Archive for the ‘Smurfit-Stone’ Category

By CFS

Missoula is a fine city… a city I’m proud to call home because of its culture, people, neighborhoods, beer, scenery, architecture, etc.  I am one of those many thousands of people that are not “native” but were attracted here over the last three decades because of how great the Missoula lifestyle is and after nearly a decade of living here I feel like this is my hometown.  And so I hope you can understand my frustration when Missoula is derided as the basket case of Montana.

The argument heard over and over again from various people goes something like this; “Bottom line, the problem is Missoula is run and heavily populated by Liberals*,” originally from the evil, socialist, and morally corrupt state of California. Those damn hippies hate anyone who dares to try and start a business and, “are vocally anti corporate*”.  All these transplants are ruining Missoula for the Missoula natives; outsiders add to congestion, low wages, a bad job market, unaffordable housing, and worse government.  If only local government would get out of my bathroom, stop preventing me from getting from point A to B with all this traffic calming bullshit, and stop telling me how I can advertise my business Missoula would be a great place and Smurfit-Stone never would have pulled out.

I’ll attempt to address and dissect these complaints in an ongoing series about Missoula and will argue that Missoula’s liberal culture is perhaps its greatest asset and that many of Missoula’s weaknesses are in fact geographical in nature rather than political or cultural.

Lets start with the claim that liberalism is destroying Missoula economically.  Its perfectly true that Missoula is a transformed town from the mill-town it once was 30 or 40 years ago, but what western town or city hasn’t seen radical shifts in their economies?  Resource extraction, manufacturing, and the associated supporting infrastructure and jobs have seen major declines since the late seventies all across the country.  This isn’t because of liberals but because of capitalism… markets have been opened up and such industries are now mainly based in low wage countries in Asia.

So all you haters don’t blame liberals… blame other nations full of people working harder at lower wage rates… if only they would unionize we might get our jobs back.  The conservative blame game pointed at Missoula’s liberals comes out of frustration with change and an unknown future.  They see change all around them from the subdivision swallowing up farm fields and the mill jobs disappearing to the bike lanes going in all over town and they don’t understand where all this change has come from or where it will lead… so they lash out at the closest thing, local liberals.

Despite Missoula’s transformation and loss of old economy employment the town hasn’t been hit terribly hard economically through most of the last 40 years… in fact Missoula has experienced a higher rate of job growth than conservative leaning and business friendly Billings.  According to The Bureau of Business and Economic Research’s Montana Regional Economic Analysis Project Missoula experienced job growth of 216% from 1969-2008 while Billings job growth was 168% and Montana and National growth was a slower rate of 118% and 99% respectfully.  Average employment growth in Missoula beat Billings every decade since the seventies and thats with Billing’s boom in the oil and natural gas service industry.  Even in the current economic climate Missoula’s job losses have been less than those experienced in the early 80s, about 2.5% compared with about 9%.  Income growth has also outpaced Billings, with Missoula experiencing total personal income increase over the same time period by 318% as compared to Billings (273%), Montana (204%), and the Nation (228%) as a whole.  Not bad Missoula!

It is exactly because of Missoula’s more liberal and open culture combined with its recreational opportunities and lifestyle that has attracted such growth and not tax rebates and large corporations.  Economists Thomas Power and Richard Barret make a great case for the “New West” economy in their book Post-Cowboy Economies.   Their argument is that faltering industrial economies have opened up the west for new economic opportunities based not on resource extraction but on environmental quality, in-migration, recreation/tourism, and knowledge based services (finance, engineering, medical services, etc).  The old western economy and the new western economy were both mutually exclusive, unable to exist simultaneously within the same geographic space.  This new economy is bringing along more prosperity, wider ranging economic development, and booming growth as evidenced by the fact that the Mountain West was the fastest growing region in the 90s and aughts.

This “New West” economy has produced huge gains for Missoula.  Between 2001-2007 Missoula County saw net employment growth of 10,632, or 15%, with growth being the greatest in the professional and technical services (27%), healthcare (13%), arts/entertainment/recreation (44%), education (38%), real estate (70%), administration (41%), and finance (10%).  During that same time Missoula County’s poulation increased from 97,400 to 107,552, or 10.4%.

So yes… Missoula has experienced an amazing amount of change in the last several decades fueled mostly by in-migration and shifting employment and industrial sector growth.  Its utter poppycock that Missoula has a lousy economy even given the current situation.  Missoula has been a leader in many fields and has developed first class educational and healthcare services for our region that not only attract people to Missoula but also act as the area’s largest employers.

