Four years ago I wrote the following My Word in the Times Standard. I took all sorts of flack at the mill, as my fellow employees were put off by my presumption that they too wanted to pursue an Employee ownership or ESOP. I put the idea out there because the mill was in the balance of closing permanently. Just like now.
I still feel we made a mistake by not at least investigating our options more closely then. Evergreen went public that they were profiting millions with very little capital expenditures the first year they operated the mill. Of course they have spent millions in upgrades since, but by all accounts had 20 million owed to them by Lee Kwak when they closed the plant.
If we had more domestic partnerships, I believe we would not have run this financial course.
Most of my observations then are very relevant today. This is not a "I told you so" but a lesson to not be so quick to "Shoot the Messenger."
MY WORD-Richard Marks
Employee Ownership can save Pulp Mill
As a long time forest product worker at Stockton Pacific Enterprises pulp mill in Samoa, I am deeply concerned that my community is missing a once in a lifetime opportunity today in the management shakeup and potential sale of the mill.
Many people do not know that the Stockton Pacific Enterprises Pulp Mill is the only certified totally chlorine free (TCF) pulp mill operating in North America and the only operating pulp mill in California. Our raw material is wood chips, our product is virgin pulp and our market is worldwide.
Over 150 good jobs with benefits that add wealth to the community are directly dependent on the mill, and many more local Humboldt businesses and jobs are indirectly affected by the viability of the mill.
The Stockton Pacific Enterprises Pulp Mill is undergoing another turnover of owners and management. Already workers have given up 15 percent of our monthly wages (around $100,000 per month) in the hope that the mill will not be closed.
Several years ago we reduced our workforce by over 50 employees to cut costs to preserve the company. We have given and will give more to make this mill viable.
We owe the Humboldt Bay Municipal Water District (HBMWD) $600,000 in back payments for water, and if we close down we will never pay; the mill represents 45% of the monthly revenue of the HBMWD which would be borne by increased rates to residents if we close. PPM Finance (an American bank in Chicago owned by a British company) has a 17.5% interest loan which management cannot pay and the threat of foreclosure is very real.
We workers want to buy out our mill and operate it successfully. We can do this successfully through a mechanism called an Employee Stock Ownership Plan (ESOP). We need time to develop a feasibility study and we need community support. We need our local legislators to sponsor legislation giving chlorine free pulp and paper products preferential status in state purchasing to assure a steady local market for our pulp. We need the Headwaters Funds and our economic development leaders to get behind and ESOP feasibility study and local ownership of the mill.
Think what a better situation we could have today in Humboldt County if our community had successfully supported an ESOP buyout of Pacific Lumber when Hurwitz and Maxxam rode into town in the 1980’s. We don’t want another round of foreign management: with a locally managed ESOP, it can be different this time.
An ESOP could provide for at least a 35% ownership, with two employee members on the board of directors; there would be profit sharing; democratic decision making; wages and benefits would be competitive with the industry; worker input on production; sound environmental stewardship and attention to worker safety; job retention; lobbying for greater production and sales of chlorine-free paper products.
We could work toward the conversion or development of the plant to include the manufacture of chlorine free finished paper products to create even more living wage jobs for the community.
To make all this happen, we need a working partnership with the HBMWD, an agreement which helps keep the district solvent without putting extra costs on local customers.
We need better communications between workers here at the plant and our community. We have a long term work investment here. The average worker has been at the plant over 20 years. We want to make this plant sustainable in good times and bad. I believe that an ESOP plan is the best way for direct worker involvement and investment in the future economic viability of this industry. We have a number of excellent models to work from, including the recent ESOP implemented by the Association of Western Pulp and Paper Workers (AWPPW) Blue Heron Paper in Oregon, and the very successful union ESOP at Blue Ridge Paper in North Carolina. We have the resources, the people and the desire to succeed.
But the Stockton Pacific Enterprises Pulp Mill workers and local 49 cannot do this alone. We are asking the community for involvement and input. What kind of economic future do we have here in Humboldt County?
One of the alternatives is foreign management, like the potential Chinese owners or the British bank investors or Pacific Lumber’s Maxxam. Another alternative, one I prefer, is local ownership with real democratic worker participation in an ESOP.
We can choose the future direction and economic development of our community, and we need to act now to make it happen or we will lose this opportunity forever. The workers of Local 49 ask for your support and input.
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