State Water Board - Pacific Lumber/Maxxam's Problems Self-Inflicted

[hatrack]

"A state regulatory agency's geologist and economist claims that Pacific Lumber Co. parent Maxxam Inc. has sucked more than $724 million from its subsidiary by cutting trees at unsustainable rates while keeping Palco running with a precarious strategy.

The analysis from the State Water Resources Control Board is a response to a Palco white paper submitted to the North Coast Regional Water Quality Control Board in March. That document put the financial well-being of the company in the hands of water quality regulators looking at releasing logging plans already approved by other agencies for Freshwater and Elk River. In it, Palco President and CEO Robert Manne said without a resolution to the issue, Palco would have to lay off workers, shut down some operations and possibly seek bankruptcy.

"Palco and Scotia Pacific are in financial trouble," state board geologist and economist Michael Gjerde writes in his analysis. "They are losing money and may have to restructure their operations. This condition is the result of the risky business model that Maxxam has chosen to follow for these companies." The document was drafted at the request of the regional water board. State water board spokeswoman Liz Cantor said the paper was written using publicly available information, and is meant to add to material the boards will weigh in dealing with the issue. An upcoming hearing in May or June will be held on Palco's request to the state board to overturn its regional board's decision not to release a portion of logging plans it had requested.

EDIT

Mark Lovelace of the Humboldt Watershed Council said the paper spells out Palco's intentional decision to keep the company in massive debt, totaling about $750 million. "This company is now suffering from its own cumulative effect of 20 years of its own bad decision making," Lovelace said."

EDIT

http://www.times-standard.com/Stories/0,1413,127%257E2896%257E2857397,00.html

[htuttle]

1. Didn't Maxxam pioneer the practice of shipping raw logs overseas, too?

Seems to me tha Maxxam was the first big lumber company I heard about that sold and delivered raw, unmilled logs to Japan and points east. This lead to the closing of many lumber mills in Montana (among other places), which they dutifully blamed on "The Environmentalists".

As I recall, this was a big part of the dynamic that was going on in the Pacific Northwest when the IWW and Earth First started working together organizing there (with Judi Bari, etc...).

So now it turns out that Maxxam's practices are unsustainable? Well, what a shock...