Feasibility Analysis: Creation of a Wood Technology · Feasibility Analysis: Creation of a Wood Technology Program at North Central Wisconsin Technical College October 18, 2007 …

Feasibility Analysis: Creation of a Wood Technology Program at North Central Wisconsin Technical College

October 18, 2007 Wisconsin Economic Development Institute (WEDI)

University of Wisconsin-Cooperative Extension

Center for Community and Economic Development

Dr. Roger Nacker, President Wisconsin Economic Development institute

Wisconsin Economic Development Institute, Inc. 10 East Doty Street, Suite 500

Madison, WI 53703-3397 Phone: 608-661-4626

E-mail: [email protected]

Professor Andrew Lewis, Community Development Specialist Center for Community and Economic Development, University of

Wisconsin-Cooperative Extension 610 Langdon Street, Room 328

Madison, Wisconsin 53703 Phone: 608-263-1432

E-mail: [email protected] We extend our appreciation to Associate Professor Russell Kashian, Economics Department, University of Wisconsin-Whitewater for his assistance with the Implan™ analysis and to Matthew Kures, Information Process Consultant, Center for Community and Economic Development, for developing the national location quotient estimates. Disclaimer This feasibility analysis relies on data from private sources, secondary sources, and from public data sets. University of Wisconsin – Extension and the Wisconsin Economic Development Institute cannot be held responsible for the accuracy of this data or for decisions made resulting from the use of the data in this report. The conclusions and recommendations in this report are made solely by the authors and do not necessarily reflect the opinions of the University of Wisconsin Extension, the Center for Community and Economic Development, or the Wisconsin Economic Development Institute. An EEO/Affirmative Action Employer, University of Wisconsin-Extension provides equal opportunities in employment and programming, including Title IX and ADA requirements.


Table of Contents

Executive Summary............................................................................................................................... 1 Introduction ............................................................................................................................................ 3 Background............................................................................................................................................. 3 The Project............................................................................................................................................... 3 Define the Importance of the Wood Products Cluster...................................................................... 3

Wisconsin Wood Products Cluster Important Nationally................................................... 4 Wood Products Cluster Important to Many Counties in Wisconsin................................... 4 Wood Products Cluster is also Important to Langlade County........................................... 5 The Economic Multiplier—the Impact of the Wood Products Industries .......................... 6 2004 IMPLAN Estimates for Langlade County Wood Products........................................ 7 Survey of Langlade County Wood Products Industry Operators ....................................... 7 The Survey Participants ...................................................................................................... 8 Langlade County Wood Products Industry Concerns......................................................... 8 Raw Material Needs............................................................................................................ 9 A Need for Skilled Workers Identified............................................................................... 9

Examining the Economic Development (ED) Sustainability of Local Forest Lands .................. 11 Langlade County Forest Statistics For 2004..................................................................... 11 Langlade County Forest Lands are Certified as Being Managed for Sustainability......... 11 Wood Growth and Removals Inventory ........................................................................... 11 County Forest Harvest Volumes and Revenues................................................................ 12

Considering the Feasibility of Developing a Wood Technologist Program at North Central Technical College in Antigo................................................................................................................ 12

FVTC Wood Technics Graduate Information .................................................................. 12 2006 Graduate Employment Data Fox Valley Technical College.................................... 13

Comparison of the NCTC District Boundary to the Wood Product Manufacturing ................. 14 Potential Demand for a Wood Products Technology Degree in Langlade County .......... 14 Potential Laborforce Demand for a Wood Products Technology Degree ........................ 16 NCTC Enrollment Pattern................................................................................................. 16

Estimating the Economic Impact of a Wood Technologist Program............................................ 17 County and Municipal Economic Development Expenditures......................................... 17 A Wood Technologist Program is Feasible ...................................................................... 18 The Property Tax Growth From a Modest Industry Employment Increase ..................... 19

Appendices ........................................................................................................................................... 21 How the Multiplier is Calculated...................................................................................... 21 2004 Forest Inventory for Langlade County..................................................................... 22 Langlade County Wood Product Industry Laborshed Tables........................................... 25 Present Net Worth Calculations........................................................................................ 26

Industry Survey Results Summary.................................................................................................... 27

Wood Technology Program / 1

Executive Summary


The Wood Products Industry* is an important element in the economic well-being of Langlade County. This Wood Products Cluster is also a major component of the state and national economies. The county has a high concentration of wood product manufacturers and it is its leading employer. The industry is also well paying with an average salary of $32,439 in 2006. In recent years, this industry group has come under intense foreign competition. The industry can compete based on quality, if not on price. In order to do this, the industry must modernize using more sophisticated production technology, which requires labor with higher and different skills. With sufficient skilled labor, industry officials have indicted they have the potential to expand. This proposal considers creating a Wood Technologist Program at North Central Technical College (NCTC) in Antigo. *(Wood Products Sector is defined as all of the industries in the North American Industry Classification System (NAICS) 321. This sector consists of sawmills, wood preservation, millwork, windows & doors manufacture, etc.) According to Harvard University's Cluster Mapping Project, Wisconsin is ranked as the number one state in the National Forest Products Cluster. Within the state, twenty-eight of seventy-two counties look to the forest industry (including paper making) as their number one manufacturing employment sector. Areas of local industrial specialization may also be discerned by computing Location Quotients (LQ). A high LQ (over 1.0) provides a measure of local industrial specialization and possible comparative advantage, compared to the reference region (US) in that sector. In Wisconsin in the Wood Products industry, 15 counties have LQ's over 10. Of the 15 counties, 13

are located adjacent or near to the NCTC District. Langlade County is one of those counties. In 2005, total manufacturing compensation was $68.9 million in the Wood Products sector (22% of all manufacturing wages).

An economic multiplier is a quantitative measure of economic impact that explicitly recognizes that economies (local, state, regional, or national) are interconnected networks of interdependent activity. Using multipliers, the Wood Products industry in Langlade County is estimated as being responsible for a total of 686 jobs, total wages of almost $24 million and producing total output of almost $115 million. This is almost double the direct impact of employment and wages.

Companies representing 95% of the wood product manufacturing employment in Langlade County responded to an industry survey. In the survey, workforce costs (health care, workers' comp, wages), was identified as the most important issue, followed by global competition, raw

Wood Technology Program / 2 material supply and operating costs. Interestingly, the wood products manufacturing sub-sector in Langlade County is one of only two where wage averages are above the state average. Three out of the five respondents also said that skilled workers are not readily available in their geographic area. However, half of the respondents indicated the potential for up to 10% employment growth within the next 12 months. In terms of the raw materials, only one firm was purchasing more then 50% of their raw materials from within 80 miles of the plant. All of Langlade County forestlands are Sustainable Forestry Initiative (SFI) certified as being managed for sustainable yields. At present the County forest is considered a maturing hardwood resource not ready

for cutting. The majority of the county forest material harvested at present is pulp. However, the dollar value of annual timber sale revenues is substantial and growing, totaling $2.2 million in 2006. All of the counties in the NCTC District can be considered to be highly successful Wood Products industry locations, based on our previous analysis. All of the people currently working in Langlade County do not live there. Twelve percent of the workers (over 1,000 people) come from the counties adjacent to Langlade County. Within the counties in this Langlade County laborshed, there are 125 wood product manufacturing establishments, employing 8,733 workers with an annual payroll of $270,838,000. This workforce is a very large potential market for Wood Technology training.

Langlade County spends less ($1.67 per capita) on economic development activities then the other counties within the Wood Products industry concentration in Wisconsin.

$17.82$1.61

$9.10$3.60

$25.10$1.67

$1.07$0.00

$5.27$31.77

$7.17$1.82

$25.97$11.60

$9.76

$0.00 $5.00 $10.00 $15.00 $20.00 $25.00 $30.00 $35.00

Ashland CountyClark County

Florence CountyForest County

Iron CountyLanglade

Lincoln CountyMenominee

Price CountyRusk County

Sawyer CountyShawano

Taylor CountyWashburn

Wisconsin Total

Per Capita County Economic Development Expenditures (2004)

At $27 per capita, Antigo's expenditures are also considerably less than most other comparison communities. The local estimate for constructing and equipping a building to house a Wood Technologist program at NCTC is approximately $1 million. If manufacturers were to expand by 10%, the employment would total 754. Total wage impact would also increase to $26,293,681. Is this significant? Property taxes consume 4.4% of personal income in Wisconsin. Based on this increase in property tax revenues, the present worth of the increased property taxes thereby generated by the wage growth would equal $1,668,472, over the life of the capital investment for training.


