217 employees have received notices of termination effective Jan. 29, GM says
OMAK—For the second time in as many years, employees of an Omak mill are preparing to lose their jobs around the new year.
Late last week, the 217 employees of the Omak Forest Products mill received notices of termination that will be effective Jan. 29, essentially announcing the end of the Omak Forest Products’ operation of the tribally-owned facility.
Colville Tribal Federal Corporation confirmed the closure.
On Dec. 1, Forest Products received notification from CTFC it’s contract and log supply agreement with the company would end on Jan. 29, according to Omak Forest Products General Manager David Niessner.
The decision follows a year that has seen a nearly $1 million loss at the mill, according to Niessner. It’s a loss he attributes to a bad market that has slowly ticked upward since November, showing optimism.
“Next year, 2017, is shaping up to be a good year,” said Niessner. “I think we could have done some great things. The stock market has rallied over the last month. People’s optimism with building and construction has gone way up.”
January marks just 11 months since Omak Forest Products took over operation of the mill when former operator Omak Wood Products, a subsidiary of Atlas Holdings, pulled out of a contract and log supply agreement with CTFC.
The two companies had joined into an agreement in 2012 to restart the mill that had been closed since 2008 when the housing market crash tanked timber values.
Niessner, who previously worked for Omak Wood Products, said Atlas sunk close to $15 million into the mill through refurbishments and losses incurred between 2012 and late 2015 when they pulled out of the relationship with CTFC.
But the GM further noted he felt more would need to be done to the mill for it to become successfu, estimating $5 million would be needed to make the plant profitable.
“We have some equipment inside the mill that needs to be dealt with,” said Niessner. “We have some equipment in the log yard... A lot of the equipment is old and needs to be replaced. I would say in the next 12 months, $2-3 million would have been spent and at least $1 million per year after that keeping things in better condition.”
Colville Business Council Chairman Michael Marchand told the Omak Chronicle the tribe and corporation will look for new ways to open the company.
“The Colville Tribe is and has always been a timber tribe,” Marchand is quoted in the Chronicle. “The ability to run and operate our mill is very important to us economically, and for the health of our forest lands, but the tribe and the corporation cannot continue to afford to lose money.”
Tribal Tribune reached out to tribal officials who declined to comment.
Niessner said the mill will stop processing logs by the end of the year and stop marketing product by mid-January.
In December of 2015, 175 employees of the former business were set to lose their jobs if another investor hadn’t been found, at that time former Omak Wood Products President Richard Yarbough formed Omak Forest Products in order to continue operation of the tribally owned mill.