one major hurdle in moving forward. They have also stated that they will expedite building permits for new owners.

Only five days after our announcement to close, Roseburg Forest Products in Missoula also announced their plan to close. While their announcement had nothing to do with Pyramid’s closure, the ripple effect of two timber products companies closing in Missoula County is hard to imagine. Dealing with residual products (sawdust, shavings, and chips) will be another challenge for new ownership, should there be a purchase. Pyramid was able to contract with Weyerhaeuser in Columbia Falls to take all our residuals, but due to a shortage of trucks, we are stockpiling the chips in the west end of our lumber yard. Three trucks used to be able to make three trips per day from Pyramid to Roseburg, but those three trucks can now only take one load each to Columbia Falls (from Missoula to Seeley to Columbia Falls and back to Missoula). Unless new ownership can find a way to use those residual products, that will continue to be a challenge.

We are still moving forward with our original wind-down plan. While we did give a soft deadline of May 15th to potential buyers, we are still willing to consider any offers. However, at this point, we will be completely out of log inventory at the end of June, which makes a transition without downtime nearly impossible.

Pyramid’s owners and management would like to thank Seeley Lake and surrounding communities for all the support we have seen through this process. This was certainly not the future we had in mind for Pyramid Mountain Lumber. The owners have invested over $10 million in the mill over the last three years to modernize and keep it running, but unfortunately, the challenges with employees, lack of employee housing, and rising costs overwhelmed those efforts.

We are all hopeful that there is a future for some sort of operations under new ownership at the mill, but only time will tell.

Source: Pyramid Mountain Lumber, Inc.