The Langlade County Wood Products industry is very important to the local economy and is near the geographic center of a nationally important Wood Products Industry Cluster.

Introduction

The Langlade County Wood Products Industry is very important to the local economy and is near the geographic center of a nationally important Wood Products Industry Cluster. Using multiplier analysis, the total impact of the industry is demonstrated to almost double the direct impact of employment and wages. To effectively compete in global markets, the industry feels it needs more skilled labor. While local forest resources do not provide raw materials directly to local industries, they do market to other companies in the regional cluster. Most of the public lands are managed for long-term sustainability. In this part of the Wood Products Cluster, industry wages are currently higher than in the area served by the State's only other Wood Technology Program, FVTC in Oshkosh. Langlade County currently spends less on economic development than comparable counties. The economic value of potential property tax growth from enhanced industry viability due to a certified wood technologist program is estimated as more than the estimated cost of the facility.

Background

The Wood Products Industry* is an important element in the economic well-being of Langlade County. The county has a high concentration of wood product manufacturers. In recent years, this industry group has come under intense foreign competition. The industry can compete based on quality, if not on price. In order to do this, the industry must modernize using more sophisticated production technology, which requires labor with higher and different skills. A skilled workforce and strong business dynamics are most highly correlated with regional economic growth. To justify the capital investment to ensure company profitability, growth and sustainability, the companies must be assured of a supply of highly skilled labor. A proposal is being considered to create a Wood Technologist Program at North Central Technical College (NCTC) in Antigo. *(Wood Products Sector is defined as all of the industries in the North American Industry Classification System (NAICS) 321. This sector consists of sawmills, wood preservation, millwork, windows & doors manufacture, etc.)

The Project

The project consists of documenting the economic importance and sustainability of the wood products sector in Langlade County and conducting a feasibility analysis for creating a Wood Technologist program.

Define the Importance of the Wood Products Cluster

The first step is to define a potential wood products region/cluster that could benefit from a Wood Technologist program.


Wisconsin Wood Products Cluster Important Nationally

According to Harvard University's Cluster Mapping Project, Wisconsin is ranked as the number one state in the National Forest Products Cluster. Wisconsin has the largest national share of employment in the industry compared to all other states. In fact, Wisconsin has almost twice the share of the second ranked state, Pennsylvania.

W FOREST PRODUCTS CLUSTER: SHARE OF NATIONAL CLUSTER EMPLOYMENT BY STATE Source: Cluster Mapping Project, Harvard Business School, Michael Porter

Wood Products Cluster Important to Many Counties in Wisconsin

Within the state, twenty-eight of seventy-two counties look to the forest industry (including paper making) as their number one manufacturing sector. Another way to define the economic importance of industry groups is to compute Location Quotients (LQ) for the industry. Areas of local industrial specialization may be discerned by comparing the composition of employment in the region to a larger, reference region. A relatively high (or low) percentage of employment in a sector compared to the reference region may reflect a competitive advantage (or disadvantage) in that sector. Analysts frequently use this measure called a location quotient for this type of comparison. This is simply a ratio comparing the local percentage of employment in a sector to the national average percentage of employment in that sector. A location quotient greater than one suggests a regional advantage, or concentration of employment, in that sector. A location quotient less than one suggest a regional disadvantage in that sector.


Comparing Wisconsin individual counties to the national industry composition for wood products indicates 15 counties have LQ's over 10. Any LQ over 1.0 is considered to characterize the industry as an export-base industry. That is, within a given county, the industry is considered to produce more than is required for self-sufficiency with the economy and the rest is sold outside of the county, thus bringing new dollars into the local economy. And, those locations with industries with high LQ's are assumed to have some sort of competitive advantage for that industry group. In this case, that advantage is resource availability with an institutional history of resource conversion.

Wood Products Cluster is also Important to Langlade County

Of the 15 counties, 13 are located adjacent or near to the NCTC District. Langlade County is one of those counties.

NAICS 321 - Wood Product Manufacturing Industry Concentrations (County Location Quotients based on 2003 Employment Levels)

Langlade County also looks to Wood Product Manufacturing as its number one industry sector (NAICS 4 digit) in terms of employment (380).

Within the broader manufacturing sector in Langlade County, the Wood Products sub-sector provides 22% of the total manufacturing employee compensation.

Selected Top Industries in Langlade County, Wisconsin (Number of Employees)

Industry (NAICS 4-digit) Employees Other Wood Product Mfgr 380Full-service restaurants 370Limited-service eating places 228Depository credit intermediation 169General freight trucking 153Religious organizations 143Health and Personal Care Stores 140Offices of physicians 132Specialized freight trucking 128Automobile dealers 127Automotive Parts, Accessories, and Tire Stores 117

Gasoline stations 103 *Data Source: CBP//County Level/2004

Langlade County has a significant comparative advantage in Wood Products and it is the county's leading employment sector.


Langlade Co M anufacturing Com positionTotal Em ployee Com pensation

Total = $68,898,0002005

W ood Products22%

Fabricated M etal Products

16%

M ach inery Products

27%

M iscellaneous M fgr9%

Food Products10%

O ther Nondisclosed16%

Describing the Langlade County Wood Products Industry

The Economic Multiplier—the Impact of the Wood Products Industries—Langlade County, WI

A focal point of this study is to assess the economic impact of Wood Products related industries in Langlade County Wisconsin. This study employs economic multipliers developed through the 2004 IMPLAN database. In the most general sense, an economic multiplier is a quantitative measure of economic impact that explicitly recognizes that economies (local, state, regional, or national) are interconnected networks of interdependent activity. When a change takes place in one part of such a network, the effects propagate throughout the system. These effects typically result in a larger total impact than the original change would have caused in isolation. For example, when 200 workers are hired to work in a new sawmill, employment tends to increase by more than the 200 jobs directly tied to sawmill. This happens because, as materials and equipment needed to operate sawmills are purchased, this new spending creates additional jobs in the industries that supply those materials and equipment. People working in sawmill also spend their earned income on consumer goods and services. This spending tends to create jobs in the businesses that produce those goods and provide those services. We can therefore define the “employment multiplier” as the number that is multiplied by the number of jobs directly involved in the sawmill to yield the total number of jobs created, both directly in the Sawmill and the additional jobs created in the community as a result of the project. If the total number of jobs created were 300, the employment multiplier in this example would be 1.5 (1.5 x 200 = 300). In a similar way, the “income multiplier” allows us to calculate total income generated by the project as a multiple of income directly generated; and an “output multiplier” that allows us to calculate the total value of output produced as a multiple of the


Using multiplier analysis, the total impact of the industry is demonstrated to almost double the direct impact of employment and wages.

value of the direct output (in this case, the value of the sawmill output). The technique for the multiplier calculation is given in the Appendix. These additional 100 jobs fall into two categories: the indirect and the induced effects. These effects are in addition to the direct effect of an economic activity. Indirect effects are the impacts on the chain of suppliers to the economic sector whose activity we are considering to be the direct effect; induced effects are the changes in consumer spending that are generated. For example, if we are looking at the job impacts of a new sawmill in Langlade County, the direct effect is the number of jobs created by the facility itself. The indirect effect is the number of jobs created at those firms that supply the facility with materials, equipment, etc. (and at the firms that supply those suppliers). The induced effect is the number of jobs created as a result of the additional spending done by households whose income has gone up because of the direct and indirect effects, including the jobs created due to higher spending by those households now earning more money because their members work at the firms that sell products to consumers.

