Thursday, October 25, 2012

Job Creators


I used to like to go to work,
but they shut it down.
I got a right to go to work,
but there's no work here to be found.
And they say
we're gonna have to pay what's owed,
we're gonna have to reap from some seed that's been sowed.



Ontonagon, MI -- October 2011

There'd been a paper mill at Ontonagon MI for something like 90 years. In large part, that's why the community survived the 20th Century when so many other towns around the U.P. didn't.

Ontonagon MI -- October 2012

Smurfit Stone Corporation owned this mill, though they didn't build it and merely bought in late in the game. Right up to the end, the operation at Ontonagon turned a regular profit and was said to be the only paper plant in the State of Michigan to meet or exceed air & water quality standards.

After years of aggressively acquiring other paper companies, Smurfit Stone found itself saddled with crushing debt. When the economy collapsed the Company resorted to Chapter 11 Bankruptcy protection, seeking legal relief from it's bad decisions. This reinvention included closing the mill at Ontonagon, the largest employer in the County.

At the time, financial analysts at Credit Suisse wrote that this & another closure in Montana was good business, as the resultant lack of ready supply would help push prices up for packaging materials, thus increasing Company profit.

President and Chief Operating Officer of the Company Steve Klinger agreed, saying:

"These decisions were made to ensure the Company's long-term growth and profitability and do not reflect on the hard work and commitment of the employees at the Ontonagon mill."

With news of the closing, the community rolled up its collective sleeves and went to work, trying to line up investors to buy the facility. In Bankruptcy Court, the good citizens of Ontonagon petitioned the judge to prohibit the Company from destroying the plant and with it, perhaps their town.

"We don't want stimulus money. We don't want handouts. We have potential investors. All we want is for these people to have the right to make a decent living", wrote one.

Their pleas went unmet.

Smurfit Stone exited bankruptcy and promptly sold the mill at Ontonagon to a Canadian salvage company. 90 years of community investment in blood, sweat and tears, sold for scrap.


Two days later, Smurfit Stone announced it had sold itself to yet another paper company. As part of the deal, ex-CEO Patrick Moore received 59.5 million dollars. General counsel Craig Hunt was entitled to 9 million if he found himself unemployed. Senior V.P. Steven Strickland copped nearly 7 million.

Nice work, if 'ya can get it.

Today, where once beat the economic lifeblood of Ontonagon, there're only acres upon acres of mostly empty field surrounded by a high fence topped with barbed wire. This fallow ground is kept watch over by private security, hired by the Company to  protect its remaining interests in Ontonagon, whatever in the world those might be.


What's true is this:

According to law, Smurfit Stone owned the mill at Ontonagon. It was theirs to do with as they pleased, for whatever reasons they chose. And it was widely considered only good business for them to do what they did.

What's also true is this:

They didn't build that mill, they just bought it. And once they decided to abandon the place, by any reasonable moral standard if anyone had right of ownership over that mill, it was the community of Ontonagon, as theirs was a generational investment that can't be measured in dollars.

Now prime lakefront land on Superior stands fallow, future disposition undetermined.

An ex-employee told me there'll never be housing built on the land as before the environmental laws of the last few decades, lime and other toxins inherent to the milling process were dumped onsite -- creating both one more manmade wilderness on Superior's shore and leaving another sure sign of the legacy bequeathed by Capital when given free reign over our fate. Which along with a wide variety of poisons has left an entire region in poverty and despair.

What advocates for 'Job Creators' seem to resolutely ignore is that while (for example) a paper plant processes lumber down to salable product, without a community of workers it'd process nothing, ever.

Without workers, there'd never have been a mill in Ontonagon. Without workers there'd never have been product to sell to finance the debt Smurfit Stone used to acquire other paper companies and dig itself so deep into the hole it could only resort to creative destruction as a last, best resort to reap profit from its poor choices.

Without workers from this community absorbed a fatal hit to ensure some other operation could never come into Ontonagon and compete, the executives of Smurfit Stone wouldn't have emerged from bankruptcy able to sell to another company and secure great piles of personal wealth for themselves in the bargain.

As of the 2000 Census, the median annual income of the 786 households in Ontonagon stood at $28,300.  You can bet both the number of households and the income has shrunk since. At any rate, that's chump change, for those who managed to manage this place right into dust.

The good citizens of Ontonagon didn't want charity. They didn't ask for a handout. They simply asked for the chance to keep their town alive by maintaining a facility it's onetime owner no longer cared to own. That opportunity was denied them.

