EDWARD HINES LUMBER CO.
To begin with, we started the year on a rather disastrous note. The dam was gone and most of the woods operation was inaccessible because of road washouts which had occurred during the last week in December of 1964. The logging Department moved into action quickly and placed a temporary rock dam across the river to get the water necessary for the powerhouse and for handling logs. After this, most of our equipment worked around the clock on Highway 58 restoring this to a passible condition, so that the normal economy of the area might function again. Fortunately, the rest of the winter favored us with good weather from a logging standpoint, and we were able to keep the mill supplied with logs, although at the end of January our inventory of logs was down to less than one week's supply for the mills. We were also able to promptly start work on the reconstruction of the dam, and this was completed in the month of May, and we were able to remove the rock-fill dam from the river and resume somewhat normal operations on the river.
During the storm, the rail service was curtailed into the area, and we had the first of several car shortages, which plagued us through the year. In March, April, and September, we had severe car shortages which prevented us from getting our plywood and lumber to market at the most opportune time and caused a serious build-up of inventories. We at Westfir, as well as our Traffic Department, have worked with other industry oraganizations in attempting to get legislation passed which will help prevent the recurrence of this problem, as we had it this past year, and to encourage railroads to build more and more boxcars for use by all industries. Those of you who have been at Westfir for many years can recall serious boxcar shortages in the early '50s. From that time to the present there has been a continual decline in the number of boxcars available for shipping all products. As a result, we may still have the problem for several years to come, unless prompt action is taken.
With the approval of the Board of Directors at their May meeting we have undertaken an ambitious program of modernization of our plywood plant which will cost us over one-half million dollars when completed. The results today can be seen at the plywood plant in the form of a lathe charger in front of the lathe, which improves our capacity to peel logs. At the dry end of the plywood plant, we have increased the capacity of our dryers substantially and installed one of the finest wide-belt sanders made for this industry, as well as a mechanical grading and sorting line. We also know that the further modernization of the plywood plant and further major expenditures will have to be made to keep us competitive for the timber that is available to us in the Upper Willamette. This past year we saw one of the sharpest increases we have ever had in the cost of timber to the plants, while at the same time we realized less money for our plywood and lumber in the market place. The future outlook of our timber supply is one of increased costs, and to maintain a competitive position, we have continued to seek ways to improve our operation, in order that the security of this plant and the individual jobs may be maintained at a satisfactory level.
One of the major changes which we can view in town is the removal of the houses across the street from the offices and the installation of decking and sorting facilities in this area. The Wagner Lumberjack is capable of lifting over 40 tons and has improved substantially our ability to handle and sort logs to the best advantage of both the plywood plant and the sawmill.
In summing up the results of last year, we produced 57 1/2 million feet of lumber, which is more than Westfir has produced at any time since the night shift was removed in 1955. In the plywood plant we produced 60 million feet of plywood, which is the greatest amount of plywood we have produced in one year since the plywood plant was built. It will be necessary for us to continue to improve on these results in the years ahead if we are going to remain competitive. We have additional modernization work, which is going on in the plywood plant toward this end and, with the cooperation of all employees at all levels, we can continue moving forward and make a success of our operation at Westfir.
In order to obtain the results which we had last year, there were many outstanding efforts by employees, particularly during the period of the flood and during the installation of the new equipment in the plywood plant.
I want to assure each of you that it is the objective of Mr. Hines, Mr. Howard, and the rest of management to do everything reasonably possible to provide full and regular employment at Westfir. We seek the cooperation of each of you in this continuous effort to improve the efficiency of our Westfir operations.
I am optimistic for the coming year and, with enough logs, good weather, and your help, I am sure we will have continuous and full production through 1966.
PAUL F. EHINGER