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Anthony Timberlands Inc. is preparing to cut production in half at its Malvern and Bearden pine mills, idling about 200 employees, CEO Steve Anthony said Thursday morning.
The $600 weekly bonus that Congress authorized for workers laid off due to the coronavirus pandemic has complicated the decision-making process, Anthony said.
“We’ve got mills full of people that want to draw unemployment, which is not safe and it’s not productive,” he said.
After polling employees on whether they want to continue working, most of them for take-home wages less than unemployment will pay through July 31, Anthony said he hoped to continue operating a single shift at the two mills.
“At the end of the day, I hope we can get us through July 31, which is when this unemployment bonus expires,” he said. “I cannot understand how the people who made this decision [to supplement unemployment benefits] didn’t realize that paying more for unemployment could be a major driver of the unemployment rate.”
In a letter sent today to customers and suppliers, Anthony said, “Every effort will be made to steer production into products where we have contract commitments,” and that he expects the curtailment of operations to last as long as the unemployment bonus is in effect.
Another complication that he explained in the letter is the fact that Anthony Timberlands, with about 650 employees among its various locations and subsidiaries, is not eligible for any of the U.S. Small Business Administration loan programs that were also part of the federal government’s stimulus response.
“In many areas, we are competing with others who are being supported by our government,” he wrote.
Anthony said his contract customers — mostly wood treaters — have so far still wanted the products they had ordered. But the market for pine lumber is “imploding,” so by next week “everything may have changed. We may have to close everything down.”
The current situation is worse, he said, than the housing bust that began in 2008. Back then, Anthony Timberlands temporarily curtailed one shift at Bearden and continued running two shifts at Malvern.
“This is a whole different deal,” he said. “That was purely a market deal. This is a market deal on top of the virus deal on top of the unemployment deal.”
Anthony Timberlands ranked No. 39 on Arkansas Business’ most recent list of the state’s largest private companies, with revenue of $266.9 million in 2018. In addition to the pine mills at Bearden and Malvern, it operates specialty wood manufacturing plants at Sheridan, Beirne (Clark County), Hope, Magnolia and Mt. Holly (Union County).