MONTROSE – The president of the company holding Intermountain Resources in receivership says he wants to see the company up to full speed as much as anybody.
“Having grown up in eastern Colorado in a small community, I understand that 100 jobs is a lot of jobs,” said Cordes and Company president, Ed Cordes.
“Then there are another 20 to 40 peripheral jobs, not to mention what the community gains…we have an important responsibility to do what we can, despite the lumber economy, to keep that thing going.”
Intermountain Resources, according to the Denver Post, is one of the largest sawmills in the state, employing about 100 people and paying about $10 million to subcontractors last year alone. The Montrose Economic Development Council estimates that Intermountain Resources “pumps more than $20 million a year into the local economy through salaries to employees, purchases from suppliers and contracts with truckers and others.”
Cordes said his company is “fervently endeavoring” to find a financial solution for Intermountain, including finding investors, getting concessions on contracts, finding “reasonably priced” timber, and looking for help from the state and federal government.
Cordes said a state contract to process timber downed by spruce beetle kill-off could help the mill, but nothing’s been decided yet, even though he says the Montrose mill is the largest of three mills on the Western Slope. The other two are Delta Timber Co. in Delta and Doug Jones Sawmill in Grand Junction.
“We see the mill as the solution to the beetle kill [timber] and we process a substantial amount of beetle kill – the only place in the state – but we haven’t secured a part of that yet,” he said.
The mill shut down in May, Cordes said, and reopened a few weeks later after his company was court-appointed to hold it in receivership. Receivership is a form of bankruptcy in which a company can avoid liquidation by reorganizing with the help of a court-appointed trustee, in this case, Cordes and Co.
The sawmill is struggling because of declining markets, Cordes said.
“Suffice to say that the troubled lumber market over the last couple of years was such that mills didn’t get as much for their lumber,” he said. “Forty to 45 percent of lumber mills have shut down, and because of the housing crisis, people are not building houses anymore.”
About 80 people are still working at the sawmill to process timber already there, Cordes said, while the search for affordable timber and other solutions continue.
Cordes said he has hope for the deal to process beetle-kill wood for the U.S. Forest Service, and talks are ongoing.
“Their job is to enforce contracts the government enters into, and we have gotten the attention of Forest Service personnel in both our local and national office in Washington D.C.,” he said. “We’re working on it.”
The Montrose plant is “fairly efficient” and has a great workforce, Cordes said, and he’s happy it’s operating, even without a permanent solution.
“How long we will be able to keep operating is in part a function of labor price and reasonably priced timber,” he said.
Work to process timber already in the Intermountain yard should go on another couple of weeks, Cordes said, and that his company is working with MEDC to put pressure on Colorado member of Congress to find a solution.
“I feel for the folks who are employees working under this uncertainty, and I understand the gravity of the situation,” he said. “I also feel for the unsecured creditors who got caught up in the shut down, the loggers and haulers and trade vendors who haven’t gotten paid because of the shut down.”
Between 200 and 300 unsecured creditors of Intermountain Resources still have not been paid, Cordes said.
But despite the economy, Cordes said he will do everything he can to make sure the sawmill remains viable and become profitable again.
“The best case scenario is between either the current owner, who is looking for the opportunity to restructure, or a new owner,” he said, “and the probability of that occurring is enhanced if we can avail ourselves of some of the federal or state programs available so that we could get a permanent owner back in the plant, maintain employment, and resolve beetle kill properly around the state.”
The worst case would be to not find a “permanent solution” and just hold on until the lumber market gets better, a scenario Cordes doesn’t accept.
“Right now, that second scenario isn’t on our agenda,” he said.