29 



Pilchuck Audubon Society. Also, accompanying Mr. Mayr is James 

 Geisinger from the Northwest Forestry Association. 



Did we lose Ms. Phillips at this time? We will begin without Ms. 

 Phillips. Mr. Mayr? 



STATEMENT OF THOMAS M. MAYR, PRESIDENT, MAYR BROTH- 

 ERS COMPANY; ACCOMPANIED BY JAMES GEISINGER, 

 NORTHWEST FORESTRY ASSOCIATION 



Mr. Mayr. Thank you, Mr. Chairman. I am honored and feel 

 privileged to speak before a committee of the Congress of the Unit- 

 ed States of Ainerica, but at the same time, I am embarrassed to 

 be here and to publicly have to tell you my business problems. That 

 is not the way my family has conducted business. But the direct 

 and proximate cause of the layoff of our 170 employees within the 

 last few months is caused by direct action or inaction of the Fed- 

 eral Government. Our employees had 1,870 man years of seniority. 

 That is over 11 years average per man of employment with our 

 company. 



I should emphasize now — ^there have been a lot of people talk 

 about timber supply and so on today — I would like to emphasize 

 that our mills are not closed because of lack of logs. There are logs 

 available to process in our mills, and that is what I am here to tell 

 you about today. 



With me today is Mr. Jim Geisinger with the Northwest Forestry 

 Association. He has written testimony, which he has submitted, 

 and I would like my written testimony and his to be entered as 

 part of the record and he is available to answer questions. 



I would like to start with who Mayr Brothers is. In 1933, two 

 teenagers, Werner Mayr, my uncle, and Marzell Mayr, my father, 

 borrowed a horse from a neighbor, borrowed some oats from their 

 dad and started logging. From there, the company grew, had good 

 times and bad, but has existed for 63 years. 



In the 1980's, due to high interest rates, we went through a 

 bankruptcy reorganization. We exited from that in the late 1980's 

 and concentrated efforts on our Hoquiam sawmill, which was 95 

 percent dependent upon timber from the Olympic National Forest. 

 We manufactured high-grade lumber for the Japanese market, 

 what you would call a niche market, specialty items. 



With the onset of logging restrictions due to the spotted owl, we 

 knew that we had to adapt, as the company had done over its his- 

 tory. We did a feasibility study. From that, we determined that we 

 should build a small log facility to compliment our facilities in 

 Hoquiam, to have some synergy with our other facilities, and proc- 

 ess second and third growth wood that would increasingly become 

 available in our area. 



As you could probably realize, financing a new sawmill in the Pa- 

 cific Northwest in the early 1990's was not an easy venture. When 

 we obtained financing, the center pin of that was a $5 million loan 

 from a local bank, guaranteed by the Farmers Home Administra- 

 tion Business and Industry Guaranteed Loan program. That is now 

 administered by the Rural Business and Cooperative Development 

 Service under the Department of Agriculture. 



Within the business plan for that loan, we had purchased several 

 Section 318 timber sales in 1990. Our business plan called for har- 



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