|
 |
|
|
|
Made in Washington - Buse Timber and Sales: An Employee-Owned Success Story |
|
|
|
Written On: May/June 2006 |
|
|
|
Written By: by Daniel Brunell |
|
|
|
Buse Timber and Sales of Everett is a throwback to a different era. Before Boeing, Microsoft, the latte and even bio-technologies, the timber industry ruled the day. It was a time when the image of a Washingtonian was not of a computer programmer with horn-rimmed glasses, but of a strapping six-foot man with an ax hewing down giant pines and firs.
Back in these formative days of Washington, every town depended on at least one mill to sustain it with cut timber for every use imaginable. Before the days of automation, these mills depended on the skills of their men (and some women) to read a log in order to get the most possible from it. This skill was vital because of the size of the timber that was brought forth. These mills cut timber in excess of 10 feet in diameter on a regular basis.
These days are becoming a distant memory. With the advent of automation and the rise of small-log mills, the forest products industry has consolidated. Mill after mill has faced the choice to innovate, merge with a larger company, or close down. Most have chosen to close down or merge. Buse decided to innovate.
The basic skills of being able to read a log and know how to get the maximum product out of it are an art form that is well and alive at Buse. Instead of going into the mass production wood markets, they focused on the specialty-cut wood markets. Buse can cut Douglas fir and hemlock logs, with an occasional spruce, to any number of custom sizes, including big 24-inch-by-24-inch beams. This means that Buse can use the bigger trees that no longer interest many of the larger companies.
This ability to do what others don't want or cannot do leads to a wide variety of orders. Buse can ship anywhere in the world via truck, rail or container ship. In a walk through the plant, you will see framing for mines in South America, girders for houses in California, and even housing beams for custom homes on the east coast. Buse can customize for the needs of the customers, something that is becoming rarer and rarer these days. With such a niche market, Buse has an aggressive sales staff that searches the world for orders.
Long an Industry Innovator
Buse has always been innovator in the industry. The land where the mill currently sits was purchased in 1943 by two brothers, Delmer and Norm Buse. In 1946, the Buses borrowed money and purchased a portable sawmill, as well as a surplus GI flatbed and some Snohomish County second-growth forestland near Lake Martha.
The 1950s were a time of constant growth for the Buse mill. A new planer was constructed in 1953, and then the Buses were able to sell directly to lumber yards instead of just cutting for remanufacturing plants. Starting at 60,000 board feet per shift in 1959, a second shift allowed Buse Timber and Sales to reach production levels of 150,000 board feet per day by 1965. In the late 1960s, Buse modernized the plant to increase production and safety concerns. Production has since increased steadily, currently running at 340,000 board feet per day. In 2005, Buse's total production was 88 million board feet.
2004 marked a year of change for Buse. For several years the former owner of Buse Timber, David Buse, had been looking for a buyer for the mill. Several employees suggested selling the company to the employees. At first, Buse rejected this proposal. However, after several years and dimming interesting the mill, the Buse family sold the mill to its 129 employees through an employee stock ownership plan, or ESOP.
ESOPs are a way to facilitate transfers of companies to employee ownership. ESOPs are federal retirement plans that are administered by the Internal Revenue Service and the U.S. Department of Labor. Almost unknown until 1974, ESOP covers about 11,000 companies, employing more than 8 million people across the nation. ESOPs are most commonly used to provide a market for the shares of departing owners of successful, closely held companies, to motivate and reward employees, or to take advantage of incentives to borrow money for acquiring new assets in pre-tax dollars. Unlike cooperatives where the employees own the company, ESOPs are trusts that are run on the behalf of the employees. Employees work with a Board of Trustees to oversee management.
The transfer of ownership has marked a dramatic change for Buse. "As soon as the paperwork was complete, there was a very noticeable difference...a complete change in attitude of the employee," said Ron Smith, president of Buse Timber and Sales. "People really started to care about how their decisions affected the company."
Phrases like, "It is not my problem" and "I don’t care" disappeared in an instant. Absenteeism and injuries fell exponentially. Employees are more responsible for their decisions since if it hurts the bottom line, it is they who see it and not some faceless Wall Street entity. With this new espirt de corps, Buse employees are encouraged to be innovative and seek ways to help the company.
This new change has also led to a lot of successes. The first year after the employees purchased the company, Buse had the best year in its history. "We've been able to pay a lot of our debt down," said Mark Hecker, vice president of operations for Buse Timber. "When we started, the lumber market just lit up!"
This success is not attributable to any individual leader, but to all of Buse's employees. "We give a great deal of responsibility to our supervisors and employees," said Hecker. "After all, if you help your employees, they will help you."
|
|
|
|