Creative destruction, the Job Creators call that. They say it reflects the best of who we are and is a good and proper thing. They say without we hew to this overarching purpose, we'd no longer be America.

I say it's history repeating itself -- with honest, hardworking folk getting hosed over & over & over again.

And the only real difference between this mill at Ontonagon and the Wolverine Mohawk or Nonesuch or the Cliff location or dozens of other similar sites, left by Capital to crumble where once they stood?

This being the 21st Century and not the 20th, the Company recycled its mistakes for cold cash on the barrelhead.

Which means that 100 years from now no one like me will ever stand near the fabled Ontonagon River amidst the mysterious ruins of long abandoned promises and wonder...

"How did this come to be?"

36 comments:

  1. Thank God you were able to document this tragedy. A most eloquent tribute to a heinous situation.
    Charlie Mayer

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  2. I've seen any number of hard things this past year. This is the one that finally broke me. It's enraging.

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  3. Sad. Sad. Sad. Sad. Sad. Angry! and sad.

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  4. You'd like to think we've learned some things since the 1880's but sadly, much is the same today as then...

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    1. Very well put. It sounds to me like the city and county of Ontonagon should be suing Smurfit Stone for the cleanup mess. When they bought the plant they alos bought the cleanup of the toxins.

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    2. It'd be nice to think the courts will offer some redress for the costs of eventual cleanup, but with citizens already paying for the "perpetual maintenance" of so many old industrial sites around the lake, it seems unlikely.

      Up on the Keweenaw at Torch Lake, basically what we've done is to cover the stamp sands with dirt & grass and call the job done...

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  5. Thank you for telling our story,we former employees feel that the goverment officals never really listened to us and did nothing to try to stop this from happening,sadly this is a sign of the times all over our country,and the rich get richer.

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    1. Thanks for reading the piece and for taking the trouble to comment. Of all the hard stories I've told this past year or so, this one was by far the hardest. It's gonna stick in my craw a long, long time.

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  6. Frank, This is the best summary of the whole Smurfit-Stone debacle I've ever seen. If your numbers (and my math) are correct, ex-Smurfit CEO Patrick Moore's $59,500,000 golden parachute for bankrupting the whole company, tearing down a perfectly viable paper mill, adding spiteful restrictive covenants to any future use of the denuded property, and devastating an entire community in the process, was more than double the annual income of all the households in Ontonagon. Well done good and faithful leader! There must still be a few old mill employees around town who will remember the rather surprising (at the time) words of advice from former mill manager Dan Potts on being promoted from the Ontonagon Mill to a position at Champion's headquarters: "Never trust those corporate bastards". Dan wasn't just a pretty darn good mill manager but, as it turned out, a prophet too.

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    1. It's tough to ignore just how profoundly that staggering cash reward paid out to people for running their business into the ground would have benefited the community, had it instead been paid out to those folk who were made to take the loss.

      The game is well & truly rigged. Corporate bankruptcy laws are written to protect wealth, not people. Short of lighting torches and taking up pitchforks, the best way we have to change the rules is to raise awareness through conversations like these, which might then lead people to better protect their interests, each and every time they go to the polls...

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  7. Ronald R. Johnson (formally of Greenland)January 26, 2013 at 10:39 PM

    This is just another one of them Corporate Raider in our land of Venture Capitalism. Find a property bleed it for every dime and then dump it. During the last Presidentual Election we had a candidate that built a Business Empire by doing this. But I notice that the good citizens of the County voted for the Corporate Raider. Didn't learn their lesson very well.

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    1. Folk regularly vote against their own interests. It's a curious thing. But as we're in such strident disagreement even as to what our shared interests are, I suppose it's to be expected.

      But here's the thing: in my travels around Superior I've met all sorts of people who've invested in ways to earn a living with the place as opposed to from it. I've seen enough to convince me that the entire conversation is changing and with that, the region.

      'Course, as that sort of change occurs over decades I'll likely not be around to find out if my good hope plays out but still, there're creative entrepreneurial endeavors being undertaken from the Soo to Duluth& pretty much all points between.

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  8. Is there no one who is willing to pick up this fight again and, as mentioned previously, get Smurfit to finish the clean-up or is it just too late? I would think not but what do I know... Seems completely justified.

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    1. There doesn't seem much chance of that. Industrial cleanup is left to the citizen's dime all across Superior's basin. Or isn't being done at all, for want of funding. You'd hope the courts would offer an avenue of redress and sometimes they do, but Companies excel at protecting their interests and it's tough to sue a corporate entity that's already been dissolved.

