|
|
 |
| Voice of the Environment's mission is to educate the public regarding the transfer of public trust assets into private, mostly corporate, hands. | ||
|
Ukiah office: 1330 Boonville Rd Ukiah, CA 95482 707-467-0329 |
||
|
Marin office: 270 Beach Rd Belvedere, CA 94920 415-435-2007 |
||
| For two decades, Voice of the Environment has stood up for the people and our communities against the avarice of corporations and the misguided policies of the corporate-dominated state. |
|
Print This Article Wednesday, August 31st, 2005 Redwood Logger Makes More Cuts at Company-Workers Feel the Brunt Bay Area Coalition for Headwaters Humboldt County, California--As Maxxam CEO Charles Hurwitz is awarded $72 million by a judge in Texas, stability of Maxxam's subsidiary in Northern California continues to erode. Yesterday, Maxxam/Pacific Lumber (PALCO) subsidiary ScoPac announced that one third of its work force is being laid off. ScoPac narrowly avoided bankruptcy in July when it made a last minute interest payment on its massive debt, despite the fact that Hurwitz's Maxxam has reaped millions in profits, dividends and assets without ensuring debt payments. Millions of dollars have flowed from Humboldt County to Houston, Maxxam headquarters, enriching Hurwitz's coffers while the timber company's resource base has been depleted. Now Maxxam claims that it is unable to pay down its debt. ScoPac's debt today at nearly $750 million stands little depleted from the $870 million that was incurred in its highly leveraged buyout of Pacific Lumber Company in 1985. Community leaders and environmental analysts who have long advocated a more sustainable approach are responding by calling for foresters, economists, workers and other community members to come together to develop the long term vision that has been missing from Maxxam/Pacific Lumer's business plan. "Operating on a boom and bust model, the bust comes predictably-and that's the storm the workers are riding out right now", said Karen Pickett from the Bay Area Coalition for Headwaters. "Because Maxxam nearly tripled the cut after the takeover, and sold many of the assets, there was a surge in jobs, which obviously can't last. The tragedy is that if the company had continued with select cuts at the the level of the early 80's, they could have guaranteed jobs and saw logs in perpetuity." Instead, Hurwitz took $411 million from asset liquidation, refinanced the company, yielding dividends of $927 million from ScoPac to Maxxam and its subsidiaries, and profited handsomely from the 1999 Headwaters Deal, which brought in $480 million of public funds to the company. While skimming off massive profits to Houston, Hurwitz set up the work force to cut their own future. Despite the high level of cut of its most valuable asset-old-growth redwood-the timber company has been losing an average of $20 million a year, while the pre-Maxxam Palco averaged over $20 million a year in net income in the four years prior to the takeover. "It was not that the money wasn't coming in", said Pickett. "It was that it was going out--to Houston." State Water Resources Agency economist Michael Gjerde's recently wrote that "Maxxam has taken money out of Palco in complex and subtle ways and has directed Palco to harvest trees at rates that greatly exceed sustainable forestry practices," and found that "Maxxam removed at least $724 million in Palco funds for its own use." The reality is that it didn't need to happen for Pacific Lumber to stay in business and remain a positive economic force in the rural county. Print This Article |
|
|
|
|
|
Voice of the Environment is a 501 (c-3) not-for-profit Montana-based corporation formed in 1991.
|