2004 IMPLAN Estimates for Langlade County Wood Products

Sawmill Veneer Cut Stock Other Millwork TotalDirect Employment 140 23 70 92 Indirect Employment 138.4 16.2 35.5 48.4 Induced Employment 66.5 9.8 21.7 31.6 Total of all Employment 337.3 49 127.2 172 686

Direct Wages $6,788,306 $1,078,458 $2,250,832 $3,418,141

Indirect Wages $3,943,681 $504,904 $1,285,479 $1,741,062

Induced Wages $1,483,343 $218,712 $484,728 $705,700

Total Wages $12,215,330 $1,802,074 $4,021,039 $5,864,903 $23,903,346

Direct Output $38,510,316 $4,285,552 $9,810,258 $14,888,437 Indirect Output $21,292,234 $2,570,532 $5,884,061 $7,635,295 Induced Output $5,148,041 $759,046 $1,682,036 $2,448,733 Total Output $64,950,591 $7,615,130 $17,376,355 $24,972,465 $114,914,541 Consequently, the Wood Products industry in Langlade County can be estimated as being responsible for a total of 686 jobs, total wages of almost $24 million and producing total output of almost $115 million.

Survey of Langlade County Wood Products Industry Operators

A survey of business operators is a key ingredient to determine future employment trends and opportunities for expansion. While there is only a small number of wood manufacturing industries in the County, gathering data from the smallest firms proved to be somewhat problematic. Pleas see Appendices for a copy of the survey results.


The employers that responded to the survey employ more than 95% of the employees in the wood manufacturing industry in Langlade County.

The wood products manufacturing sub section in Langlade County is one of only two where wage averages are above the state average.

The Survey Participants

Invitations to participate in an on-line survey were sent via e-mail to seven of the largest wood products industry operators. Brunswick Bowling Pin Co, Antigo, WI Kretz Lumber Company, Antigo, WI KB Hardwoods, Polar, WI Robbins Inc., White Lake, WI Zelazoski Wood Products Inc., Antigo, WI Gallenburg Studios, White Lake, WI Top Shelf LLC, Antigo, WI Print surveys were mailed without success to the following 5 small businesses: Fleischman's Wood Products, Antigo, WI Maas Wood Products, White Lake, WI Wetterau Wood Products Inc., Antigo, WI Wilhelm Lumber, Phlox, WI World of Wood, Antigo, WI E-mail invitations were sent up to three times (with a positive receipt confirmation) for the first seven businesses. Five of the seven businesses responded. All of the print surveys with return envelopes were delivered successfully, and yet none of the print surveys were returned, even with follow-up contacts by the local study committee. We would like to thank Michael Newton, Brunswick Bowling Pin Company; Tom Gallenberg, Gallenberg Studio, Ben Zelazoski, Zelazoski Wood Products, Inc.; John Williams, Robbins Inc., and Troy Brown, Kretz Lumber, for their participation in the survey. A complete summary of the survey can be found in the appendix of this report. The non-response from small firms represents less then 5% of the industry employment. However, we hope the non-responses from the smaller firms are not an indication of their interest in collaboration. It is going to require increased cooperation and collaboration to move the wood manufacturing industry in N.E. Wisconsin from a concentration to a true industry “cluster”. Helping these industries connect, network and understand their common needs and goals is a vital part of a successful industry cluster initiative. Collaborating on designing and supporting training for the wood products industry might be a start in that direction. There are some conclusions that can be drawn from the survey given that the responding employers account for more then 95% of the wood product manufacturing employment in Langlade County (which averages 361 employees). Actually, the responding firms indicate that they are currently employing a total of 392 full-time employees.

Langlade County Wood Products Industry Concerns

In terms of the biggest issues facing firms, workforce costs (health care, workers' comp, wages), was identified as the most important issue. (1 = Most important issue, 10 = Least important issue).


Other concerns were global competition, raw material supply and operating costs (utilities, fuel, taxes, etc.). Interestingly, the wood products manufacturing sub sector in Langlade County is one of only two where wage averages are above the state average. Langlade County workers in wood products manufacturing have an annual average wage of $32,429 (5% higher then their counterparts in the state). Generally, this is not a manufacturing sub-sector that is known for high wages. Statewide, workers in wood products manufacturing earn the third lowest among all manufacturing sub-sectors (Source: Source: 2006 Workforce Profile for Langlade County http://www.dwd.state.wi.us/oea/cp_pdf/2006/l067cpw.pdf). There is some potential for tension between local interest in increasing wages and employers interested in keeping down costs.

Raw Material Needs

In terms of the raw materials, only one firm was purchasing more then 50% of their raw materials from within 80 miles of the plant. Four of the responding five firms indicated that they purchase less then 25% of their materials within 80 miles of the plant. Two firms indicated that the local species of timber was a limiting factor while one indicated that there was not enough volume. One firm indicated the quality of the timber was an issue, while two identified cost as a limiting factor. While one might assume that it is the proximity to raw materials that attracted these firms to Antigo, it does not appear to be a major factor today. The following issues were also identified as issues impacting raw material supply:

• Finding the right lumber for a commission • Steady supply at a reasonable cost. • Restrictions on summer logging • Freight cost and lack of back-hauling opportunities • Consistency in quality and the ability to obtain longer term pricing agreements with

suppliers. • Being able to purchase materials in various stages-raw lumber to finished product on an

as-needed bases

A Need for Skilled Workers Identified

Three out of the five respondents said that skilled workers are not readily available in their geographic area. While all were familiar with the Wood Manufacturing Technology program at Fox Valley Technical College, none had hired graduates from the program. When asked to identify training needs/courses that they would like to see offered at the North Central Technical College in Antigo, at least half the respondents identified the following areas as “high need” or “moderately high need”: CNC/AutoCad/OtherComputer Applications Lean Manufacturing/Quality Production Molder Operating Maintenance Set-Up


Half of the employers indicated the potential for up to 10% growth in employment within the next twelve months.

Employers also noted: • There are skilled workers available, however the competition for those workers seems to

be greater today than it has been in the past creating the need to at times recruit outside of the local area

• We have little turnover and have been able to train in house. However, our workforce is aging and the technology requirements are increasing so we will need to replace workers and increase technology in the near future.

The current employment pattern shows a slightly higher concentration of male employees in the 45-54 age group, for Langlade County than for the state. Two identified the need for a “wood technology program” that would focus on the attributes of various wood species to determine what woods would work better in various applications. If the number of skilled workers were to increase, there is potential for some modest growth in employment (Half of the employers indicated the potential for up to 10% growth within the next 12 months), but most employers indicate that a high school degree is all that is needed for an entry level job (4 out of 5), and at first glance there does not appear to be much of a differential in pay between those with experience and those with recent training/certificate. However, a responsive local training program could provide workers that would have the ability to earn a wage slightly higher then the experienced workers. Unskilled labor rates tended to run $8 - $12 per hour, while skilled with experience workers earned $11 - $16. Newly trained/certified workers earned $10 - $20 per hour. According to reports from meetings on forest industry concerns, need for the Tech Center is viewed as being more important to the industry then managing the cost of the raw material. They also feel that there is not a large enough volume of quality hardwood available in the county forest to impact the bottom line over the long haul. The industry is stating that they need to have a steady source of technically qualified employees if they are going to modernize and compete on the global market. They also believe if they had


the Tech Center here that it would serve as a magnet for the location of new developing wood based industries and suppliers. It is also their belief that if they had the Wood Tech Center it would also foster entrepreneurial business development. Consequently, given that no graduates have been hired from the Fox Valley Technical College program, it might be more likely for employers to work with existing and prospective employees and a local program that was housed at the North Central Technical College in Antigo.

Examining the Economic Development (ED) Sustainability of Local Forest Lands

The county is heavily forested and has large amounts of public and private forestlands.

Langlade County Forest Statistics For 2004

Statistic Langlade Wisconsin Total Land Acreage 551,726 34,802,878

Total Forested Acreage 404,442 16,037,233

% of Land Forested 73 46

Total Acres of Publicly Owned Forest Land 182,980 5,087,922

Total Acres of Privately Owned Forest Land 221,462 10,949,311

Total Volume of growing stock (ft3) 533,363,355 19,666,527,013

Total Acres in County Forest Program 127,109 2,357,078

Langlade County Forest Lands are Certified as Being Managed for Sustainability

Collectively, the County Forests represent the largest public landholding (2.35 million acres in 27 counties) in the state. A cooperative management framework between DNR and the counties provides the opportunity for the County Forest group certification program. The Department of Natural Resources holds the certificate for 27 participating counties with 2.4 million acres. Individual counties are free to choose either or both Sustainable Forestry Initiative (SFI) and Forest Stewardship Council (FSC) standards. SFI and FSC are the two most widely accepted forest certification systems in North America. NSF-International Strategic Registrations and Scientific Certification Systems provided the evaluation and certification. All of Langlade County forestlands are SFI certified. The county forestlands are actively managed and a new management plan is going through the approval process. In addition, The Wisconsin Council on Forestry is moving forward to increase the accountability of sustainable forest management in Wisconsin. The Forest Sustainability Framework Project has developed a draft report outlining a comprehensive, but manageable set of indicators for monitoring Wisconsin's forest conditions and trends on a statewide scale (See: http://council.wisconsinforestry.org/framework/indexFrame.php).