The recent closing of the last remaining mills in the area and the loss of Macy’s might play heavily within the communal psychology of Missoula but are largely beyond the control of locals.  While the loss of over 400 Stone Container jobs is a big loss and affects many families its a sign of strength and diversity that such a loss makes such a small dent in total employment.  Such local events are part of the process of resetting the economic playing field to allow capital to be freed from unprofitable economic pursuits.  New opportunities that are net yet in sight will come to occupy these vacant spaces.  We aren’t experiencing anything different from anywhere else in the country and are in far better shape than similar communities in the Detroit area or Phoenix suburbs.

So all you haters… get over the hate and embrace the closest liberal you can find and lets work together to bring Missoula into the future as a strong regional leader… otherwise suck on Missoula’s barm.

*Quotes from various local online comment sections

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by JC

I guess, what, the payroll for a year or two of Smurfit-Stone terminated employees is about equivalent to a $68 million dollar yacht? Maybe Sir Michael Smurfit, the “Monaco-based tax exile” can treat all of them to a good time severance leisure cruise for their sacrifice, or a game of golf at the “K-Club”.

RECESSION? What recession? Michael Smurfit, the Irish packaging tycoon, has bought a €50m (68.65 million US dollars) super-yacht, provisionally called Lady Ann Magee II. The former chairman of Smurfit Kappa, the paper and cardboard giant, expects to take delivery of the vessel, being built by Italy’s Codecasa, by next summer. The 213ft vessel will have five decks with a spa, pool, cinema, beauty salon, gym, massage room and sun deck.

Smurfit, whose family wealth was estimated at £398m in last year’s Sunday Times Rich List [#203 on Britain’s most rich list], is buying the boat despite a slump across the packaging industry. The Irish group’s former American arm, Smurfit-Stone, filed for bankrupcty protection in January, and International Paper, the world’s largest paper group, slashed its dividend by 90% this month to save cash [and pay for a yacht?].

I guess when you think Montana is a third world country, Michael Smurfit doesn’t really have to care what the local dispossessed think about his new new yacht. But then again, maybe the rest of us will pay attention the next time some international playboy starts buying up local industries so he can move up in the yacht owner’s “keeping up with the Jones'” club.

And how about  today’s Missoulian story about Smurfit handing out over $50 million in bonuses to execs while the company is still stiffing Missoula County for $1.8 million in back taxes? I guess his tax-free zone in Monaco is far enough away that when the flak hits the fan, all Sir Michael will be feeling is the wind on his face, sitting in the shade of his private palm grove, with his yacht(s) docked up awaiting a quick get away if need be.

How about Smurfit’s $654 million dollars in tax credits the company has/will receive for the last two years, and which some local folks hoped would save the Missoula mill?

Of course, guilt kicked in, and in an article laying out Smurfit’s cushy relationship with “Dollar Bill” Clinton, after not being able to sell the Lady Magee I, and taking possession of the Lady Magee II, he decides to sell one:

While he is seeking to resolve his business arrangement with Gannon, Smurfit has been cutting back on personal expenditure, selling Lady Ann Magee II, a €47m, 213-ft yacht built for him by an Italian shipyard. The businessman had intended to keep the yacht and sell the original Lady Ann Magee, a smaller vessel, for about €16.5m, but eventually decided to stick with his relatively more modest vessel.

Here’s the lowdown on purchasing the Lady Ann Maggee I, if you’re interested. It has some nice pictures of all the amenities that come with a life of luxury. Also at risk: Smurfit’s “K Club,” his exclusive golf & spa resort in Kildare, Ireland.

Poor Mr. Smurfit. Bought his new luxury cruise liner before he sold his old one, and now has two. Now he can’t keep the new one because the old one didn’t sell, and only gets to keep the old one (pictured below). His golf resort is losing money, too. Such be the life of those born with silver spoons in their mouths. But I guess when you live in tax exile in Monaco, it doesn’t really matter, now does it?

I say good riddance to those who would treat Montana as just another banana republic.
lady magee

(updated 2:36pm)

by jhwygirl

Keila Szpaller’s Missoula Red Tape has the story and the link to the SEC filing.

The quick and dirty: $2.8 million in bonuses to 5 executives, including one Missoula local. The total in 2009? $8.1 million in executive bonuses.

Maybe this is a question for the finance-reform knowledgeable: How does a business hand out $8.1 million in executive bonuses while it is under federal protection, via bankruptcy courts, from complete loss of its assets?

How is that even fair to the creditors?

What ever happened to a government “of the people, by the people, and for the people?

How can a corporation hand out those kind of bonuses, while sending at least two communities and states – Missoula, Montana and Ontonagon, Michigan – into a tailspin?

