Keynote for 2024 OSU College of Business Family Enterprise Dean’s Leadership Award

Freres Lumber was founded as a partnership between T.G. Freres and his brother, Wendell. The partnership lasted 20 years from 1922 to 1942. In 1947, T.G. and Amandus Frank joined together and incorporated as Freres Frank Lumber Company. They combined their resources to build a large log sawmill where T.G. had built a planer along the railroad in Lyons, Oregon.

After 5 years, Mandy asked to dissolve the partnership so the assets were divided and the company name was changed back to Freres Lumber in 1952. The combined timberlands were not divided until 1965. I’d like to read a testament to two very honorable men, T.G. Freres and Mandy Frank.

The following was written by Frank Lumber Forester Dick Posekany:

Dick Schuetz of Freres Lumber and I, Dick Posekany, were called to Ted Freres’ office with Ted and Mandy present to receive instructions to divide the Freres-Frank lands. This division was to be done as evenly as possible for each. The total acreage, volume of old growth, volume of second growth, reproduction acreages and block them up each as best you can.

We were to use the cruise and maps that Sherm Feiss had prepared a few years before. Dick and I were told to work independent of each other. We will meet again in a month or so to, “see what you can do!” were the parting words from Mandy and Ted.

After some thought, I decided to prepare each 40 acre parcel by the value items asked for and put a dollar value plus timber on each.

When we met later, both Dick and I were asked how we approached the assignment. We each presented our plan for dividing the property as equitably as possible. After some discussion by Ted and Mandy, they chose my plan of division. The total value for each half of the property was posted on slips of paper of equal size.

They had already decided to draw straws to close the deal. I suggested that before they draw, there should be three slips in the hat. One for Parcel A, one for Parcel B, and the other would be blank so it was possible for the first individual to draw a blank. The second individual to draw could then actually make the division.

They agreed and shook hands. Mandy told Ted to draw first, he did and the land division was completed.

The total acreage of the division was approximately 7,000 acres. Today, 7,000 acres valued at $10,000 per acre amounts to $70,000,000. Can you imagine dividing that much value by drawing straws today?

Veneer and plywood manufacturing was developing rapidly after WWII and it was more competitive rotary peeling logs into veneer compared to sawing a rectangle from a cylinder shaped log. In 1958-59, T.G. entered into a joint venture with Willamette Valley Lumber Company to build and operate a large log veneer plant known as Freres Veneer Company. Willamette Valley Lumber Company would become publicly traded as Willamette Industries in 1967. This joint venture would last 21 years until the Freres family bought out Willamette’s share in 1980.

Auctioning two saw mills and building 2 veneer mills was a milestone for the family business.

In the mid 1970s I experimented with my grandfather cooking veneer blocks prior to peeling them which softened the knots and helped the veneer lay down flat and increased the recovery of veneer. That resulted in the construction of concrete veneer block conditioning vats in 1976 and in 1981. About the same time my father hired a firm to develop a laser scanning veneer block centering device known as an XY charger thanks to laser development by NASA space program.

These two investments really provided our company with the means to compete against larger and better financed companies.

Founder, T.G. Freres was a special man with extraordinary qualities. T.G. Freres passed away in 1979 at age 81. Ted Freres was tested in life, similar to the biblical figure, Job.

T.G. married at age 29 and his wife, Tresa bore him a daughter, Phyllis and three sons, Robert, Harold (Bud) and Larry.

Ted’s wife was taken from him after 9 years of marriage. She died of a heart infection in 1936. Ted remarried a few years later and his wife, Frances, gave birth to five daughters and one son.

In 1961, Ted lost Larry to spinal meningitis at age 24. Harold at age 35, charismatic and mayor of Stayton drowned in 1968. Phyllis collapsed from a brain hemorrhage in 1972 at age 44.

These losses caused changes in management, affected company growth and heightened the need for strategic planning.

In spite of the losses, Ted Freres maintained a strong faith and a great humility. A loving family man and devoted member of the community, Ted was named Stayton’s First Citizen. He gave the land where St. Mary’s Grade School sits and was instrumental in St. Mary’s and Regis High

School’s creation and continued operation. T.G. Freres’ legacy of humility and giving continues today. The specialness of our family stems from the lasting example by our patriarch.

The Freres Foundation was established in 1958 to contribute to education and local needs. $200,000 annually is gifted to the schools, local crisis centers, day care centers and similar worthy endeavors.

The family wanted to give back and provide for employees who helped make our family business successful. A profit sharing retirement plan was implemented in 1958 and presently has over $27,000,000 in trust for employees’ retirement.

I was asked to touch on family dynamics, succession and engagement with family advisors. We presently have 2 dozen non-voting shareholders. Gifting is limited to lineal descendants per a buy sell agreement. Presently there are 3 voting shareholders following a voting shareholder agreement amendment.

Disputes have been almost non existent in part because voting share distribution only to the officers to the company. Also, no shareholder holds a majority of voting shares. This has encouraged open communication and a team approach to decision making.

In 2018 our company president passed away at 68 years of age and the following year, our Chairman died at age 90.

Clint Bentz who is active with OSU’s business school was instrumental in the formation and execution of the succession plan. There 19 years between my twin cousins and me so the transition to the third generation of management has been successful and should be effective for decades to come.

In closing: In recent years, we created a replacement for concrete and steel in tall buildings made from veneer, its a new engineered wood product named a Mass Ply Panel. It was patented and a greenfield plant was completed in 2017 by the company.

Some notable projects include our local Santiam High Gymnasium, the tallest wood building in the Western US at 19 stories in Oakland, CA and the best of all, the MPP 9 acre roof and interior of the new PDX terminal opening in August, 2024.

Today we are investing in R&D into new ways to produce plywood due to the limited labor supply following COVID and the catastrophic Beachie Creek fire that tore through our canyon displacing thousands.

It takes a lot of perseverance and fortitude to operate in such a volatile industry in Oregon but we remain committed to be a long term survivor. Thank you for recognizing a century of hard work by giving our family the Dean’s Leadership Award.