   | ||
|
 | Newsroom | |
 | |||||||||||||||||||||||||||||||||||||
| ScoPac Layoffs For Immediate Release - Contact: Karen Pickett (510) 548-3113 Redwood Logger Makes More Cuts at Company--Workers Feel the Brunt Humboldt county--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 as Maxxam/PL subsidiary ScoPac announced that one third of its work force was 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 sucked off profits, dividends and assets without ensuring debt payments. Hundreds of 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 to the extent that it is now unable to pay down its debt, according to California State Water Resources economist and geologist Michael Gjerde. ScoPac's debt today at nearly $750 million stands little depleted from the $870 million that was incurred in the highly leveraged buyout 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/PL'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--if the company had continued with select cuts at the the level it was operating in the early 80's, it is possible they could have had 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--the 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." The State Water agency's Michael Gjerde's April 27 report found 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. The report can be found at http://www.wildcalifornia.org/cgi-files/0/pdfs/1115337104_Private_Land_State_Water_Board_Report_on_PL_Finances.pdf  << Back to Press Release Archive | Latest Press Release | Newsroom | | 
| | |||||||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||||||||||
|
| |
Bay Area Coalition for Headwaters (BACH) is a project of the Ecology Center. Website design facilitated by Trees Foundation. © BACH |
