A Tale of Two Owners : Old Redwoods, Traditions Felled in Race for Profits
Kurt Newman, a 24-year-old environmental engineering student at Humboldt State University, gingerly stepped along the trunk of a felled redwood, using it as a bridge over mounds of branches and sawdust and upturned earth. Around him, like islands in the logging debris, stood nine redwood stumps, wider than card tables. On one stump lay a chain saw.
“This was all untouched on Monday,” Newman said, shaking his head. “They’re going to town (like) busy little beavers. But they’re chewing their own tails.”
Newman, a member of the radical environmental movement Earth First!, was walking on timberland owned by Pacific Lumber Co. The clearing was once a grove of old-growth redwoods, trees between 200 and 2,000 years old--older than the region’s logging industry.
Pacific Lumber has the largest holding of redwoods in private hands. But since its takeover by corporate raider Charles Hurwitz in late 1985, the company has doubled its pace in cutting old-growth redwoods for lumber. Old-growth holdings that under previous cutting rates would have lasted 30 or 40 years will now be gone in 20, according to company officials. Newman and other Earth First! members, who speak reverently of redwoods as “fellow beings,” have vowed to put their bodies on the line if necessary to stop increased cutting.
But Pacific Lumber’s old-growth conflict is more than the familiar saga of environmentalists versus loggers. It is a story of the collision of 1980s Wall Street finance with a century-old, family run company, a story of junk bonds printed on redwood pulp. It is a story of changes in the way of life of a secure company town that could wind up bridging the traditional gap between timber-industry workers and environmentalists.
Run by the wealthy Stanwood Murphy family since the turn of the century, Pacific Lumber stood out among logging companies for its conservation-minded policies, local environmentalists agree. Since the 1920s, company officials worked closely with environmentalists to sell some of their most scenic redwood groves to the state park system. And while other companies plunged ahead clear-cutting their land, Pacific Lumber practiced mostly selective cutting--always leaving some old trees to provide shade and protection for the seedlings that sprouted around them.
Benefits for Workers
They were also considered a model employer, offering workers low rents in company-owned housing and providing a wide range of benefits, including college tuition for workers’ children. Pacific Lumber’s “sustained-yield” logging style allowed them to maintain a stable work force of 900 throughout the 1970s, while loggers elsewhere in the county lost jobs due to over-harvesting and the expansion of state and national parks, company officials said.
The company town of Scotia, where everything from the coffee shop to the gas station is owned by Pacific Lumber, was most definitely not a union town.
“They always treated everyone so well, why rock the boat?” said John Maurer, a former Pacific Lumber employee who left after the takeover. “You knew you’d retire from there, and if your kids wanted to work there, they would. . . . People cared for the company and wanted to see it prosper.”
In 1972 company President Stanwood A. Murphy died unexpectedly, leaving children too young to assume control of the business. The new management tried to continue the old practices, but by the mid-1980s found that their conservative logging practices and overall economic health made them an ideal target for a corporate raider.
Stock a Good Buy
“It was felt that the redwood timberlands were worth substantially more than what Pacific Lumber stock was selling for,” said John E. Maack Jr., a San Francisco timber industry analyst. “And from its earnings, Pacific Lumber looked in pretty healthy shape. It had high-quality earnings and was debt free, although its cash flow was always pretty skinny compared to other companies.”
In late 1985, Houston financier Hurwitz made a bid for Pacific Lumber through his New York-based real estate firm, Maxxam Group Inc. Pacific Lumber’s directors fought Hurwitz’s early offers, but when he raised his bid to $40 a share, or $900 million altogether, they gave in, although the Murphy children continued, unsuccessfully, to fight the takeover in court.
Company employees were at first shocked and angry. In a move without precedent in quiet Scotia, workers signed a petition protesting the takeover bid, and someone even hanged the company’s chairman in effigy for agreeing to the deal. But with a few exceptions, most employees settled down to a cautious waiting when they learned that Hurwitz would guarantee their wages and benefits for three years--and when the overtime pay from the increased cutting began rolling in.
Harmful in Long Run
“Everyone realizes that cutting all the old-growth will hurt us in the long run, but people think mostly in the short run, about things like whether they’ll raise the rents here in town,” said Pete Kayes, an eight-year Pacific Lumber employee. “Mostly people feel that whatever’s going to happen is going to happen, and we’ll either be here or we won’t.”
Maxxam, which itself was bought last month by Hurwitz’s Los Angeles-based MCO Holding Corp., incurred $770 million of debt in the Pacific Lumber takeover. A total of $575 million of the debt was financed through so-called junk bonds--high-risk, high-yield notes. To pay off the debt, Hurwitz last summer announced plans to sell some of the company’s assets and to double the logging pace and modify the traditional selective harvesting policy. The company hired 200 workers, started scheduling more overtime and bought an additional sawmill in the nearby town of Carlotta to handle the increase.
“We’ve about doubled our yields since 1984 to 260 or 280 million board-feet a year,” said Pacific Lumber spokesman David Galitz. “We did very little clear-cutting in the past and we have increased that, although not as much as we’re being accused of.”
Cutting Into Reserves
Much of the increased harvest has been from Pacific Lumber’s old-growth reserves. Old growth, with tighter rings and fewer knots, is the highest grade of redwood and brings $1,500 to $1,800 per thousand board-feet, far more than the $600 or $700 brought by wood from younger “second-growth” or “third-growth” trees, Galitz said.
To most in the timber industry, old growth is also considered “dead wood,” better off cut and cleared away. While younger trees grow at a rate of 6% to 8% a year, after several hundred years growth slows to a halt.