Wood Growth and Removals Inventory

Growing stock and sawtimber volume and removals for the 2004 forest inventory are given in the Appendix. Data is presented for Langlade /County and for a timbershed designated as an 80 mile radius around Langlade County.


County Forest Harvest Volumes and Revenues

Langlade County Forest Land Harvests 2002 2003 2004 2005 2006 Aspen 14,811 12,609 14,419 13,171 11,493 Cull Aspen 620 1,616 1,020 121 112 Hardwood Pulp 29,416 22,358 24,906 26,679 31,847 Firewood 566 243 247 114 18 Red Oak 0 84 126 15 225 White Birch 1,242 21 38 0 584 Basswood 3,387 3,381 4,846 3,820 4,519 Basswood Bolts 613 107 350 39 9 Jack Pine 0 178 8 0 88 Red Pine 807 647 1,964 1,728 355 White Pine 56 142 5 93 0 Balsam Fir 1,960 1,414 2,349 2,284 1,899 Spruce 803 794 864 520 1,026 Hemlock 0 60 0 85 88 Cedar 50 143 0 40 0 Dead Elm 0 0 0 0 0 Tamarack 0 0 80 279 0

TOTAL CORDS 54,333 43,797 51,222 48,988 52,263 Hardwood Logs 648,230 184,610 1,079,160 1,313,030 1,342,750 (Board Feet) Pine Logs 6,600 6,380 0 93,440 0 (Board Feet) Total Value of Wood Harvested $1,365,941 $1,015,077 $1,566,063 $1,738,833 $2,030,030

Timber Sale Revenue $1,433,813 $1,101,125 $1,724,378 $1,849,569 $2,179,956

At present the County forest is considered a maturing hardwood resource not ready for cutting. The majority of the county material harvested at present is pulp. However, the dollar value of annual timber sale revenues is substantial and growing.

Considering the Feasibility of Developing a Wood Technologist Program at North Central Technical College in Antigo

At the present time, there is a program similar to the one being considered for Langlade County. This Program is called Wood Technics Manufacturing and was started in 1999 at Fox Valley Technical College (FVTC) in Oshkosh. A 2007 graduate employment research report was recently published for FVTC.

FVTC Wood Technics Graduate Information

In 2006, the average annual salary in Langlade County for a worker in the Wood Products Manufacturing sector was $32,439. The average wage in this sector in Langlade County is 30% higher than the average wage of a 2006 graduate from the Fox Valley Technical College Wood Manufacturing Technology program.


2006 Graduate Employment Data Fox Valley Technical College

Wood Manufacturing Technology Program Total Number Graduates Number Responding % Employed Employed Full Time Employed Part Time Seeking Employment Average Annual Salary Range of Annual Salary Average Hourly Rate

Class of 2006 6 Months After Graduation 13 (35)* 10 100% 7 - - 24,945 (7) * 18,720 - 30,160* 12.92 (7) *

Class of 2001 6 Months After Graduation 25* 22 100% 17 - - 27,827 (13)* 19,240 - 50,000* 12.89 (13) *

Class of 2001 5 Years After Graduation 25* 6 100% 5 - - 34,931 (5) 31,776 - 38,400 17.57 (5)

( ) = Number of graduates responding

*In 2001, the wood technics program included the residential & manufacturing wood technics programs. In 2006, there were 35 graduates from these two programs with 13 graduates from the wood manufacturing technology program. Sample of Job Positions held by 2006 Graduates Cabinet Maker, Klawes Co. Inc., Menomenee, WI Cabinet Maker, Richardson Industries Inc., Sheboygan Falls, WI Carpenter/Landscaper, Larosa Landscaping Co. Inc., Cedarburg, WI Pallet Assembler, Konz Wood Products, Appleton, WI Route Machine Operator, Richardson Industries Inc., Sheboygan Falls, WI Woodworker, Elipticon Wood Products, Little Chute, WI Source: http://www.fvtc.edu/public/academics/GradFacts.aspx?plan=31-409-3 Graduate Employment Research Report, Spring 2007

Between 2001 and 2006, there was a 29% increase in the number of graduates in the wood related programs at Fox Valley Technical College. The apparent decline in average annual salary is really a function of the fact that data in 2001 included salary data from both the residential and manufacturing programs. It could also be a function of the hours worked, as the average hourly rate reported by graduates from the combined programs in 2001 is roughly equal to the hourly rate reported by graduates of the Wood Manufacturing Technology Program in 2006. Given the higher then average industry wages in the wood manufacturing sub-sector in Langlade County, there might be a real opportunity to create a program from the ground up in Antigo that would be based on the skill needs of the local wood manufacturer employers in the region where there is a concentration of industries in this sector. It is important to note that the survey indicated that wood products manufacturing firms in Langlade County had not hired any FVTC graduates. A wood technologist program located in closer proximity to the industry concentration and based on the needs of these local employers who are paying higher then average wages for the sector, might prove to be very productive.


Interestingly, only 5.1% of the population had an associate degree in Langlade County at the time of the 2000 Census. This compares to 7.5% for Wisconsin and 6.3% for the nation. The surrounding counties of Lincoln, Marathon, Oconto, and Oneida County all had higher rates.

Comparison of the NCTC District Boundary to the Wood Product Manufacturing (NAICS 321) Concentration Region (Location Quotient exceeding 10 indicated in dark red)

All of the counties in the NCTC District can be considered to be highly successful Wood Products Industry locations. Employers in the Antigo region have indicated in the survey that they would pay approximately $15 per hour for a worker starting with a degree or certificate in this area ($31,200). That is close to the average wage for this sub-sector in Langlade County ($32,439), and 25% higher then the average wage being earned by 2006 graduates from this program in the Fox Valley ($24,945). It is important to note that there may be something unusual about the years selected for this analysis (either in the industry or at the Fox Valley Technical College).

Potential Demand for a Wood Products Technology Degree in Langlade County

In terms of post graduation plans, 26% of the 2005-2006 Antigo High School class indicated plans to attend a technical college. That is only slightly higher then the states average (21.7%), and significantly lower then some of the surrounding High Schools (Merrill 38.4%, Elcho 42.9%, Wittenberg 30.3%).


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Antigo Wisconsin Merrill Elcho Wittenberg

Postgraduation Plans (2005-2006)

% Misc.% Job Training% Military% Emp.% Voc/Tech College% 4-Year College

Perhaps more importantly, the % of Antigo students planning to attend Technical College is in a downward trend vs. stable to increasing for the State. One would think that an investment in the technical school in a program that would increase employability might reverse this trend? Year Antigo Wisconsin Merrill Elcho Wittenberg Tomahawk1996-97 32.1 21.5 31.2 26.7 12.3 30.61997-98 31.3 21.9 25.2 24.1 15.9 38.51998-99 36.9 20.7 29.6 32 19.8 221999-00 36.1 20.3 24.3 33.3 46.2 38.92000-01 26.5 21.3 21.7 15.6 20.4 24.52001-02 29.6 21.6 30.2 26.3 24.5 30.92002-03 30.3 22.1 19.9 21.2 40 40.22003-04 30.8 23.1 30.4 20 47.1 --2004-05 28.3 23.1 23.4 23.5 30.7 26.12005-06 25.9 21.7 38.4 42.9 30.3 73.3*

**The authors feel that this is an error in reporting. We believe that the number reported for Tomahawk in 2005-20006 includes the students planning on attending a 4-year college.


Potential Laborforce Demand for a Wood Products Technology Degree

All of the people currently working in Langlade County do not live there. Twelve percent of the workers come from the counties adjacent to Langlade County. 2000 County-to-County Worker Flows for Langlade County

These commuters have travel times ranging from less than five minutes to over 90 minutes.

