Fwd: Re[2]: [at-l] Maine land buyout

[spiriteagle99@hotmail.com (Jim and/or Ginny Owen)]

Clifford R. Haynes wrote:
>Folks from away come up here and do there best to make it impossible to 
>harvest timber, talk about takeing the land and timber away for a National 
>Park. What do heck do you expect, These are the folks we can thank for 
>developement and loss of access to the Maine North woods.


To which Weary replied:
>For what it's worth, I find Clifford's explanation pretty farfetched.

And then added:
>I'm not privy to the discussions of the managers of the paper industry. But 
>the value of industrial stocks has soared in recent years. Prices have 
>increased at a rate of 20 per cent or more a year. For companies in the 
>paper industry, whose stocks lagged in this rise, the pressure must have 
>been enormous for managers to increase short term profits, and thus 
>generate similar increases in their company stock prices.


Problem is - you're both right.  If memory serves, IP sold out to a South 
African conglomerate some years ago.  That conglomerate never had any 
intention of holding the land on a long term basis.  Their announced purpose 
from the start was to make a quick and dirty profit and get out.  One of the 
factors WAS the perceived probability that the enviro movement in the US 
would make logging difficult, expensive and eventually unprofitable.  The 
intent was always to grab the goodies and run before that happened.

You can blame corporate greed if you like, but the root cause of the entire 
fiasco was the perceived unfriendly future environmental climate in the US, 
fostered by an anti-business, anti-logging administration in Washington.  
The long-term prospect for a "logging-friendly" climate in the US was very 
dim - and that's not conducive to the continuation of long-term 
sustainability as a business practice.  The local politics in Maine may not 
have helped, but it wasn't a major factor either.


>I suspect bonuses, promotions and valuable stock options went to the 
>manager who increased profits for the short term by liquidating the forest, 
>rather than the manager who aimed for a sustainable supply of raw materials 
>for their mills three decades from now when the manager most likely would 
>have retired or moved on to higher jobs.

It was worse than that - the managers were "ordered" to do what they did. It 
wasn't just "run your operation profitably" - it was "run your operation to 
make the profit levels demanded by the corporation or you won't be here next 
year".  There was no consideration given to "three decades from now" because 
they didn't intend to be there that long.  And the profit levels demanded 
were very LARGE.  It's easy to rape someone else's land - especially when it 
pays so well.


>I think most of us learned in about the second grade that if you keep 
>subtracting more than you add, sooner or later you will end up with 
>nothing.

Yep - and if we keep on locking up land (i.e. - subtracting it from the 
available resource pool), then sooner or later there's nothing left to log - 
so lumber becomes either too expensive for the average bear or the lumber 
companies go out of business.  In either case, the construction industry 
goes belly-up, the housing market (among others) goes into the middens and 
we're back to 1929 and another depression.  Just a quickie lesson in 
"actions have consequences".  We can expand that analysis if you like.


>These are all multi-national companies. Most have forests in a dozen states 
>and many foreign countries. Surely, the aim is to produce the fiber needed 
>for their products as cheaply as possible. That may have meant clearcut 
>Maine this decade, then close Maine mills, and move production to Arkansas, 
>Florida, Thailand, where ever. Such a tactic is especially easy in Maine 
>with its 3,000 lakes and miles of wild rivers -- all easily sold waterfront 
>for summer homes and wealthy estates.
>
>At least, this makes more sense to me than speculation that a Green 
>candidate for governor, who managed 5 percent of the vote, somehow scared 
>them away.

You're right, but you're "parochializing", Weary - a company will take local 
culture and politics into account only 1/ if they intend to stay and 2/ to 
the extent that it will affect their operations.  The decisions that 
affected the Maine forests were made a long way from here by people who 
barely know where Maine is located. And their reasoning had a lot more to do 
with the overall perceived political/environmental climate of the US for the 
next 10 to 20 years than with sustainability.

One of the unfortunate results of the business (and environmental) climate 
for the last 20 - 30 years is that it's fostered an attitude that the major 
goal is short-term profit.  Sustainability is still a scientific curiosity 
in much of the business world. It's taught in the business schools - but not 
necessarily practiced in the board rooms because it doesn't fly well with 
the retirees in Florida and Arizona who want to maximize their pension fund, 
or with the factory workers in Michigan and the dot.com crowd in LA and NY 
who want to maximize their stock prices so they can join the retirees in 
Florida and Arizona.

You can argue all you like about this, but that's a short synopsis (although 
from memory) of a business case analysis that came out of a Masters program 
a couple years ago.  I may actually have a copy of it someplace, but it's 
not readily available until I get to unpack some boxes.  That'll take a 
while.

Have a good day,
Jim



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