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TBM Hardwoods will auction off assets

TBM Hardwoods Inc. of Hanover, Pa., a seven-generation family fixture in the American hardwood industry since 1798, is holding an auction in June to "reorganize inventory and consolidate underutilized assets."

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International Auction and Appraisal Services of Shrewsbury, Pa., will conduct the June 22-24 auction at the TBM Hanover facility. Among the numerous items to be auctioned are a leased office warehouse and office building on 7.65 acres, two million bf of lumber, a huge Livington Moore log boss sorter/stacker system, molders, band saws, planers, fork lifts, tractors, cars, office furnishings and computers. Smaller items include a John Deere snow blower, ice machine, chain saws, jacks, spray equipment and fire extinguishers. Although industry sources have told Woodshop News the company is going out of business, TBM chairman Thomas McIlvain adamantly denies those reports.

"This is a very positive initiative that we are undertaking here," McIlvain tells Woodshop News. "The pie has gotten a lot smaller through this recession and it will take a long time for it to recover - whatever recovery means - and as a result we have made a decision to downscale and reset so we will be able to stay in business as we go forward doing a smaller volume of business. That is what has really prompted all of this.

"We were a much bigger company, as a lot of companies were, with a lot more people and a lot more sales and, as a result, a lot more overhead. And the volume is just not there to support it right now. Personally, I don't think it is going to be there for a while so we're going to use the word 'sell' or 'auction' or 'liquidate,' whatever you want to call it - we're using the word auction - but basically we are liquidating a lot of assets that are underperforming. But the company has never been stronger financially and we're more and more focused on the industry leaders and the market segments that we service and we're cautiously optimistic about the future."

TBM has scaled down its work force from 83 about 18 months ago to a current staff of about 20. According to McIlvain, all departments within the company "took the hit."

"Financially, we're very strong and we do have a lot of underperforming assets - machinery, kilns and excess lumber - and we decided it doesn't do any good sitting here doing nothing, so we're going to get rid of those assets. We don't foresee needing a million feet of kiln-drying capacity, for instance. We use the word 'streamline,' use the word 'consolidate' and it is just going to make us even stronger, we feel, so we can respond to market changes.

"This is a very positive story. We knew it was going to cause all kinds of stir and there is nothing we can do about that. Talk is cheap. People can write and talk all they want. It is not going to affect us one iota."

This article originally appeared in the June 2010 issue.

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