Oregon town sees another sawmill dismantled

PHILOMATH — It's been three years since the whine of big saw blades tearing through alder logs faded to silence at Diamond West Lumber on the outskirts of Philomath. Now it's been replaced by the sputter of cutting torches as work crews dismantle what's left of the sawmill and planer operation.

Diamond West shut down in November 2008, and this summer a federal judge issued a $5.9 million judgment against the financially distressed company in a lawsuit filed by Bank of America. On Oct. 13, the mill's equipment and rolling stock went on the auction block to satisfy claims by B of A and other creditors.

Buyers from throughout the Northwest came to bid on everything from automated saws and laser-guided edgers to forklifts and bulldozers, said Pete Friend of Pahl Industrial, the Portland company that ran the auction.

Friend said the sale raised almost $1.5 million for the banks that held notes on the mill.

Most of the auction items already have been hauled off by the buyers, but there's still one more job to be done: breaking down the remaining equipment and even the mill itself to extract the last shreds of value from the component parts.

"The scrap guys are in there now," Friend said. "They're in it for the metal."

A dozen or so workers were at the site Wednesday, including a crew from Pacific Recycling, which bought about 300 tons' worth of metal at auction and now must break it down for transport.

"It'll take a couple months to cut it up," said John Currie, a partner in the Eugene company.

Eventually, all those pieces will be hauled to a steel mill, where it will be sold for scrap.

Diamond West operated at the site for about six years, milling alder for the furniture industry and cutting blanks for Fender guitar bodies. Along with a chipping operation in Willamina, the Philomath plant employed about 80 people, according to former mill manager Leo Howard.

"It was sad to see that mill go. It was a decent operation," said Howard, a 30-year veteran of the timber business.

"We had a lot of great people who worked there, and it was really good for the community."

The mill was part of a larger group called Westwood Lumber, which was headquartered in Cottage Grove and had operations in Reedsport and Saginaw on the Southern Oregon coast. The company also had a manufacturing facility in China.

But the market for alder wood contracted sharply in 2008, at a time when the global economy was sliding into recession, Howard said, and the company found itself in financial difficulties. After Diamond West closed, he transferred to a Westwood mill, he said, but that company eventually went under as well.

Diamond West was one of 20 Oregon lumber mills that closed their doors between the fall of 2006 and the spring of 2010, according to data compiled by Associated Oregon Loggers, a wood products industry lobbying group.

Philomath, once home to nearly a dozen mills, now has just three — a sawmill and a planer owned by Georgia-Pacific, and a Marys River Lumber sawmill that recently shut down "indefinitely" until market conditions improve.

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