One of Oregon’s oldest businesses is putting itself up for sale.
Economic analysts say a series of unfortunate financial decisions has made Pope & Talbot the latest casualty in the shrinking timber industry.
As Kristian Foden-Vencil reports, the company only employs about 280 people in Oregon, but the loss of yet another headquarters is tough for Portland to swallow.
Pope and Talbot has a long and storied history in Oregon.
Steve Chercover, a research analyst with D.A. Davidson, says Andrew Pope and Frederic Talbot first struck out for the West 158-years-ago.
Steve Chercover: “The company was started by two cousins, Mr. Pope and Mr. Talbot, who ventured I believe from Maine to the West coast with a view of benefiting off the California gold rush. And they established saw mills in the Pacific Northwest to supply timber down to the San Francisco Bay Area.”
As business boomed, the cousins bought more timberland and built more saw mills.
The company made the Fortune 500 list in 1988 and now employs about 2400 people. But recently, says Pope and Talbot spokesman Mark Rossolo, a series of problems have precipitated the company’s downfall.
Mark Rossolo: “If you’re looking at exactly what is going on: the housing downturn in the U.S. market has been a huge problem. You’re also looking at the strengthening in the Canadian dollar, as a company that does a lot of operations up in Canada that makes it therefore more expensive to do business up in Canada. And then also there’s a coastal strike up in Canada that’s increasing costs for some of the products that they use. So all of those factors gathered together has created this scenario that they’re facing right now.”
The result is that Pope and Talbot has been unable to pay its debts and has agreed to sell off all, or part of its business, to do so.
At times like this, the temptation is to blame management. But financial analyst, Steve Chercover says it’s more just a series of unfortunate decisions.
Steve Chercover: “I don’t think you could say there was bad management. But certainly there was a lot of bad luck. You can always look through the rear view mirror and say you wish you hadn’t of taken a certain strategic turn.”
Pope and Talbot has half a dozen saw and paper pulp mills to sell. Most are in British Columbia, but there’s one in South Dakota and another in Oregon — south of Albany.
Chercover thinks the employees in those mills are relatively safe.
Steve Chercover: “Things are difficult right now but I don’t think the mills are going away and the ways in which the creditors get repaid is to have viable assets.”
But Pope and Talbot’s headquarters in Portland, and the 280 jobs there, are another matter. If a company’s assets are sold off, there isn’t much to manage from a head office.
Since 2002, Portland has suffered the loss of several company headquarters including The Louisiana-Pacific Corporation, Willamette Industries and Columbia Forest Products. Portland Development Commission spokeswoman, Trisha Ryan, says the city does everything it can to retain such companies.
Trish Ryan: “The city is always sad to see any business leave the community and the primary focus of the economic development depart is retaining and expanding the businesses who are already here.”
She says the PDC has a team of people who call a list of 500 businesses every year – just to see if there’s anything the city can do to help.
Do they need more workers? Do they need a new location? Can the city help with gap financing?
But in the case of Pope and Talbot, there’s not much, if anything, the city could do.