“The old-growth forest is dying,” Galitz said. “Eventually it will fall down and new trees will come up. To me, having wood like that lay on the ground is a waste of a good resource. You won’t find much wildlife in there. I hunt deer--many of our people do--and you won’t find any deer in there.”
Earth First! members don’t find such arguments persuasive.
“They argue that those trees are dead and dying,” said Earth First! activist Bob Ornelas, “but they’ll go on for a few hundred years more. We’re all gradually dying from the age of 30, but no one’s going to chop me down because of that.”
Ecosystem Involved
And the old-growth groves are a small but irreplaceable ecosystem, the Earth First! members say.
“We’re not going for scenic beauty but for biological diversity,” said a longtime Earth First! member who goes by the name of Mokai. “They shelter species that need the old-growth: the spotted owl, the red-backed vole. If the old growth disappears, those species disappear.”
In facing off against Earth First!, Hurwitz and Pacific Lumber have found themselves confronting the most radical group in the environmentalist spectrum. Critical of the political compromises made by more mainstream groups, Earth First! adopted a motto of “no compromise in defense of Mother Earth” when it was founded in 1981.
Earth First!’s extralegal tactics in other logging conflicts--such as driving spikes into trees to break chain saws or sitting in trees themselves to stop the logging--have brought them criticism from more mainstream groups.
With Pacific Lumber, the group’s tactics so far have been relatively conventional: monitoring the timber harvest plans submitted for state approval by the company, threatening lawsuits and picketing state Forestry Board meetings dressed as bears and other wildlife. The state Department of Forestry, which reviews logging plans for significant environmental impact, has approved Pacific Lumber’s increased old-growth harvests so far.
A Complex Issue
Other environmental groups have been less vocal on this issue than Earth First!, in part because it is an unusually complex one, activists said. The trees in question are spread in many relatively small parcels throughout Pacific Lumber’s 194,000 acres of holdings--some in 10,000 to 15,000 acres of pure old-growth but others in areas already partially logged and therefore mixed with younger trees. They don’t adjoin any public lands and would be very difficult to preserve through purchase and incorporation into the parks system.
Most important, the logging is not on national forest land but on private property.
“If the U.S. Forest Service were treating land like this it would be a pitched battle,” said Sally Kabisch, Northern California field representative for the Sierra Club. “With private ownership, it’s a much more difficult issue. The legal reality is that, except for the Forest Practices Act, the owner has the basic constitutional right” to do what he wants with it.
When the Earth First! group began to organize around the old-growth issue last November, they found themselves the unlikely bedfellows of some logging industry veterans who had already been fighting the takeover for a year.
Short-Term Profits
One of these was Stanwood (Woody) Murphy, son of the company’s former chairman, who charged that Pacific Lumber’s new owners are considering only short-term profits. “I’m a logger and I know there are places where clear-cutting is the way to do it, but Pacific Lumber is just doing it because you can clear-cut a lot cheaper” than they can selectively cut, Murphy said. “When they finish here it’s going to look like a moonscape.”
Other local residents fear that an economic bust will follow today’s boom at Pacific Lumber--the largest single private employer in Humboldt County, which suffers from chronically high unemployment.
“We’ve seen virtually every other (logging) company in the county go through a cycle of boom-and-bust when their old-growth ran out and their second growth was not available yet,” Humboldt County Supervisor Wesley Chesbro said. “There’s a lot of very real fear that Pacific Lumber will find themselves in that situation--with a loss of jobs, tax revenues, and economic benefits for the rest of the county.”
Pacific Lumber officials have denied that the increased harvest presents a long-term economic risk.
“We’re not going to run out of trees, and we’re not going to cut and run,” Galitz said.
Protest in Scotia
Earth First! tried to reach out to mill workers earlier this year by forming a tongue-in-cheek “Save the Loggers League” and staging a protest down Scotia’s main street. The League’s newsletter, with articles by “Paul Bunyan” and “Milldred Woodrose,” claimed that “one of nature’s noblest creatures, the Scotia Logger (Latin name: Sequoius devourus beerdrinkus) is being placed on the endangered species list” because of the logging increase.
Local loggers, though still cool to the environmentalists, are less antagonistic toward them than in the past.
“You start talking about parks and the normal mill worker gets a queasy stomach,” said Pete Kayes. “But when the needs are in common, you don’t worry if (the environmentalists) are crazy. You just say, ‘They’ve got a good point.’ ”
But the incipient alliance still has a long way to go.
“I agree with (Earth First!) that the accelerated harvesting is the wrong way to go at it,” Woody Murphy said. “But Earth First!’s a radical group, and a lot of that I just can’t associate myself with. (They look like) a bunch of college kids with ponytails. One guy looked like he got dragged out of a sewer pipe. You’ve got to look like the people you’re trying to convince.”
Whether the Maxxam takeover ultimately unites or further polarizes mill workers and environmentalists, it is clear that an era has ended in Scotia. The security traditionally taken for granted by workers has been thrown into question. And although company officials argue that “we’re the same guys here in Scotia” as before the takeover, Pacific Lumber’s image among environmentalists has been tarnished.
“The environmentalists always viewed Pacific Lumber as the example of good relations between a lumber company and its neighbors,” Chesbro said. Although other companies’ logging practices came under attack, “Pacific Lumber was pointed to as an example of it not having to be that way. If (the logging increase) was inevitable, it’s a very sad statement of how our economy operates in the 1980s. It further polarizes the debate over our economy if a company can’t afford to operate as a good neighbor.”