NCTC Enrollment Pattern

Within the counties in this Langlade County laborshed, there are 125 wood product manufacturing establishments, employing 8,733 workers with an annual payroll of $270,838,000. (Tables are in Appendix) This workforce is a very large potential market for Wood Technology training. Similarly, total enrollment for NCTC comes from more than just areas with the district boundaries. This is important because population estimates for 2007 show that within NCTC population is growing at a slower rate (4.6%) than the State (5.3%) since 2000.


Estimating the Economic Impact of a Wood Technologist Program

It’s a statement heard often at economic development conferences: “The government doesn’t create economic development activity…..the private sector does!” The fact of the matter however, is that public policies and investments certainly influence the level of economic development activity. Based on a recent legislative audit, we know that the State of Wisconsin has spent $152.8 million on economic development programs for the period of 2003-2005. Local units of government (Counties, Cities, Villages, and Towns) spent $701.2 million during the 2003-2004-time period). The report however, provides no indication as to whether or not this level of spending is going up or down.

County and Municipal Economic Development Expenditures

When it comes to County government, most of our Counties in Wisconsin make investments in not-for-profit economic development corporations focused on economic development activities (at either the County level or regional level). Others make economic development investments within County Departments. Recent expenditure reports from Counties indicate that County government in Wisconsin is spending on average, about $10 per capita on economic development activities. In 2004, these public investments ranged from a high of $31.80 per capita in Rusk County to a dime or less per capita in Buffalo, Manitowoc, Vernon, and Menominee Counties. Langlade County spends considerably less ($1.67 per capita) on economic development activities then the other counties within the wood products industry concentration in Wisconsin. And while County spending on economic development activities increased in this area by 92% between 2001 and 2004, spending in Langlade County went down 31% during this same time frame. It should be noted that there is some flexibility in how County expenditures are reported, and thus the amounts reported on the expenditure reports by Counties may not be comparing similar investments.

$17.82$1.61

$9.10$3.60

$25.10$1.67

$1.07$0.00

$5.27$31.77

$7.17$1.82

$25.97$11.60

$9.76

$0.00 $5.00 $10.00 $15.00 $20.00 $25.00 $30.00 $35.00

Ashland CountyClark County

Florence CountyForest County

Iron CountyLanglade County

Lincoln CountyMenominee County

Price CountyRusk County

Sawyer CountyShawano County

Taylor CountyWashburn County

Wisconsin Total

Per Capita County Economic Development Expenditures (2004)

Taylor County is not included in the second graph because expenditures in that county went up over 600% and threw off the scale.


Langlade County and Antigo spend considerably less on economic development activities then the other counties and major cities within the Wood Products industry concentration in Wisconsin.

-$0.07

-$0.03

$0.27

$1.03

$0.81

-$0.31

-$0.31

-$0.08

$0.00

-$0.21

$1.01

$0.03

-$0.33

$0.10

$0.92

-40.0% -20.0% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0%

Ashland County

Clark County

Florence County

Forest County

Iron County

Langlade County

Lincoln County

Marathon County

Menominee County

Price County

Rusk County

Sawyer County

Shawano County

Washburn County

Wisconsin Total

% Change in Economic Development Expenditures (2001-2004)

At the municipal ED expenditures level, Antigo is compared to similar-sized cities in other wood product-dependent counties. Antigo's expenditures are considerably less than most other comparison communities. 2004 Municipal and County Finance Forms: Expenditures / As Audited through end of 15 December 2005 Municipal finance report line: 128-56700 2004 2004 2004 2004 Cnsv & Devel: Capital Outlay: Capital Outlay: 2004 ID Final Economic Urban Economic 2004 Per Capita Code Locality Population Development Development Development Total Expenditures 34201 Antigo 8,586 $234,608 $0 $0 $234,608 $27 43276 Rhinelander 8,041 $18,000 $0 $305 $18,305 $2 35286 Tomahawk 3,789 $667,011 $0 $0 $667,011 $176 35251 Merrill 10,144 $38,955 $0 $0 $38,955 $4 54246 Ladysmith 3,760 $136,626 $121,801 $939,360 $1,197,787 $319 65281 Spooner 2,705 $2,451 $0 $225,442 $227,893 $84 2201 Ashland 8,577 $569,440 $0 $33,628 $603,068 $70

A Wood Technologist Program is Feasible

The local estimate for constructing and equipping a building to house a Wood Technologist Program at NCTC is approximately $1 million.


The present worth of the increased property taxes thereby generated by the wage growth would equal $1,668,472.

The Property Tax Growth From a Modest Industry Employment Increase

Local property tax revenues can be expected to grow if there is a reasonable amount of employment and income growth in the county. Using the previous IMPLAN estimates, the total employment impact of the Wood Products industry in Langlade County (including the multiplier effect), was 686. If this were to increase by 10%, the employment would total 754. Similarly, the total wage impact was $23,903,346. Increased by 10% to account for an increase in employment, the total would be $26,293,681. Is this significant? A Wood Technologist Program at NCTC could help ensure the economic sustainability of the Wood Products Industry in Langlade County by fostering the availability of skilled labor. With labor availability, manufacturers could continue to grow and prosper. Increased capital investment would support a 10% increase in employment. This assumption is reasonable given the industry survey results. With employment increased by 10%, wages from this employment would also increase by that amount. Increased employment and increased wages would result in increased property taxes. In Wisconsin, property taxes were estimated to consume 4.4% of personal income in 2005, by the Wisconsin Taxpayers Alliance. This would amount to an additional $105,175 in property taxes in the first year of the increase. Over the long term, this stream of revenue has a significant present worth. That is, present worth analysis requires the conversion of all cash flows to a common point in time - the present. As such, it requires the consideration of time value of money and all future cash flows are discounted back to the present. Comparison of the equivalent worth of competing alternatives will allow us to choose the most desirable alternative on the basis of economics. To calculate present worth, a number of assumptions are required: - Wages and property taxes are impacted by inflation, assumed to be 3.5% per year - The property tax income stream is calculated over 20 years (Twenty years is often considered the minimum time frame for life cycle costing of public capital asset investments.) Choosing an appropriate discount rate is critical to the result and a matter of debate in calculating for social investments. Here, we use 7%. This is a rate first mentioned by an Office of Management & Budget (OMB) Circular and is based on the before-tax rate of return to corporate investment, giving reasonable preference to future generations, and assuming a modest amount of economic risk. Taking the extra annual property taxes for Langlade County, $105,175, increasing them annually by 3.5% to account for inflation and looking over a 20 year time horizon, the resultant stream of revenue is then discounted back to the present using a 7% discount rate. This produces a present value of the revenue stream of $1,668,472. That is, $1,668,472 would be needed today to generate the revenue stream, given the assumptions listed. In addition to the growth generated in Langlade County, growth can also be expected to occur in surrounding counties, because of worker commuting patterns and the possibility of trained workers being hired in the Wood Products-dependent counties adjacent to NCTC. That is, the present worth would be substantially larger in a regional context. According to the OMB, benefit-cost analysis is recommended as the technique to use in a formal economic analysis of government programs or projects. The standard criterion for deciding


whether a government program can be justified on economic principles is net present value -- the discounted monetized value of expected net benefits (i.e., benefits minus costs). Net present value is computed by assigning monetary values to benefits and costs, discounting future benefits and costs using an appropriate discount rate, and subtracting the sum total of discounted costs from the sum total of discounted benefits. Discounting benefits and costs transforms gains and losses occurring in different time periods to a common unit of measurement. Programs with positive net present value increase social resources and are generally preferred. Programs with negative net present value should generally be avoided. Here, even though continuing operating costs are not taken into consideration, the present net worth of the property tax increase is substantially larger than the capital investment in the facility. Based on these assumptions, the investment in a Wood Technologist facility at NCTC appears to provide a substantial return to Langlade County and its residents.


