Timber Firm For Sale -- Success Story Ends Here?

EUGENE, Ore. - From its humble beginnings 85 years ago in a rough logging camp near Cottage Grove, Bohemia Inc. grew to become one of Oregon's biggest timber companies.

Today, Bohemia has 13 mills and more than 2,000 workers at plants stretching from Lincoln, Calif., to Eugene. With sales last year of $350 million, the Eugene-based company is the nation's leading maker of laminated beams and has made major strides in boosting overseas sales.

But despite its success, Bohemia is for sale. The owners want to dispose of it in one chunk or in pieces.

Bohemia is hardly the first family-controlled timber company in Oregon to put itself up for sale.

But this case is particularly significant because of the company's long and stable history in the region and the impact it has had on the economy, politics and civic affairs of Lane County and Oregon.

``They've made a major contribution to the fiber, pardon my pun, of Oregon,'' said longtime timberman John Hampton of Portland. ``I hate to see things like this happen to companies that have this level of corporate responsibility.''

Bohemia and the Stewart family, which has guided the company for seven decades, have given millions of dollars to Oregon State University, Sacred Heart Hospital, the University of Oregon, the Boy Scouts and dozens of other causes.

The company also has helped finance the campaigns of countless politicians, including Gov. Barbara Roberts, former Gov. Neil Goldschmidt, House Majority Leader Larry Campbell, Oregon's two U.S. senators and Eugene Mayor Jeff Miller.

Bohemia even bought a 10-seat breakfast table, at $1,000 a plate, when President Bush visited Portland last spring to campaign for Republican gubernatorial candidate Dave Frohnmayer, the attorney general.

Hampton and others say the sale of Bohemia would leave a gaping void, although no one knows when - or if - a buyer will step forward.

However, others who for years have battled Bohemia and its patriarch, L.L. ``Stub'' Stewart, over federal timber-cutting policies are hardly grief-stricken.

``If you had to say who's been calling the shots in Oregon, you'd have to say it is the timber guys like Stub Stewart,'' said former Oregon congressman Charles Porter of Eugene.

Porter fought Bohemia when it was accused in the 1980s of creating dummy companies to get out from under high-priced federal timber contracts. The company later took about $19 million in write-offs for sales it didn't log or turn back to the government.

``When they wanted a candidate, they'd go out and pick them with their checkbooks,'' Porter said. ``As far as policy-makers go, I have to say good riddance.''

Bohemia's decision to sell has surprised many industry officials, economists and others, given the company's long history of holding on through numerous economic downturns.

The 80-year-old Stewart said the move is based largely on the company's realization that it won't have enough timber to operate all its mills.

``It just came to the point of whether there was going to be enough timber to go around,'' said Stewart, the company's major stockholder and son of LaSells Stewart, who joined Bohemia in 1917 and eventually acquired half the company.

Stewart said a turning point was a corporate study, initiated at the urging of Richard Tinney, president and chief executive officer, that revealed Bohemia lacked adequate timber and other assets ``to maintain us as a public company.''

Stewart said proceeds from the sale of Bohemia's mills first would be used to pay off its $73 million debt, half of which was taken on in the past three years to finance the company's aggressive expansion. After that, leftover cash would be distributed to shareholders.

A reincarnated Bohemia that is much smaller and privately owned may emerge, Stewart said. He envisions a group of investors, either from inside or outside the company, buying some of the mills or timberland, taking the company private.

Under private ownership, the company would be able to cut costs associated with meeting federal securities rules, Stewart added.

In the mid-1980s, Bohemia's sales skyrocketed as the nation emerged from a deep recession. The company acquired more mills and built an $8 million laminated-beam plant in Vaughn, its third.

Tinney, who became chief executive officer in 1984 and president in 1987, is generally credited with reviving the company. He has pushed Bohemia into export markets and boosted laminated-beam sales.

But analysts also said the company's expansion and heavy debt may have forced the decision to sell out or scale back.

The company couldn't maintain its growth. When the recession hit the wood-products industry about mid-1990, Bohemia closed its Culp Creek sawmill and plywood mill last fall and its Drain plywood plant earlier this year.

Aaron Jones, longtime owner of Seneca Sawmill in Eugene, said Bohemia's decision to sell shows the harm caused by cuts in federal timber sales.

``When you see people like Bohemia putting themselves up for sale with good factories, a good community spirit and a good work force, that's telling this community and the state of Oregon something,'' Jones said. ``We ought to take another look at ourselves and ask if we're being driven by emotional decisions or pragmatism.''