Smurfit owes Missoula County backtaxes, for crying out loud and they’re paying out fat bonuses? I wonder if they owe state taxes?

There’s something wrong with laws (not the courts) that allow that. Courts enforce the laws. This kind of shit shouldn’t be OK.

by Pete Talbot

The sad news out of Frenchtown has everyone speculating on the cause of the Smurfit-Stone closure. Here are some of the reasons given by misinformed wags:

— It was those damned environmentalists.

— It was the greedy labor unions.

— It was the potential rollback of “black liquor” tax credits.

Let’s tackle the environmental claim first. From the Missoulian’s online comments: “I hope all the tree huggers are happy … ” Tree huggers had nothing to do with the mill’s closure. There were sufficient amounts of wood chips, hog fuel and recycled cardboard to provide the raw materials to produce liner board. And with the congressional forest restoration/fuel reduction acts, it looked like there would be a continued supply. There just wasn’t an adequate market to generate the profit margin that Smurfit-Stone wanted out of the Frenchtown mill. Blame the damn invisible hand of the free market.

” … burdensome union rules and inflexible wage rates … ” (from a comment over at Missoulapolis). My understanding is the labor union did everything it could to improve efficiency, improve workplace safety and negotiate reasonable contracts. I suppose the union could have taken pay cuts to match the wages of third-world mill workers — something less than minimum wage — but is that the direction that labor in this country should go? And would management be willing to make the same sort of sacrifice?

And then there’s this gem over at Electric City Weblog: there’s a move in Congress to eliminate a tax credit for what’s considered an alternative fuel used at the Frenchtown mill. “Black liquor, a fuel produced from paper byproducts and a small amount of diesel fuel, qualified as an alternative fuel eligible for tax credits under legislation passed in 2007.” Black liquor could possibly lose its status as a blended fuel tax credit. Thing is, Smurfit-Stone had already filed for bankruptcy before it became eligible for the tax credit, so the POTENTIAL loss of this credit can’t be the reason Smurfit-Stone is closing mills.

Let’s focus on what can be done to help the displaced workers, not on scurrilous excuses as to why the mill closed. It’s time to think outside the (cardboard) box.

by jhwygirl

Roy Houseman, Jr., 28, filed for Ward 2’s City Council seat today. He is challenging sitting councilman John Hendrickson. Ward 2 is a 3-way race, with Cynthia Wolken also having filed

The name should be familiar to most – Houseman is President of United Steelworkers Local 885, the union shop for Smurfit-Stone. He’s a Great Falls native who moved to Missoula in 1999, attended and graduated from UM in 2003 with a degree in English Literature and Psychology.

Houseman is just the type of person we need on council: Young and energetic – full of ideas, and willing to work hard. I mean – how many 20-somethings do you know that would run for president of their union local? How many 20-somethings would run for council? Houseman certainly is no slacker – and I certainly look forward to someone with a vision towards a better future for Missoula.

Why is Houseman running?

“I love Missoula. It’s a great community that has given me a wonderful life. I met my wife here. We bought a house in October and the community has afforded me opportunities I would never have thought imaginable. If I can give back to a growing and changing city by assisting in the administration and oversight of Missoula, well I see no reason not to run.”

Sounds about right by me…

~~~~~
The other races?

In Ward 1, incumbent Dave Strohmaier is being challenged by Ryan Mortan, government affairs director for the Missoula Building Industry Association.

In Ward 3, incumbent Bob Jaffe is being challenged by John Quandt.

In Ward 4, Councilman Jon Wilkins goes unchallenged. That doesn’t surprise me much…even the great curmudgeon (me) has come to kinda like the guy. Not all the time, mind you – but clearly, Wilkins isn’t operating on his own personal agenda 100% of the time or even 50% of the time – and that is a good thing.

In Ward 5, incumbent Dick Haines is being challenged by Mike O’Herron.

In Ward 6, incumbent Marilyn Marler is being challenged by Kathy Greathouse.

by Pete Talbot

It started as a rumor but was confirmed by the Missoulian. Smurfit-Stone will continue its 10-day shutdown for another 30 days — to June 1.

That’s 280 people out of work in the Missoula area, for at least a month. Add that to what could be 369 Plum Creek layoffs (Ksanka mill in Eureka and Pablo mill closed, Evergreen and Columbia Falls being eyed for closure) and that’s a lot of unemployed Western Montana timber industry workers. Our sympathies to them and their families.

It should be noted that Plum Creek’s first quarter profits were $175 million but, obviously, not from the sale of timber products.




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