Appendices

How the Multiplier is Calculated

To calculate the Employment Multiplier for: Sawmill Industry

337.3 (total employment)/140.0 (direct employment) = 2.41 (employment multiplier) Veneer & Plywood Manufacturing

49 (total employment)/23 (direct employment) =2.13 (employment multiplier) Cut Stock—Resawing Lumber

127.2 (total employment)/70.0 (direct employment) =1.82 (employment multiplier) Other Millwork—Including Flooring

172 (total employment)/92 (direct employment) = 1.87 (employment multiplier) To calculate the personal income multiplier for: Sawmill Industry

$12.22 (direct + indirect & induced wages)/$6.79 million (direct wages)= 1.80 (personal income multiplier)

Veneer & Plywood Manufacturing $1.80 (direct + indirect & induced wages)/$1.08 million (direct wages) = 1.67 (personal

income multiplier) Cut Stock—Resawing Lumber

$4.02 (direct + indirect & induced wages)/$2.25 million (direct wages) = 1.79 (personal income multiplier)

Other Millwork—Including Flooring $5.86 (direct + indirect & induced wages)/$3.42 million (direct wages) = 1.72

(personal income multiplier) To calculate the economic multiplier for: Sawmill Industry

$64.95 million (total output)/$38.51 million (direct output) = 1.69 (economic multiplier) Veneer & Plywood Manufacturing

$7.62 million (total output)/$4.29 million (direct output) = 1.78 (economic multiplier) Cut Stock—Resawing Lumber

$17.38 million (total output)/$9.81 million (direct output) =1.77 (economic multiplier) Other Millwork—Including Flooring

$24.97 million (total output)/$14.89 million (direct output) =1.68 (economic multiplier)


2004 Timber Inventory Growth & Removals Estimates for Langlade County and 80 mile Radius Timbershed

2004 Forest Inventory for Langlade County

GS Volume GS Removals Sawtimber Volume Species Cubic feet SE (%) Species Cubic feet SE (%) Species Board feet SE (%)

balsam fir 16,947,907 37% balsam fir 167,675 333% balsam fir 17,508,247 89%black spruce 7,295,826 57% tamarack (native) 16,238,523 93%eastern hemlock 10,897,540 47% eastern hemlock 229,682 285% white spruce 29,529,368 69%eastern white pine 10,516,078 48% black spruce 4,095,861 184%jack pine 98,193 492% red pine 28,664,416 70%northern white-cedar 30,601,679 28% eastern white pine 52,571,363 51%red pine 8,940,876 52% Scotch pine 8,851,815 125%

Scotch pine 1,788,326 115% northern white-cedar 80,157,047 42%

tamarack (native) 9,577,786 50% eastern hemlock 48,176,902 54%white spruce 6,889,418 59% white spruce 256,348 270% red maple 97,013,468 38%red maple 48,303,675 22% red maple 1,604,257 108% sugar maple 443,227,397 18%sugar maple 174,717,809 12% sugar maple 6,971,263 52% yellow birch 25,024,295 75%yellow birch 10,444,962 48% yellow birch 421,274 210% paper birch 20,731,769 82%paper birch 15,059,157 40% American beech 2,426,772 239%bitternut hickory 161,817 383% white ash 42,759,579 57%American beech 928,178 160% black ash 4,997,351 167%white ash 14,551,045 40% green ash 3,718,739 193%black ash 8,472,608 53% black ash 173,866 327% balsam poplar 1,794,419 278%

green ash 1,714,921 118% eastern cottonwood 1,470,612 307%

balsam poplar 678,697 187% bigtooth aspen 32,176,379 66%eastern cottonwood 376,370 251% quaking aspen 66,730,838 46%bigtooth aspen 10,265,395 48% black cherry 13,853,422 100%quaking aspen 54,696,782 21% quaking aspen 900,163 144% northern red oak 78,731,043 42%

black cherry 9,414,539 50% American basswood 220,214,639 25%

bur oak 70,569 580% American elm 1,091,720 357%northern red oak 16,388,258 38% northern red oak 169,952 331% Total 1,341,755,982 10%American basswood 74,864,529 18% American elm 2,666,454 94% rock elm 33,001 849% Total 547,362,395 7% Total 10,894,480 41%


2004 Forest Inventory for an Eighty Mile Radius Around Langlade County

GS Volume GS Removals Species Cubic feet SE (%) Species cubic feet SE (%)

balsam fir 213,615,495 11% balsam fir 1,148,165 127%black spruce 112,255,983 15% Douglas-fir 110,471 464% eastern hemlock 305,305,688 9% eastern hemlock 4,679,356 63%eastern redcedar 1,153,894 144% eastern white pine 640,793,031 6% eastern white pine 13,527,433 37%jack pine 85,257,791 17% jack pine 3,039,945 78%larch (introduced) 753,628 178% northern white-cedar 394,058,746 8% northern white-cedar 228,519 286%Norway spruce 5,870,729 64% red pine 769,913,790 6% red pine 7,068,860 51%Scotch pine 9,734,978 49% tamarack (native) 157,264,112 12% tamarack (native) 3,471,682 73%white fir 138,741 414% white spruce 134,834,140 13% white spruce 1,312,651 119%boxelder 2,518,584 97% red maple 995,662,540 5% red maple 14,790,513 36%silver maple 78,496,193 17% sugar maple 1,267,423,083 4% sugar maple 18,744,289 32%yellow birch 142,171,005 13% yellow birch 1,570,116 109%river birch 434,968 234% paper birch 264,178,023 9% paper birch 8,445,598 47%bitternut hickory 24,727,099 31% bitternut hickory 679,040 166%shagbark hickory 4,877,859 70% shagbark hickory 126,253 384%hackberry 336,548 266% American beech 18,575,793 36% American beech 236,644 281%white ash 171,396,456 12% white ash 2,194,368 92%black ash 184,316,689 11% black ash 1,962,833 97%green ash 111,768,033 15% green ash 1,986,130 97%butternut 3,467,206 83% black walnut 296,764 283% balsam poplar 29,160,983 29% balsam poplar 406,201 214%eastern cottonwood 13,088,797 43% bigtooth aspen 241,236,800 10% bigtooth aspen 8,279,183 47%quaking aspen 816,046,327 5% quaking aspen 26,538,893 27%black cherry 60,736,016 20% white oak 76,748,072 18% white oak 2,485,745 87%swamp white oak 8,070,924 54% northern pin oak 148,964,091 13% northern pin oak 234,084 282%bur oak 30,277,983 28% bur oak 109,332 413%northern red oak 448,545,166 7% northern red oak 3,154,629 77%black oak 70,163,201 18% black locust 3,220,066 86% black locust 119,796 395%black willow 2,114,820 106% American basswood 480,681,172 7% American basswood 5,485,689 58%American elm 63,502,927 19% American elm 1,275,055 121%Siberian elm 562,422 206% slippery elm 2,956,311 90% slippery elm 157,923 344%rock elm 2,402,315 99% Total 8,600,186,450 2% Total 133,458,925 12%Source: USFS Inventory Model


2004 Forest Inventory for an Eighty Mile Radius Around Langlade County Sawtimber Volume Sawtimber Removals

Species Board feet SE (%) Species Board feet SE (%) balsam fir 281,081,159 22% balsam fir 1,990,734 215% eastern redcedar 1,449,185 310% larch (introduced) 684,791 451% tamarack (native) 303,893,384 21% tamarack (native) 2,067,220 211% Norway spruce 15,255,282 95% white spruce 512,991,273 16% white spruce 6,520,212 119% black spruce 120,645,829 34% jack pine 230,928,083 25% jack pine 7,839,622 108% red pine 3,162,725,150 7% red pine 9,379,345 99% eastern white pine 3,169,049,685 7% eastern white pine 76,611,524 35% Scotch pine 38,234,891 60% northern white-cedar 1,046,394,648 12% eastern hemlock 1,429,727,987 10% eastern hemlock 22,034,640 65% red maple 1,864,460,463 9% red maple 30,874,502 55% silver maple 300,666,115 22% sugar maple 3,103,504,890 7% sugar maple 61,064,027 39% yellow birch 344,798,515 20% yellow birch 5,725,638 127% paper birch 290,359,783 22% paper birch 12,153,680 87% bitternut hickory 53,452,854 51% bitternut hickory 2,099,339 209% shagbark hickory 8,142,477 131% American beech 60,886,767 48% American beech 1,269,925 269% white ash 531,233,389 16% white ash 8,639,972 103% black ash 184,733,277 27% black ash 2,599,283 188% green ash 215,703,530 25% green ash 5,917,257 125% butternut 7,660,172 135% balsam poplar 67,647,037 45% balsam poplar 893,412 321% eastern cottonwood 57,736,472 49% bigtooth aspen 675,136,830 14% bigtooth aspen 32,160,537 54% quaking aspen 1,364,374,366 10% quaking aspen 63,035,239 38% black cherry 81,524,693 41% white oak 253,288,575 23% white oak 6,236,976 121% swamp white oak 26,914,288 72% northern pin oak 405,248,631 19% bur oak 108,226,059 36% bur oak 460,386 447% northern red oak 1,716,878,753 9% northern red oak 13,981,586 81% black oak 194,868,085 27% black willow 6,023,716 152% American basswood 1,403,313,594 10% American basswood 13,217,889 83% American elm 63,778,218 47% American elm 3,816,595 155% slippery elm 7,154,797 139% rock elm 814,444 413% Total 23,711,592,137 2% Total 390,589,542 15% Source: USFS Inventory Model


