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Rogel applies balm to Willamette wounds

Weyerhaeuser chief denies plant-closing rumors, touts advantages of bigger firm

'Good morning, Willamette Industries, a Weyerhaeuser business' were the scripted words that longtime Willamette receptionist Marj Bates greeted callers with Wednesday morning.

However innocuous, the greeting Ñ spoken for the first time that day Ñ carried the emotional weight of defeat.

It was the first public confirmation that the 14-month battle for control of the once fiercely independent forest products giant was indeed over and that integrating Portland's last Fortune 500 headquarters company into the Weyerhaeuser fold was now under way.

Earlier in the week, other wrenching changes in the Willamette 'family' were disclosed. On Feb. 6, it was learned, Duane McDougall, the company's chief executive officer, had quietly left the company along with three other senior Willamette executives.

'Duane and I chatted,' said Steve Rogel, Weyerhaeuser's chairman and chief executive officer, 'and he's going on to pursue other interests.'

Now that 97.5 percent of Willamette's shareholders have tendered their stock in the $7.7 billion deal, William Swindells Jr., Willamette's chairman and scion of one of the century-old company's founding families, leads a board that will exist only until the deal finally closes in a few weeks.

Rogel, who spent 25 years at Willamette, the last two as its chief executive officer, spent Monday in Portland ministering to the wounded at Willamette's headquarters in the Wells Fargo tower. His bedside manner at the closed meetings was described as impeccable, his message almost soothing.

At four successive meetings with groups of employees, Weyerhaeuser's chief acknowledged the disappointment that many felt at how things turned out and offered assurances that Weyerhaeuser values the intellectual assets they bring to the new combination.

'The prospects for this company are better than for anyone else in this industry, if we do this right,' Rogel told his listeners, many of whom carried 'No WEY' placards at demonstrations last summer against a takeover by the Federal Way, Wash.-based rival.

Exhibit A in several of Rogel's presentations was a huge packaging contract that Weyerhaeuser recently landed with Tyson Foods, which buys on the order of 2 percent of all the box packaging in the United States. It was an account, he said, that Weyerhaeuser could not have handled on its own but one that the combined companies can easily fulfill.

Big customers like that, he said, are looking for single-source suppliers. That's why the Willamette-Weyerhaeuser combination makes sense.

The question of cost cutting and job losses hung in the air.

'When we talk about synergies, we're talking about achieving it in ways other than eliminating people,' he told them, but he conceded that he couldn't guarantee that all would keep their jobs. Recommendations from an integration team headed by Richard Hanson, a Weyerhaeuser senior vice president, are due by June 1.

Rogel still expects to find $300 million in cost savings as result of the combination, at least 40 percent of it in the first year, he said in an interview later that day.

He ridiculed speculation in the industry that closing or selling Willamette's nine plywood plants, including three Oregon mills, was at the top of his hit list.

'We paid an awful fair price to buy Willamette's assets and intellectual property, and we're not about to walk around willy-nilly closing plants,' he said.

The engineering and information systems groups, which account for 245 of the 420 headquarters employees, had the least to worry about.

Willamette's engineers, regarded as among the best in the industry, 'no doubt will transfer over wholesale,' Rogel said. 'They'll just be working on a bigger set of properties.' And information technology people 'are harder than heck to get hold of in any event, so you don't give up them up lightly.'

Contact Harry Lenhart at This email address is being protected from spambots. You need JavaScript enabled to view it. .