A 110-year-old milling business in southeast Indiana is planning to close in the next six to eight months. New Albany-based StemWood President David Wunderlin says falling lumber prices, furniture manufacturers moving to China and the recession have dealt “punishing blows” the company could not overcome. May 12, 2015
NEW ALBANY, Ind. – StemWood, a New Albany-based veneer and lumber mill in operation since 1905, announced today it is winding down its operations here over the next six to eight months.
“The exodus of American furniture manufacturing to Asia and the prolonged recession in new housing have been punishing blows to our business model,” stated David Wunderlin, president and part owner of StemWood. David Brumett, vice president of manufacturing and partner in ownership added, “In an effort to persevere, we fine-tuned our strategy, downsized, and survived 2014. Unfortunately, with plummeting market prices for our lumber, and continuously rising operating costs, there is not a sufficient margin to sustain operations any longer.” As material is processed through each department, small groups of the 25 current employees will be let go over the next six to eight months.
“We are blessed with reliable, talented, hard-working and dedicated employees, and are very sorry to break up our well-functioning family,” stated Wunderlin. “We know it is a severe hardship, but we are also confident that our folks will be able to secure new jobs. We stand ready to help make that happen.” Wunderlin indicated job counseling, interview preparation, resume assistance, work references, and retention incentives are elements of the company's plan for laid off employees. To implement its plan, the company intends to work closely with WorkOne of Southern Indiana and will reach out to other employers in the wood industry and the community.
“Our people have been good to us and we want to be good to them during this difficult transition,” Brumett said. “We have excellent customers, too, and we will work closely with each one to assist them in securing new suppliers as we phase out our inventory.”
Wunderlin noted that the closure is a management decision based on the economics of the company and the industry. The four owners of StemWood, Wunderlin, Brumett, Rodney Bramer who serves as vice-president of sales and Kris Johnson, assistant vice-president and plant supervisor have a combined 100 years of experience with the company. “StemWood is under no duress from any outside source,” Brumett said. “In fact, we are operating extremely well. Our productivity is high and our quality is excellent. Our management team simply understands how harshly the dynamics of our industry are working against us. If you look around, you can see this has happened throughout our industry, including this very community. We've counted over 90 customers and competitors who have ceased production in the past several years, a dozen in Southern Indiana alone.”
The owners will actively seek alternative operators or new uses for StemWood. Brumett said they hope a new and vibrant entity can use the facility to provide ongoing value to the community.
StemWood, a 110 year old company, traces its roots even further back to the mid 1800’s in the heyday of steamboat construction along the Ohio River. Shipyards were placed on the shores of the river to produce wood components for the steamboats that patrolled the waterways. In 1905, John Roberts purchased a modern veneer slicer produced by Capital Machine Works in Indianapolis and installed it on the last active shipyard in the community. He began producing sliced decorative hardwood face veneers, presumably of the species native to this area.
The mill was under new ownership when devastated by the 1937 flood. Chet Stem purchased it and replaced it with the most advanced mill of its day. Opened on Grant Line Road in 1945, the mill has had numerous enhancements and improvements, but the basic footprint of its “new” location is unchanged.
In 1989, Richard Stem (Chester's son) retired as President after his 50 years of service to the veneer and lumber industry. He sold the mill to James Robinson and David Wunderlin, who has served as President of StemWood since that date.
Today, StemWood produces high quality 4/4 Walnut, Cherry, White Oak and Red Oak lumber as well as “flitch” and “clipped & bundled” hardwood veneers in a variety of species for a worldwide market.
Source: One Southern Indiana