Langlade County Wood Product Industry Laborshed Tables

Area: Langlade Laborshed Industry: NAICS 321 Wood product manufacturing Type: Number of Establishments

Year Forest Langlade Lincoln Marathon Oconto Oneida Portage Shawno Wood Total 2001 11 9 13 32 12 9 11 17 11 125 2002 12 9 14 35 13 8 10 17 12 130 2003 11 9 14 34 13 7 10 18 12 128 2004 12 14 33 14 6 10 18 12 127 2005 11 7 14 34 14 6 10 16 13 125

Type: All Employees

Year Forest Langlade Lincoln Marathon Oconto Oneida Portage Shawno Wood Total 2001 310 391 1,281 4,238 312 149 345 626 1,882 9,534 2002 285 385 1,199 4,318 329 135 193 618 1,829 9,291 2003 269 362 1,174 4,280 313 121 149 650 1,681 8,999 2004 285 364 1,160 4,332 311 115 149 703 1,617 9,036 2005 268 361 1,114 4,261 306 114 166 726 1,417 8,733

Type: Total Wages (in thousands) Year Forest Langlade Lincoln Marathon Oconto Oneida Portage Shawno Wood Total 2001 $6,412 $10,183 $33,801 $121,242 $7,272 $3,983 $8,392 $15,302 $55,564 $262,151 2002 $6,675 $10,298 $32,551 $122,194 $8,156 $3,668 $4,543 $15,153 $56,060 $259,298 2003 $6,548 $10,446 $33,141 $131,355 $7,853 $3,281 $3,575 $16,553 $52,671 $265,423 2004 $7,406 $11,691 $34,232 $134,713 $7,799 $3,435 $3,682 $18,538 $54,478 $275,974 2005 $6,513 $11,707 $33,864 $131,724 $8,034 $3,389 $3,959 $19,821 $51,827 $270,838

Type: Average Weekly Wage Year Forest Langlade Lincoln Marathon Oconto Oneida Portage Shawno Wood 2001 $398 $501 $508 $550 $448 $513 $468 $470 $568 2002 $451 $515 $522 $544 $477 $523 $453 $471 $590 2003 $469 $555 $543 $590 $482 $521 $460 $490 $603 2004 $500 $618 $568 $598 $482 $572 $475 $507 $648 2005 $468 $624 $584 $595 $504 $572 $459 $525 $703

Type: Average Annual Pay

Year Forest Langlade Lincoln Marathon Oconto Oneida Portage Shawno Wood 2001 $20,683 $26,037 $26,397 $28,611 $23,281 $26,657 $24,360 $24,445 $29,517 2002 $23,463 $26,777 $27,143 $28,299 $24,797 $27,205 $23,558 $24,513 $30,659 2003 $24,379 $28,857 $28,225 $30,689 $25,083 $27,112 $23,927 $25,466 $31,343 2004 $26,024 $32,117 $29,519 $31,100 $25,084 $29,759 $24,687 $26,385 $33,682 2005 $24,339 $32,429 $30,387 $30,917 $26,232 $29,750 $23,864 $27,302 $36,571

Source: BLS Quarterly Census of Employment and Wages


Present Net Worth Calculations

Equivalent present worth analysis requires the conversion of all cash flows to a common point in time, the present. As such, it requires the consideration of time value of money. Comparison of the equivalent worth of competing alternatives allows us to choose the most desirable alternative on the basis of economics. This is the essence of all present worth economic analysis techniques and its variants. The net present worth (NPW) or net present value (NPV) is the difference between the present worth of all cash inflows and outflows of a project. Net present value is used in capital budgeting to analyze the profitability of an investment or project. To find the NPW of a project an interest rate is needed to discount future cash flows. The most appropriate value to use for this interest rate is the rate of return that one can obtain from investing the money somewhere. Alternatively, it can also be the rate that you will be charged if you had to borrow the money. The selection of this rate is a policy decision. Formula:

NPV compares the value of a dollar today versus the value of that same dollar in the future, after taking inflation and return into account. If the NPV of a prospective public project is positive, then it generally should be accepted. However, if it is negative, then the project probably should be rejected because cash flows are negative and it cost more than it returns.

Date: 10/11/2007 10:42 AM PST Responses: Completes Filter: No filter applied

Forest Industry Survey Final Results Overview

The Wisconsin Economic Development Institute (WEDI) and the the Center for Community and Economic Development (University of Wisconsin Extension) are assisting Langlade County with a study of the Wood Products Industry for the purpose of: - Defining the economic importance of the Langlade County Forest Products Sector - Examining the sustainability of the sector for economic development - Analyzing the feasibility of developing a Wood Technologist Program at North Central Technical College in Antigo As a forest products industry operator, your responses to the following short survey will be invaluable to our analysis. We thank you for taking the time to assist with this effort. Your individual responses will remain confidential.

2. What are the biggest issues that face your company today? Please rank each of the following ten issues (1 = Most important issue, 10 = Least important issue)

Top number is the count of respondents selecting the option. Bottom % is percent of the total respondents selecting the option.

1 2 3 4 5 6 7 8 9 10

Raw Material Supply

1 25%

0 0%

125%

00%

00%

00%

00%

1 25%

125%

00%

Raw Material Cost

0 0%

0 0%

125%

125%

125%

00%

125%

0 0%

00%

00%

Workforce Availability

0 0%

0 0%

00%

133%

00%

00%

133%

0 0%

133%

00%

Workforce with Appropriate Skills

0 0%

1 33%

00%

00%

00%

133%

00%

1 33%

00%

00%

Regulations 0 0%

1 25%

00%

125%

00%

125%

00%

0 0%

00%

125%

Competition - Domestic

1 25%

0 0%

00%

125%

00%

00%

125%

1 25%

00%

00%

Competition - Global

1 25%

0 0%

125%

00%

125%

00%

125%

0 0%

00%

00%

Transportation of Goods

0 0%

0 0%

125%

00%

00%

125%

00%

0 0%

00%

250%

Operating Costs (utilities, fuel, taxes, etc)

0 0%

0 0%

120%

00%

240%

00%

00%

1 20%

120%

00%

Workforce Costs (health care, workers' comp, wages)

2 40%

2 40%

00%

00%

120%

00%

00%

0 0%

00%

00%

6. What percentage of your raw materials are purchased within 80 miles of your plant

0 0%

Page 1 of 5Zoomerang | Forest Industry Survey Final: Results Overview

10/11/2007http://www.zoomerang.com/web/reports/PrintResultsPage.aspx

0%

0 - 25% 4 80%

25 - 50% 0 0%

50 - 75% 1 20%

75 - 100% 0 0%

Total 5 100%

7. What issues get in the way of purchasing more raw products from within the immediate area? (Check all that apply)

Not the right species 3 60%

Not enough volume 2 40%

Quality of timber 1 20%

Cost of timber 2 40%

Bidding Requirements 0 0%

Other, please specify 0 0%

9. Are skilled workers readily available in your geographic area?

Yes 2 40%

No 3 60%

Total 5 100%

4 Responses

10. Are you familiar with the Wood Manufacturing Technology program at Fox Valley Technical college?

Yes 5 100%

No 0 0%

Total 5 100%

1 Responses

11.Have you previously hired graduates from the Wood Manufacturing Technology program at the Fox Valley Technical college?

