If all had gone according to plan, Jim Shepard would still be retired.

He'd be spending his winters in California, his summers in B.C., and running marathons and publishing children's books based on bedtime stories that he used to make up for his grandchildren.

The president and CEO of Vancouver-based Canfor Corp. still runs marathons and he has a children's book in the works. But since coming out of retirement last year, he spends most of his time at the helm of Canada's largest softwood lumber producer.

You could compare his task to running a marathon, especially during a global recession and an era that many analysts consider unprecedented for the forest sector. But Shepard, 69, who retired in 2000 after serving as president, CEO and chairman of Finning International Inc., is used to adversity.

Bayne Stanley, Business Edge
Canfor CEO Jim Shepard remembers his early brushes with adversity while growing up in Vancouver.

Like late B.C. Lions president and CEO Bobby Ackles, an old friend from their days as high school and junior football teammates, Shepard considered himself homeless during his troubled youth. Fast-forward to the present day and he's trying to resuscitate Canfor after hundreds of millions of dollars worth of losses. He has led the company through mill closures and curtailments, salary rollbacks and heavy layoffs.

In other words, his return to retirement is on hold while he tends to Canfor's employees (whose full salaries he plans to restore when times are good), investors and customers.

1. What did your parents do?

"My father was a professional hockey player (in the National Hockey League and minors). My mother died when I was young. I didn't know what I was going to do (career-wise) ... I had incentive to get out of my situation as quickly as possible. There was no white picket fence."

2. Could you elaborate on being homeless?

"In my last year of high school, I lived in my friend's family's basement. My brother and I wandered in and out of a lot of homes while my father wandered in and out of a lot of beer parlours and construction camps. It was a lesson in survival, but it was a challenge."

3. What qualities did you develop as a result of those early experiences?

"My brother and I, we were both blessed. We both had talent. Mine was, I was a scholar. My brother's was that he was a dancer. He was on the Dean Martin show for six years and the Red Skelton show and the Danny Kaye show ... He had this ability to totally focus. We lived with a lot of aunts and uncles. He was focused on (dancing) and I was focused on my schooling."

4. Who has influenced you the most?

"My mother (Jean Shepard). She died when I was starting my teens, but she is one of the biggest reasons for my success. She said from the first time that I was able to understand the English language, I had the ability to do anything that I wanted. No. 2 is my late wife (Dianne) of 42 years. She taught me about integrity. When we were young and first got married, I had lots of energy, I had lots of potential, but really it was a case of putting it together in a way that it had consistency and, really, self-discipline. Over the life of our courtship and marriage, she was an unbelievable influence on me and was a huge reason why I developed the ability to put it all together and push it in the right direction. My two sons (Jim Jr.
and Michael) have been incredibly important to me and provided me with incredibly good guidance. " 5. What was your schooling like?

Jim Shepard

"I went to King George, down in the West End (of Vancouver). It's still there, but I was at the old school. It was right across the street from St. Paul's Hospital. At the time, when I went there, it was a rough school, a blackboard jungle. The individuals that I was in school with, they were going nowhere in the fast lane. Petty crime, shoplifting. It was just not a good scene and I wanted to get out of there. I was there for Grade 9 and Grade 10 and I basically transferred myself up to King Edward (high school) for Grade 11. That's where I met the fellows who are my lifetime friends, basically members of the football team. I went out for the team, I made the team and Bob Ackles was one of that group. Those guys were the ones who had a huge influence on me, because they were wholesome guys, they had good values, they were sports-oriented and they had an incredibly important influence on me."

6. How did Bobby Ackles influence you?

"Bobby and I were very good friends. We had a window-cleaning business together just after we got through high school. We kind of influenced each other. If there was a poster for a nice guy, he was the ultimate nice guy. Football was his passion."

7. Why did you decide to study engineering?

"Mainly, because math was my best subject. Math is the language of engineering."

8. What was one of your most memorable experiences at Finning?

"(Finning's) acquisition of Leverton, the English Caterpillar dealer, from Unilever. It took 17 months. It was a very difficult acquisition."

