Seize the Opportunity
BRUER'S CONTRACT CUTTING DALLAS, OREGON
Keeping perspective and plotting the right course in the midst of change frequently is the difference between surviving, and thriving, in the business world, which particularly holds true in the logging industry. Long before the economy “cratered” in 2008, our industry’s been in a tumultuous and ongoing transformation and redefinition changing from a complete shift in the management of public forestlands, much tighter rules and regulations on private lands, to maintain the public license to log over the past 30+ years.
Those who remain in this business are well aware of that, and continue to navigate those still troubled waters, always vigilant with an eye on the future.
Mike Bruer, owner of Bruer’s Contract Cutting has always taken an aggressive perspective and approach to logging, and over the past 27 years, has assembled a well expearienced, similarly focused crew that shares that vision. It’s an attitude that’s permeated Bruer’s thinking, which he’s shared with a number of other contract loggers over those decades, which he’s maintained since his early days in business.
The early days
Bruer started as a timber faller in 1976, he explained saying, “... I only cut for six months before starting my own outfit. I’m not sure what possessed me to do that.” He then smiled and added, “I think I might have just done it just to prove somebody wrong. I was going to work harder than the average man then I should get paid for it.”
With some more experience beneath his belt, in February 1, 1980 Bruer Contract Cutting came into being. He had as many as 10 crews, with as many as forty cutters. Priding himself even then as a “new idea sorta person,” he started exploring mechanical cutting systems in 1988.
Phases of business
“The change that was coming in tree size, and workman’s comp issues,” were looming on the horizon. “And bunchers were a new thing out here,” Bruer said. “A few logging contractors had their own (feller bunchers) but no one (approached mechanical cutting as a contracting business for other loggers). They were loggers cutting.”
Bruer saw opportunity. “In June 1989 we bought our first buncher, then in July of ‘89 bought our second buncher, and it went crazy from there.”
His approach to business then and now stems from what he calls “seizing the opportunity,” by being prepared for the broadest base of business available. Bruer explained, “I’m a mathematical thinker. If you’re a hand cutting contractor and you have four cutters for every 1,000 jobs, there are only 100 jobs you can do, so you only have a shot at 10 percent of the market share. When you have a lot of cutters you have the ability to start sooner, (whereas) the smaller (contractor) crews eliminated from the picture because of the dynamics.
“Similarly if you have several bunchers you can do more jobs. Why eliminate yourself from so much of the opportunity by not having the preparation? It’s the way I always approached it.”
Similarly in 1995 Bruer entered cut-to-length (CTL) harvesting systems aggressively buying three Timberjack 2320 forwarders, and 1270 harvester systems, “...with three TD9 Caterpillars to go with it,” The crawlers were used both for road work and some fire season stuff as well.”
They continued with CTL systems on a big scale for a decade, but as profitability declined, they adjusted to two, then a single side. They finally sold the last of the systems this past year.
“We went to cable thinning for a couple reasons,” Bruer explained noting: “The clear cut loggers didn’t want to thin thus there was less competition.”
“In ‘96 we bought our first new 210 Diamond yarder, and began cable yarder thinning,” Bruer explained. But their approach was slightly different for the time. “We’d CTL and process in the brush, and do 10-log rather than three-log turns with harvester bunching,” boosting production in what he called “combination units,” when they could.
From their start in cable yarding Bruer explained, “... we’ve always tried to hire the best people we could find to do the cable work,” admitting, “I’m more of a starter than a finisher when it comes to projects, so I surrounded myself with good people who could follow through until it was done, and make it happen.”
The following year Bruer added a second Diamond 210 yarder, to increase capacity.
A similar competitive trend emerged that brought Bruer’s interest in big tower logging. “Everybody can log 1,500 ft., but only select guys can do 6,000 ft. tail holds and logging 3,000 ft. The same goes with the hard units: fewer can do it. So it’s probable if you can (handle that job) to make a better profit.” As Bruer’s approached other decisions, “it’s the math probabilities, an odds thing. Eliminate the competition however you can. I don’t want to work 14-16 hour days just to break even or make a little. I want to make money.”
