Hedstrom Lumber Co. in Grand Marais has become a quintessential example of a family business built on pure grit and hard work on the edge of the wilderness. Since 1914, Hedstrom’s has been a dependable part of the timber industry in northeastern Minnesota, producing 15 million board feet of lumber annually.
Howard Hedstrom, at age 71, was the last of the third generation from the Hedstrom family to work in the business. After 43 years with the company that was started by his grandfather, 30 of those as president, he recently retired.
Andrew Hedstrom, Howard’s grandfather, was a Swedish immigrant who pieced together a used sawmill to start the business that would eventually include Howard’s father and five uncles, then Howard and his brother Jack.
On the day that he was finally cleaning out his office for the last time, Hedstrom took time to reflect on what has helped the company survive the hard times and thrive.
Pointing to the mill fire of 1981 as one of his most challenging times, Hedstrom said that when the mill was destroyed much effort and innovative engineering were necessary to rebuild – effort that in retrospect he feels very good about, considering that the bones of that rebuilding are still part of present operations.
Nonetheless, for Hedstrom, the most difficult times were when the economy dictated slowdowns and lost jobs.
“Machinery is hard to lose. We were never overly insured. But it gets really tough with downturns in the economy and then you are talking about people and families,” Hedstrom said.
Still, being able to say that Hedstrom’s has been a reliable employer for over 100 years is obviously a point of pride. One of the largest employers in Cook County, the firm currently has about 40 employees.
“For a hundred-plus years, we’ve been a steady employer, and at times we’ve had to make those hard decisions to carve down to the basics so we could stay running and still be here,” Hedstrom stated.
Looking to the future, he says that while 2019 was not a stellar year for lumber because of lagging construction, he thinks housing growth in 2020 will bode well for the company.
Dealing with the cyclical nature of the timber industry has been a challenge, but Hedstrom believes that by diversifying and finding their niche, they will continue to thrive.
“Use everything” is the philosophy that Hedstrom says has kept the company going through tough times. In addition to boards, wood chips are sold to paper mills, bark is turned into landscaping material, sawdust goes to pellet manufacturing and any other leftover waste is sold to biomass facilities for heating.
Adapting and staying nimble are other attributes that Hedstrom says have been critical to more than a century of business viability.
“We didn’t 0compete head to head with the bigger mills,” he said. “Because we were smaller, we could accommodate specialized projects to order.”
That means exploring new markets, and a willingness to adapt has been key with Hedstrom’s small customer base.
“We had to stay on the lookout for specialty runs, and if someone called us in the morning, we could be making something for a specialty market in the afternoon. Focusing on that has given us higher value compared to bigger mills,” said Hedstrom.
He gives the example of wildfires at Ham Lake and Pagami Creek in recent years as evidence for the need for human forest management, something in which the logging industry plays a key role. The fires were caused by a significant blowdown event that stacked up drying wood for miles, and Hedstrom says harvesting wood from the forest is an efficient way to prevent out of control fires. “If we don’t manage the forest, nature will, and it doesn’t do it delicately,” he said.
Looking ahead, Hedstrom sees a hopeful future where the timber industry can continue to evolve, increasing sustainability through already proven methods, while creating opportunities for greater harvest yields.
“The magic is to keep the growth rates through better management, management using science to capture the best growth that is at the same time good for the forest health overall,” Hedstrom stated.
His wife Bonnie Gay Hedstrom says that Howard’s retirement has been very gradual, allowing both of them to become accustomed to the change.
“Keeping the company strong has been important for the community, and now I see Howard being even more involved in community boards,” Bonnie Gay said.
Hedstrom is active with the Cook County EDA and Chamber of Commerce, along with other community organizations.
Contributing to the longevity of the family-oriented business, says Bonnie Gay, has been her husband’s ability to communicate effectively.
“These tough Scandanvians have strong personalities, but it’s important to have a positive attitude and not be petty about things, and Howard has a really good way of pulling things together and explaining things really well,” she said.
Changing from the old guard to the new leadership team has been a major task for Hedstrom’s, and it is a transition that has been a long time coming, going back to 2013 when Jeff Johanns took over as vice president for Jack Hedstrom (Howard’s brother).
Next, Tina Hegg Raway took over as vice president of finance/HR from Chris Hegg, who also happens to be her dad, and the first person outside of the Hedstrom family to be a co-owner. Hegg has been with the company for 27 years, and now is Hedstrom’s president.
Hegg Raway gives her dad, Chris Hegg, credit for the succession plan, and while she is not related to the Hedstroms, she says that it really does feel like family.
Living just down the street from the mill in the house where she grew up, Hegg Raway walks to work to join the crew that now includes a fourth generation of the Hedstrom family. Matt Anderson, lead engineer, and brother, Kent Anderson, mill consultant, are Howard’s nephews.
Hegg Raway says that the long-term plan has Chris Hegg transitioning out of the organization to retirement in the next few years.
The biggest challenge Hedstrom’s is currently facing, according the Hegg Raway, is an unstable workforce to draw from, with a lack of affordable housing the major obstacle for attracting and retaining employees in the region. To address that issue, talks are currently underway by management to explore company housing.
“We struggle to find employees with a housing and employee shortage, so we are looking into the possibility of an employee housing project to see if that is feasible,” Hegg Raway stated.
Meanwhile, she says that keeping the small company a little less leveraged than larger companies will allow them to be more flexible in any forthcoming timber industry downturns.
Kitty Mayo is a North Shore-based freelance writer.