9. What did you imagine that your retirement would be like?

"I actually had a place in Palm Springs on the golf course, and still do. Basically, I thought retirement was going to be winters in Palm Springs, summers in Vancouver - maybe up at the cottage - and a lot of time with the grandchildren and quite a bit of travel. In my retirement, I ran the New York Marathon, the Bourdonne Marathon in France, the Melbourne Marathon (in Australia) and the Los Angeles Marathon. I didn't have a set (retirement) plan. Well, I guess I did, from the point of view that we had purchased a place in Palm Springs. I was going to get good at golf - and I failed at that miserably - and I was going to explore the whole idea of doing something creative, but I just didn't know what it was until I stumbled on writing out these stories I used to make up with the grandkids. The three of us basically wrote these manuscripts, one of which is in final editing right now."

10. Why did you come out of retirement?

"I got a call one day from Jimmy Pattison, a major shareholder of Canfor, and was asked if I'd be interested in taking on a short-term project. It turned out to be this. I got elected to the board in 2007 and I took on the title of interim CEO. But the truth was, when I got here the company was in so much need of my attention ...

The board and I agreed I would stay on and the interim tag was removed. Basically, I'll stay here as long as I feel I can make a contribution."

11. What do you say to people who ask if you're crazy for taking the helm of Canfor?

"When I was a kid growing up in Vancouver, there were several major forestry corporations. Canfor is the only one that's left. I was chairman of the Business Council (of British Columbia) back in my days with Finning. I spent a fair bit of time speaking to our government about the need to retain head offices and attract head offices."

12. What's it like trying to manage the company in this situation?

"Quite frankly, the difficulty in management is not the situation you're in. Where there is difficulty in management is if you've got the team that is not prepared for the job. If you've got the right team and the vision is clear ... there isn't difficulty."

13. How do you feel when you see poor financial results?

"The whole focus in difficult times is cash. Cash is blood. When a company runs out of cash, it runs out of blood. Right from the day I started here, the focus has been on cash conservation. We definitely are highly regarded throughout the industry for our strong balance sheet. Conserving cash is how you survive this type of a downturn, and we're doing that well ... Our operating cost is coming down slowly, but surely."

14. How do you rally the troops during these troubled times?

"The most important point is that we're communicating with our employees. We've got five mills down right now. For every three boards that we used to produce, we're now producing two. The first thing I did when I got here was put in place the executive team. Every one of these individuals, as far as I'm concerned, is at the top of their game. They're a team that I have complete confidence in. After we put the team together, we had a 25-per-cent head office reduction. One-quarter of head office basically got eliminated. We then went after our suppliers and our contractors for a 15-per-cent reduction in their cost to us. After all that - this was back last year - we were still in heavy weather. When we first started, I gave myself a 25-per-cent pay cut and the directors got into the spirit of things and gave themselves a 33-per-cent fee cut. This year, we've instituted a salary rollback - 15 per cent for the executives, seven per cent for the management and three per cent for all the rest. The thing is, the human spirit has an incredible ability to endure pain, as long as it really feels like it's being shared by all concerned. I don't think there's anybody in this company who doesn't feel that everybody is sharing this theme of getting the job done. Quite honestly, it's come to the point where people really feel like they're doing more than just working. They're making a contribution to the survival of this company."

15. What's your take on the state of the industry?

"We're probably about halfway through the storm, so 2009 is probably going to be pretty much as challenging as 2008. It'll be 2010 before we start to see any kind of recovery."

16. Why is the industry in this situation?

"It all started with the whole (U.S.) housing crisis of the sub-prime mortgage fiasco. People without jobs were able to take on mortgages for a full 100 per cent value of a house. If they needed another $25,000 for furniture, they'd get that, too. It was insane - absolutely insane. That was the beginning of it, and certainly that's why in the forest industry we've been going through this recession issue for the last year and a half. Everybody else is just catching up right now. We're kind of like the veterans of this battle that's ahead of us."

17. Some people think the problems date back years, to what you were alluding to earlier, which is how these companies disappeared. Do you see other causes besides the current situation?

"No, I don't see that. What happened on the forestry side of things was the (decline of) coastal logging, and I'm not going to comment on it because I've never been involved in it. It came under incredible pressure environmentally and commercially. Some of the major companies vacated here. But in its place came the growth of the Interior of British Columbia sector, which has proven to be probably the most highly automated and competitive industry sector. The lumber industry is a highly productive part of the equation and Canfor is very much a part of that."

18. What are some of the long-term historical factors?

"It boils down to this: I was born and raised in this city, and all my life I had the impression that if you ever wanted to get anywhere in lumber, all you had to do was build another sawmill in British Columbia. There was an endless supply of lumber.

