September and October 2006
 

 

 

Accept No Limits

Responding to a changing market and a strong will to survive are the keys to Dan D Company’s success

By Bob Bruce

To be successful, you have to take a chance and try to do anything — you can’t limit yourself,” says Dan Luoto, owner of the Dan D Company out of Tillamook, Ore. He should know. He’s been successfully logging for close to 35 years, and one of the hallmarks of his career has been a willingness to go out and take a chance.

“If I knew going in I couldn’t do it, then I wouldn’t do it,” he says. “But I’ve always been able to do it. I’ve done tons of things people said you couldn’t do, and now everybody does it.”

A variety of equipment gives the company flexibility to respond to the market.

Adaptability

In order to keep his company flexible and able to take on new challenges, Luoto maintains a selection of equipment. In addition to a brand new Timco 445XL, he has a Komatsu 270LL-7 and a Komatsu 220LL-7, both of which are less than a year old, a Waratah 622B, a Madill 117 yarder that he’s had for close to five years now, and a Madill 071 that he uses “as needed.”

“I run my machines 10,000 to 20,000 hours, and then try to rotate them over. That’s only about three to four years of use, but when you’re talking a half-million dollar machine you’ve got to rotate out every three to four years,” says Dan.

One of the main reasons Luoto needs to be flexible and responsive to market demands is because he’s got a fair chunk of money invested in machinery. As a result, he needs to keep that iron out in the brush working and making income.

“I’ve got too much equipment and too many families counting on me,” he says. “I have to produce. I can’t sit around and wait for something to pop. Just this year alone, I bought over one million dollars worth of stuff, so I have to keep it working. I have to produce a lot of volume.”

Larger Jobs

For Luoto, keeping the volume up tends to translate into not going after many small, private landowner jobs.“I’m not saying I won’t do the smaller jobs, but it takes more time to move in and move out than it does to do them, most of the time. I have to get a bigger chunk to make it worthwhile. The cost of everything is going up — we are actually probably logging now for less than we were ten years ago, our costs have gone up so much.”

Rising costs are a problem shared by everyone, and Dan admits he is certainly not alone in having to find ways to deal with the profit crunch. However, he does lament some of the changes that have taken place in the industry, and the results some of those changes have had on the way loggers do business.

Dan Luoto, owner of Dan D Company, stands next to his new Timbco 445XL.

Working with mills

One of the biggest challenges that loggers face these days, according to Luoto, is that while the mills expect to receive a top quality product, they don’t generally want to pay a premium to get it.

“A lot of the mills have dropped out, so there aren’t as many people to work for. Most of the ones that are left are the big corporation mills, and their timber managers are paid differently than the old-style timber managers — their incentives are different,” he says.“It used to be you worked with the mills to make you both profitable — you were a team member, not just a worker. Now you’re basically a cost item,” he says.

“That being said, everybody’s in the same boat. There are still some exceptions, but that’s where most of the industry went and that’s what you have to deal with and adapt to.”

One of the company’s biggest challenges is finding the individuals with the skills and the desire to make forestry their future.

Finding Those Qualified Workers

Contributing to the profit squeeze is the rising cost of labor, combined with the challenge of finding and keeping skilled workers. Like many other loggers, Luoto blames the school systems. “We’ve got two grades of kids these days — the super-achievers going to college, and the ones who just want to stay in their own communities and basically exist. What we are missing are the guys in the middle.”

“There’s still a few out there, don’t get me wrong,” he continues, “but I used to figure that out of ten, green guys I would try out, one would make it. Now it’s more like one out of 30. I pay in the upper 10 percent of the industry and it’s still not enough to attract good people. These days, I don’t just interview the workers, they interview me! If you have any skills in this industry, there’s no problem getting a job.”

The problem is that in logging (well, in any industry for that matter) you don’t start out right out of high school running the million dollar feller-buncher. You work the ground, setting chokers, or working a chain saw. It’s hard work, and not that many young people these days seem interested.

“You are basically competing with every other blue collar job in the community,” he says. “They can get more money doing assembly work. Even the mills pay more than we do, where it used to be that we paid a lot more than the mills. You either get people who just love the work, or those where it’s the only job they can get. I give guys chances they wouldn’t get anywhere else, and my turnover is still unbelievable.”

In it for the long haul But despite the challenges, it’s not like Dan Luoto will be looking for a new career any time soon.“I just turned 50, and it would be nice to be able to relax once in a while,” he says, “but you just have to have people who care what they’re doing and who have pride. The actual physical work is easier because the machinery has made it that way. You just have to take care of all the little things — then the rest of it just kind of works out.”

Luoto says he runs his machines 10 to 20,000 hours before trying to rotate them, which is about every three to four years.

 

TW

 

This page was last updated on Sunday, January 28, 2007