In 2002 Bruer purchased his first Madill 172 tower, and brought in hook tender Kerry Hubbard’s expertise to get it running right. “He’s as good as there is,” Bruer said with a smile.
Today they have another two Madill 172s.
Most of their trucking is contracted with Charlie Hall, who owns C.G. Hall out of Philomath, Oregon. They have two company trucks: a 2007 Peterbilt 379 log truck with Whit-Log trailer, and a 2007 Kenworth T800 with Whit-Log mule train, “both can haul 35-ton,” he said. We couldn’t get enough mule trains so we bought our own.”
They do a limited amount of road building for their own use as needed, and contract the dump trucking for that.
Today’s crew includes 65-69 total at present, though last summer they’d had upwards of 83 at one point. Currently Bruer has seven feller buncher (all John Deere K959 levelers with Deere FR24B hot saws) sides, three tower sides and one shovel side, with another Madill 172 tower side do to start up again soon. He has two veterans overseeing field operations: Bull buck Steve Weeks in charge of operations north of Philomath, and Mark Schreiber in charge of operations south.
There’s a lot of iron in Bruer’s company, and it’s constantly changing keeping up to date, in warranty, and taking advantage of technical innovations, plus taking good care of his crew. “I used to keep a list of the machine’s I’ve bought,” he said, and numbered all the new equipment and the yarders. “Nothing used gets a number.”
Buying and selling, Bruer said, “...It’s a gut feeling with the market. The past two years I’ve been very aggressive. We’ve always bought in a down market: it’s the cheapest time to buy.” One driver in the new equipment is working within the allowances existing in the tax code. “When the government gives you 100% deduction on buying new machines, it’s an easy determination. In the Bush era that went to the 50% depreciation. A lot of guys didn’t know it existed until the third year. That all made a big difference.”
Another vehicle Bruer uses is Starker Exchanges (1031 rule), which he explained, “...the government allows you to tax exchange equipment for a third party, by selling it for a third party,” and while it sounds complicated the tax (and your bottom line profit) implications are significant. It is certainly worth your time to investigate the details (ask your accountant). The take-away message: it’s legal and can save you a lot of cash.
Also when Bruer sells equipment he makes sure its in top condition, brings it in, repaints, details it just as a car dealer treats their used inventory. “I’d ask a premium price, but I’m willing to back it up as being as I’ve presented it,” Bruer said. “I’ve warranted stuff before.”
He’s very conscious of his debt levels as well. “The faster I can get them paid for the better.”
Just as he’d felt some 30 years ago, Bruer’s “cautiously optimistic” towards the future, and was quick to note that while the last period of compression created a lot of stress and risk, that “...when the market goes up, it’s just as dangerous when you’re increasing equipment and people.” That the demon in the works is the same... “debt kills.”
He admits his mind jumps “back and forth. One minute I’m thinking about quitting and the next I’m thinking about getting bigger, and diversifying, “ but overall he’s aggressively committed to the future. He’s heading into a related diversified venture, “...and a little bit of odd ball stuff as we always have,” he smiled. “We’ll have to see what the future will bring.”
Another commitment is investing in the future work force for our industry. “We need to build our companies future with the people we hire. If it takes twice as long to train these young people today then we need to do that. we as an industry need to invest in our people: better pay, better benefits. You have to have longevity. It costs money to bring new people in but it costs you more if you have to keep bringing new people in and re-training them all over again. To keep their head in the game, you have to have a future for them. A trust factor of trying to build internally, something the industry talks about but haven’t uniformly acted on. We need to quit bitching about manpower issues, and take some risks on people”
And what’s he think about his experience in the business? “An interesting journey to say the least.”
By Mike Crouse