Nanaimo-based forest equipment manufacturer Madill Equipment Canada became the latest casualty in the declining forestry sector.
On April 1 the company went into receivership and laid off nearly 100 workers company wide
“On Tuesday every one of us was terminated. There were 10 in the Prince George operation,” Prince George service manager Bill Barnholdt said. “We did sales, parts and service. A few of us were brought back, under the guidance of the receiver, to keep things afloat.”
The company produces and services feller bunchers, log loaders, yarders and harvester attachments for forestry contractors.
“We don’t know quite what the future of the company is,” Barnholdt said. “I feel pretty positive someone will pick up the product line. We have 500-550 pieces of equipment we’re responsible for in the Prince George area alone.”
The company was founded in 1911, and has had an office in Prince George for over 15 years.
Kevin Mason, a forestry analyst with Equity Research Associates, said the forestry downturn is far worse than stakeholders had anticipated and now it has begun branching out to other associated industries.
“The drops that we have seen have been far more than people expected would happen,” he said, adding that there are limited avenues for forest-dependent employers to diversify and stay afloat.
“There’s just too many negatives in front of Madill right now. You’ve got all these guys heading for the same exits,” Mason said.
The company was placed in receivership following a B.C Supreme Court order on April 1. RSM Richter Inc. has been appointed the interim receiver, and has begun the sale process for Madill’s business and assets.
Analysts predict more trouble on the horizon.
Mason said two years ago, the market was geared up for 200 million housing starts globally. No one expected the reality would be closer to 100 million.
“This is going to be a deeper trough than many had planned for,” he said.
Paul Quinn, forestry analyst with Salman Partners, said low lumber prices, surplus product, a softwood lumber duty and the high Canadian dollar have combined to create a situation far worse than expected.
“I think the slowdown has been made harder by the credit crunch in the United States,” he said.
“I expect this to continue,” he said. “There’s a huge glut of houses that are unsold in the United States.”
Ken Sommerville, a steel fabricator at Madill’s Naniamo factory, said he knew the company was in dire straits because they were not selling enough machinery, but didn’t expect the shutdown.
“We were told to take our tools and leave,” he said. “I’m 61, it’s not a good time to be looking for another job.”
Sommerville said about 30 unionized employees and 60-70 in management lost their jobs, but the number of people affected is higher because others recently laid off were collecting health benefits.
“We have quite a large number who were laid off prior to this,” he said. “When we’re at full capacity, we’re pushing close to 200 people.”
Sommerville worked with Madill for 10 years, but said there are many who have been there all their working lives, some as long as 35 and 40 years.
“I’m going to wait and see if they get it sold,” he said. “Other than that, I’ll have to look for another job.”