The world saw this. And when you've got a market where there's an endless supply, the law of supply and demand is that your prices don't work for you. You ask the question: If that is true, how come there were these cases where there were run-ups in lumber pricing followed by drops? Well, you had this oscillation of demand ... then the velocity of demand outstripped the velocity of supply. It's a cyclical business. The cycle is between very high profits and not-so-bad profits. You have this situation for most healthy industries. In the long run, what is very healthy about this industry is that the world is starting to realize that there's not an endless supply of lumber available from Canada. Why is oil where it's at?

People think we're running out of oil. Well, the fact of the matter is, people are going to start thinking we're running out of lumber. In fact, we are. Quebec and Ontario's annual allowable cuts are both down 20 per cent - 20 per cent permanently. British Columbia's annual allowable cut will go down in the next few years, once we get through this mountain pine beetle cut that we're going through right now. So it's becoming evident that there is not an endless supply of lumber from Canada. That, in the long run, makes this industry a good place to be."

19. What kind of personality do you need to run a company like Canfor?

"To run a lumber company is to run any company. The most important thing that I brought to this business was, I didn't have any preconceived notions. I didn't have any unfounded confidences in my wisdom or my ability about how this company should be run or what should be done. People didn't have any unrealistic expectations of me that I would know these things - because I didn't. All I did was make sure that I had the best possible team. When you put it all together, that's the brains of this company. All I do is give them a chance to do their thing - and they do it very well."

20. What else will you be doing, besides publishing children's books and running marathons, when you're not running Canfor anymore?

"I've got lots of things going with my grandkids. I'll be taking them on trips. I've given them an offer that I'll take them anywhere they want to go one time when they're 10 years old. My oldest grandson has chosen the Beaches of Normandy (in France). Just last week, he said that he'd like to go down to the Vimy Ridge Memorial (site of a tribute to Canada's World War I veterans in France). This is the kind of inspiration I get from my grandchildren. My oldest one is into military history. He can tell you exactly why the First World War started."

Jim Shepard

* Title: President/CEO, Canfor Corp.

* Born/raised/ age: Vancouver, 69.

* Education: Shepard obtained a bachelor of applied science in civil engineering from UBC.

* Family: Widower, father of two, grandfather of three.

* Career: After graduating from university, Shepard held engineering positions with Procter and Gamble, and oil manufacturer Babcock Wilcox before spending 32 years with Finning International Inc., where he rose through the ranks to become president, CEO and chairman. He retired from Finning in 2000 and was lured out of retirement in 2007 to take his current post at Canfor.

* Moonlighting: Shepard has held several board positions with major companies and organizations, including chairman of the Business Council of British Columbia, chairman of Macdonald Dettwiler and Associates and director of Imperial Oil Ltd.

* Passions: Family, running, skiing.

Canfor Corp.

* Brass: Peter Bentley, chairman; Jim Shepard, president and CEO; David Calabrigo, vice-president, corporate development; Mark Feldinger, vice-president, wood products manufacturing; Ken Higginbotham, vice-president, forestry and environment.

* Profile: Vancouver-based Canfor is an integrated forest products company that has ownership stakes in 31 facilities in B.C., Alberta, Quebec, Washington state, and North and South Carolina. The corporation derives the name Canfor from a longstanding nickname for its main operating company, Canadian Forest Products Ltd. Canfor ranks as Canada's largest softwood lumber producer and also produces oriented strand board (OSB), remanufactured lumber products and specialized wood products. Canfor also holds a slight majority interest in Canfor Pulp Limited Partnership, one of North America's largest softwood kraft pulp and paper producers.

* Stats: Canfor reported a third-quarter loss of $94.2 million, or 66 cents per share, compared to $64.2 million, or 45 cents per share, in net income for the same period in 2007. For the first nine months of this year, the company reported a net loss of $115.4 million, a slight improvement from a $123.6-million loss last year. The company showed a strong improvement in third-quarter earnings with a net loss of $3.5 million versus last year's $20.8-million second-quarter setback and $45.9-million loss in the third quarter of 2007. On an annual basis, Canfor produces up to five billion board feet of lumber, 450 million square feet of plywood, and one billion square feet of OSB. The B.C. government has granted the firm approximately 11 million cubic metres of allowable annual cut under forest tenures.

* Recent Stock Price (TSX:CFP): $6.55 (52-week range, $11.10-$5.90).

* Website: www.canfor.com HQ: #100 1700 West 75th Ave. Vancouver,V6P 6G2 Phone: (604) 661-5241 (Monte Stewart can be reached at monte@businessedge.ca)