      I think before a shovel ever cuts the ground, the next mill or mining company or whoever that comes sniffing around a community's resources ought have to sign an ironclad pre-nup that protects the community's interests first, should the marriage later go south.

      In bankruptcy, there's a legal pecking order of creditors. Some people get paid first, some don't get paid at all. The folk with the most at stake, who risk more than money on the venture, the debt to them should be first in line at the pay window.

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    2. They sold it to a scrapper who then resold it to an Ontonagon County resident. So who now is responsible for the cleanup? The original owners 90 years ago or the current owner today?

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    3. The answer to who's responsible for cleanup is likely buried amidst a vast pile of legal paper, unless everyone still in existence indemnified themselves in turn along the way and in that case, it'd be us.

      I didn't know that the parcel'd been resold. It'd be interesting to learn what plans the buyer has for it, if any. It's a prime spit of land, necessary cleanup aside...

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    4. I worked in mining for years and whenever the properties were closed they had to put up cash (millions) to the state of Michigan for cleanup or had to have a covenant not to sue for the new owners when they purchased it, which was usually sold along with the property. I am sure that the paper mills has something like this as well and if some digging was done that there is money that was put up to the government that was to be put aside and that it is not residents money paying for cleanup. Someone just needs to know where to start to get to the right people, our legislators should be able to answer these questions or tell us who can. I too have been living in this beautiful county of Ontonagon for nearly 30 years and am sad to say I am currently unemployed and have had to make major changes in my lifestyle to stay and live here on one income.

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    5. Maintaining a fund for cleanup is a (relatively) recent concept. Invented during our lifetimes, I should think. Can't guess how that'd be applied retroactively, to operations that predate the mandate by decades. Have to wonder how many operations were 'grandfathered' in.

      All sorts of funds that are supposed to be held secure for specific purposes were in fact borrowed against or otherwise used by governments and corporations alike. Even if Smurfit-Stone set aside money with the State of Michigan, I'd be surprised to find the State hasn't spent it for something else.

      And if it's been spent then it's just gone and no two ways about it.

      You'd like to think your elected representatives would stand ready, willing & able to go to the mat over this or make plain to the community the reason why not...

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    6. "They sold it to a scrapper who then resold it to an Ontonagon County resident."

      Would someone please contact the current owner and ask where their plans are for the property? I'd be very interested as I too did not know that an Ontonagon resident currently owns the property.

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    7. I'd think the entire community would be interested in hearing even a rough outline of the new owner's plans. And should that person(s) turn up here, I'd be happy to provide a venue for that...

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  9. My husband worked at that mill for 17 years and we have since had to move out of a very close knit community that we loved. They way Smurfit Stone treated those employees, especially towards the end, was deplorable. Every month for month and months they told us the mill would start back up.....next month, dragging out the inevitable for much too long. We all held out hope because we loved living in Ontonagon so much. Then the unemployment starts.....to the tune of what equals $9.00 an hour, and then we hear of these huge bonuses the corporate "decision makers" were getting. I think that the people who made those decisions should have had to deliver the devastating news to these employees and their families themselves. See the faces of the people who are being affected, look them in the eye and tell them that this is the best option they could come up with.
    Anyone who lived, or frequently visited Ontonagon in it's "hay day" knew how great it was there. When we go back now, it makes us so sad. Stores are empty, mom and pop businesses that have been there probably as long as the mill, are closed. Streets are empty.
    I encourage everyone who reads this article to visit Ontonagon and see how beautiful it is there. It is right on the beautiful Ontonagon River and right on the shores of Lake Superior, it is a sight to behold.

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    1. I second the notion. But then, I too love the region...

      The saddest thing I saw all year occurred in the IGA when I overheard a guy my age telling a friend he'd finally gotten an interview with an outfit in Minocqua and maybe he'd be able keep his house in Ontonagon so that he could leave that to his kids someday and they could open a bed & breakfast, "or something".

      It's the "Or something" that really got to me, as the future of this guy's kids is irrevocably injured.

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    2. We also still have a house in Ontonagon. We are renting it out right now and have a for sale sign on it. It breaks my heart to sell it because my kids lived there all of their lives. Their lives are also irrevocably injured.

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    3. The injury done by the Company to this community is profound.

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  10. What baffles me is why wasn't Smurfit Stone held environmentally responsible? I mean it's one thing to sell & tear down but then to just walk away without any repercussions for years of environmental damage it just ridiculous.

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    1. The problem is finding out exactly who's responsible. Then there's the question of whether or not they can actually afford the cost of the cleanup, which is often prohibitive. That is, if the responsible entity is even still around.

