RACINE - Brannum Lumber almost made it to its 100th anniversary - but instead will close next month after 99-plus years.

Company officials said the long-time Racine construction supply company at 1720 Taylor Ave. will close Dec. 20, just five months short of its century mark in business.

A funding shortfall in a Teamsters national pension fund, affecting just two employees, was the tipping point, Brannum President and minority owner Dale Anderson said Monday.

However, he said the forecast for Brannum was already cloudy because of how the local building products industry was affecting the firm.

Ironically, business has been up since August, said company General Manager John Burgess - who is also a grandson of company founder James Brannum.

And the recent closure of Stock Lumber in Sturtevant only added to Brannum's future business prospects, said Brannum's majority owner, Henry Anderson.

"That would have been very helpful, because there were some nice accounts there, too," said Anderson, 81, of Elmwood Park, who has retired and left the business operations to his son Dale.

Stock and Brannum both catered to independent contractors, Burgess said, as well as walk-in business. Brannum's main customer was the small- to medium home builder.

The slumbering home-building industry was already hurting Brannum as long as a year ago, Dale Anderson said.

But in the end, he said the small company, which has just two union employees, was torpedoed by the same issue that spawned a six-week August-September garbage haulers strike in this area.

That issue is the vastly underfunded Teamsters Central States Pension Fund which was placed under federal government oversight in 2005. The fund's appointed special counsel, Frank McGarr, reported on Aug. 1 this year that the fund is on critical, or "red zone," status, the most-endangered classification.

By federal law, when a union pension is underfunded, that liability is split among all employers of those collective bargaining groups. If a company closes or a union local leaves the union, the company must pay that liability, Teamsters Local 43 Secretary-Treasurer Jerry Jacobs confirmed.

Waste Management's insistence on getting away from that pension fund, and the Teamsters' refusal to grant that request, was what kept the two sides apart for six weeks in the garbage haulers strike.

Fluctuating withdrawal cost

Dale Anderson said Brannum's latest "withdrawal liability" to the Teamsters pension fund, based on its total liability last Dec. 31, was about $197,000. That would be his cost if Brannum closed this year. "That itself is a lot for a small company like us to handle," he said.

"But if we went into '09 by just one minute," Anderson continued, the withdrawal obligation would be set by the Teamsters fund shortfall on Dec. 31, 2008. That's where this year's horrific stock market would raid the Brannum owners' pockets, because market losses have deflated pension funds nationwide.

By waiting, Anderson estimated, Brannum's withdrawal cost could jump to somewhere between $300,000 and $400,000.

Even if the two Brannum employees wanted to get out of the Teamsters, Anderson said, his lawyer tells him there would be no way for the local to decertify this year.

Asked about the Andersons' decision to close Brannum this year, the Teamsters' Jacobs said, "You can make a case for or against it." The Teamsters have a plan to get Central States to 100 percent funded in 15-18 years, he said.

"(Anderson) can pay that $200,000," Jacobs said, "but if they're going to be around a long time … (the stock market's return to normal) will reduce his liability. But very few employers are looking at it that way."

"It's a sad day when anybody gets put out of work," Jacobs said.

Company history ending

The Andersons are already talking to potential buyers for their approximately 3.5-acre property, which includes the store and several outbuildings.

Burgess said his grandfather's company, launched in 1909, originally provided materials for the now defunct Gold Metal Furniture Co. Over the decades it provided materials for such Racine area landmarks as Waxdale and the Siena Center.

At one time Brannum owned part or all of 101 independent lumber yards around the Midwest, Burgess said, including businesses in Downtown Racine, Caledonia, Union Grove and Kenosha.

Burgess said Brannum's method was to open a lumber yard in a small town, have someone manage it for him and eventually sell it to the manager.

But soon, Brannum's story will end quietly, when the doors are shut for the last time. And Henry Anderson blames the union most of all. "We're trying to provide a job, and no one's being realistic," he said.

"It hurts, because Dale was planning on the 100th anniversary year, and that's not going to happen."