Yes 0 0%

No 5 100%

Total 5 100%

0 Responses



12.Training: What are your training needs/courses you would like to see offered at the North Central Technical College in Antigo? (Check all that apply)

Top number is the count of respondents selecting the option. Bottom % is percent of the total respondents selecting the option.

Low Need Moderately Low Need Moderately High Need High Need N/A

Safety 0 0%

250%

250%

0 0%

00%

First Aid/CPR 0 0%

375%

125%

0 0%

00%

CNC/AutoCad/Other Computer Applications (Please be specific...i.e. what kinds of "other computer applications training"?)

0 0%

125%

125%

2 50%

00%

Financial/Bookkeeping 1 25%

250%

125%

0 0%

00%

Lean Manufacturing/Quality Production

0 0%

125%

250%

1 25%

00%

Molder Operating 0 0%

125%

125%

2 50%

00%

Planer Operating 1 25%

125%

125%

1 25%

00%

Cabinetmaking 1 25%

250%

125%

0 0%

00%

Maintenance 0 0%

125%

125%

2 50%

00%

Set-Up 0 0%

00%

250%

2 50%

00%

None 1 100%

00%

00%

0 0%

00%

13. Is there a need for any other specific training programs that could be provided by the North Central Technical College in Antigo or do you have any comments regarding the training topics listed above?

Yes 3 60%

No 2 40%

Total 5 100%

2 Responses

16. Does production pay scale vary by type of machinery used?

Yes 2 50%

No 2 50%

Total 4 100%

0 Responses



17. Based on your current needs, what is the minimum education typically required for the first hire?

Grade School 0 0%

HIgh School/GED 4 80%

Technical College 1 20%

College 0 0%

Other Training 0 0%

Total 5 100%

18. If you were able to find workers with the skills you need, how would it impact your employment levels?

We would still be in a downsize mode 1 20%

It would have no impact on our employment numbers

1 20%

We could increase employment 1-10% 3 60%





We could increase employment by more then 50%

0 0%


Total 5 100%

19. Has demand for your product(s) changed in the past ten years?

Yes 5 100%

No 0 0%

Total 5 100%

5 Responses

21. Do you have plans to expand or downsize within the next 12 months (employment)?

Downsize by more 0 0%



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then 20%

Downsize 11-20% 1 25%

Downsize 1-10% 0 0%

Expand 1-10% 2 50%

Expand 11-20% 0 0%

Expand by 20% 0 0%


Total 4 100%



Open Ended Question Responses

1. Please provide us with the following contact information. Your results will remain confidential, but we would like to share the final tabulated results with you after the survey is completed.

# Response

1 Michael Newton, Brunswick Bowling Pin Company, 1529 Rolling Hills Road, , Antigo, WI, 54409

2 Tom Gallenberg, Gallenberg Studio, N4055 Red Pine Drive, , White Lake, WI, 54491

3 Ben Zelazoski, Zelazoski Wood Products, Inc., P O Box 506, 835 Ninth Avenue, Antigo, WI, 54409

4 Troy Brown, Kretz Lumber, W11143 Hwy G, PO Box 160, , , Antigo, WI, WI

5 John Williams, Robbins, Inc., 714 Bissell Street, , White Lake, WI, 54491

3. Are there other issues besides those listed above that are significant for your operation?

# Response

1 Highly skilled craftsman are very hard to find

2 No

3 Overcapacity within the industry

4. Raw Materials: What issues do you have in regard to raw material supply?

# Response

1 Finding the right lumber for a commission

2 Steady supply at a reasonable cost.

3 Restrictions on Summer Logging

4 Consistency in quality and the ability to obtain longer term pricing agreements with suppliers. Being able to purchace materials in various stages from - raw lumber to finished product on an as needed basis.

5. What volume of raw materials do you buy annually (please report by board feet or cords)?

# Response

1 Hardwoods (boardfeet) 2000

2

Softwoods (boardfeet) 1,000 Hardwoods (boardfeet) 1,000,000

3

Hardwoods (cords) 3500 Hardwoods (boardfeet) 15000000

4 Hardwoods (boardfeet) 13 - 16 million BF

8. What issues, if any, do you have regarding raw material delivery?

# Response

1 I hand pick my own

2 Freight Cost and lack of back-hauling opportunities

3 Consistency - delivery can be dependent on seasonal weather and market conditions making product less available at some times than others creating the need to build higher inventories than desirable than if there was a uniform flow throughout the year.

9. Are skilled workers readily available in your geographic area?

# Response

1 Highly skilled

2 We have little turnover and have been able to train in house. However, our workforce is aging and the technology requirements are increasing so we will need to replace workers and increase technology in the near future.

3 Not for our particular requirements in the Dimension Plant

4 There are skilled workers available, however the competition for those workers seems to be greater today than it has been in the past creating the need to at times recruit outside of the local area.

10. Are you familiar with the Wood Manufacturing Technology program at Fox Valley Technical college?

# Response

1 Somewhat

13. Is there a need for any other specific training programs that could be provided by the North Central Technical College in Antigo or do you have any comments regarding the training topics listed above?

# Response

1 programs on the physics and attributes of the better hardwood species

2 Wood technology. That is, the different characteristics of various wood species to determine what woods would work better in various applications.

14. What are your pay ranges for unskilled labor vs. workers with a technical college degree or certification? Please respond with a high and low range expressed in dollars per hour for the following three labor categories (Example: $12 - $16 per hour)

# Response

1

[Unskilled] 11-12 [Skilled with Experience] 14-16

2

[Unskilled] $8 - $10 per hour [Skilled with Experience] $11 - $14 per hour [Newly Trained/Certified] $10 - $15

3

[Unskilled] $12 [Skilled with Experience] $13 - $15 [Newly Trained/Certified] $15 - $16

4

[Unskilled] $10 - $12 [Skilled with Experience] $12 - $16 [Newly Trained/Certified] $15 - $20

15. How many years of experience are typically required for the first major pay raise?

# Response

1 Moderate raises given as person gains knowledge.

2 N.A.

3 1 year

19. Has demand for your product(s) changed in the past ten years?

# Response

1 yearly less and less

2 I build high end commission peices and finding the right clients has improved bookings

3 Demand has lowered as customers go off shore.

4 Finished and Dimension Products are more in demand than 10 years ago

5 There is a continuing need to provide a broader range of products in a shorter period of time. Customer expectations today are to have the product available to ship to them almost immediately.

20. What have you done to stay competitive?

# Response

1 pray looked at cost reductions but unable to get funding due to volume

2 spent a significant portion of revenus on all aspects of advertising

3 We have opened up our line of products, concentrating more on lower volume, higher margin parts that the overseas market either can not or does not want to manufacture.

4 Service Customers and listen to their needs. We have made numerous equipment upgrades for efficiency, also.

5 We have continued to change and upgrade product lines. Educate and train employees in the area of Lean Manufacturing. Provide products that can be marketed and sold on value as well as price.

22. Do you have any other plans for expanding or downsizing in areas other then employment?

# Response

1 no plans at this time

2 Our business model has a growth component of 8% revenue growth.

3 We have additional product lines that we will be adding.

23. How many people do you currently employ?

# Response

1

Full-time 56 Part-time 0

2 Full-time none

3


4


5

Full-time 110 - 125 Part-time up to 15 - mostly during the summer months

24. How many people did you employ 4 to 5 years ago?

# Response

1


2 Full-time one

3 Full-time 35

4


5

Full-time 100 - 110 Part-time up to about 5

25. What approximately is your current operating capacity?

# Response

1 40%

2 50%

26. What would help your company to improve its marketplace share?

# Response

1 exposer

2 Consumers demanding better rather than cheaper products.

3 o offer wood products to the market place that the competition does not want to do, or can not do.

27. What assistance could Langlade County and the communities provide to maintain and/or expand your business?

# Response

1 create a reason for higher income tourists to visit here.

2 Technical Training that is Forest Products specific

3 Low interest loans & tax incentives when expansions are being considered. Some solution to the ever increasing cost of Medical insurance - possibly through a number of companies getting together to obtain better group rates.

Feasibility Analysis: Creation of a Wood Technology · Feasibility Analysis: Creation of a Wood Technology Program at North Central Wisconsin Technical College October 18, 2007 …

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