      Smurfit-Stone, they're done. There'll be no squeezing blood from that rock...

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  11. This story is so well told by Mr. Hutton that I wonder if he's tried to get it retold in some of the bigger newspapers in Michigan or any national magazines. More people must hear of this. It's pure torment to see evil prevail, obscenely rewarding the villains while ripping the hearts and the livelihoods out of citizens of Ontonagon. The plutocracy wins again. Heartless bastards, indeed. william armstrong

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    1. Thing is, there've always been heartless bastards and no shortage of 'em. It's on the rest of us to keep their hands as much as possible away from the levers of power. And to not be heartless bastards ourselves, when it's our hand on those levers.

      Thanks for your kind words and to answer your question -- no, I've not yet gotten anything from the blog reprinted. Of course that'd be a fine thing but keeping the project moving in a timely fashion takes up pretty much all of me, so good word of mouth remains mostly what I've got going by way of promotion.

      Looking forward to spring when maybe I can be a fisherman again, just me & the Presque Isle...

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    1. Thank-you. Just trying to do my part...

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  13. Ontonagon will come back better than ever, justice is in the heart of this community and a new vision for us is now in our hands. Pray the Lord keeps us looking forward trusting in his justice.

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    1. Superior's always been a hard place to live, whether 1,000 or 150 years ago or today. It requires strength of character to survive it. That and the generosity of spirit I've encountered during my travels around the lake will serve as a source of strength & inspiration for me 'til the end of my days...

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  14. Your information about everything PRIOR to the demolition is accurate, but your information on what happens NOW after the demo is flawed. This property is NO LONGER OWNED by Smurfit Stone OR AIM's Corp. The mill site, along with the old Smurfit Stone Landfill are now BOTH owned by a LOCAL. You should talk to the new owner before you assume that these sites are to be forever vacant and unused.

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    1. It's important that I get facts straight, so thanks for the correction.

      When working the site in preparation for the essay, Smurfit Stone signage was still extant and while doing research I found no news regarding the parcel's most recent sale, so I as far as I could tell, there was no new owner to talk to. I later learned through this conversation thread that the property had since been resold and is now under local ownership.

      We're all wondering what plans that new owner might have for the site's future (including cleanup), so if you've any information to share as to that, please feel free to do that here.

      For certain, everyone interested in this subject could use a bit of good news...

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  15. "we're gonna have to reap from some seed that's been sowed"

    No truer words have been said in this post as these that precede it. Ontonagon the land of the secluded, "Keep out" they said and they did for they were not welcome.
    This was the way of the town for years as they looked to keep visitors from enjoying town and small companies from opening in it. When you push business away you do in fact reap what you sow which is an environment volatile to the business you do keep. Through a lack of business diversity and selfish behavior against those who provide revenue, the town itself dissolved under it's own policies. The demise of Ontonagon is the same as a meth addicts addiction to the very substance which causes their self destruction.

    The only thing keeping Ontonagon from coming back and thriving is it's complacency with it's anti-tourist, anti-small business agenda. For years they ignored the outside world and in return the outside world ignored them, you do indeed reap what you sow.

    Now for the good news, there are several people in the community that want to revive Ontonagon. They want to make it durable and everlasting with a sustainable combination of industry and tourism. Let's start farming, brewing, cooking, creating, and harboring these great people who can save this town. If you really love Ontonagon you will agree that there needs to be change from the old, to create the new, while preserving the history of the area. Here's to all of the people who are working hard to keep Ontonagon alive through diverse and sustainable business.

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    1. Many, many towns across the U.P. remain too insular for their own good. By and large, those are the ones that've failed along the way. My family in Bessemer goes back at least to 1883 and I'm there regularly, but as I've never lived there full time, I'll forever be considered an outsider to some.

      It's never made sense to me, that a community of its size so near the Porkies struggles as much as Ontonagon has.

      Unlike Bessemer and other landlocked towns, Ontonagon has the opportunity to remake itself into something sustainable for the 21st Century. It has the river and is right on the lake, so what's not to like, eh? There're good, working examples all around the basin for Ontonagon to follow and especially through my time at Dan's Cabin, I met all sorts of fine, honest folk laboring away day by day to try and transform the place, while keeping its many natural blessings intact.

      And with that, they build a foundation for sustainable success.

      So while much of what held the place back for so long still clings to it, I choose to believe that the community surrounding Ontonagon will eventually make a new way for itself because the only alternative is to embrace despair and that's no good option at all...

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