Friday, March 21, 2014

Creative Destruction

There's not an abandoned place I've been to that doesn't cry failure, one way or the other.

Ramshackle schools are especially resonant. Where once there'd been prosperity and hope and people sufficient to build them, today there's only ruin.

After a while, patterns emerge. Then you sometimes wonder how they didn't know better, that it came to this?

Having done what I do a good long while now, anger over the way things too often were and the way things too often are is mostly kept to low simmer, lest I'd have been overcooked well before now.

Then at the very start of this project I visited Ontonagon:

Every time I'd been to Ontonagon, there was the Mill.

For as long as most folk still living had been alive, there was the Mill. Through good times and bad, whether belching at full capacity or near silent with layoffs, in Ontonagon there was the Mill.

Suddenly, there wasn't.

I captured a few images and of necessity moved quickly on, figuring I'd learn more later. It wasn't until near the end of the fieldwork that I did. During my presentation at the Porkies, I asked those assembled what happened to the Mill.

And for the only time during all the fieldwork, even considering the Penokees and North Hibbing and the Painesville School besides, I grew furious.

Because what's true is that if we're still not smarter than to let things come to this, we'll likely fail...

Job Creators (Revised)

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 of 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:

The Company 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, apparently held in local hands but under restrictive covenants, 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.

If true, that creates both one more manmade wilderness on Superior's shore and leaves another sure sign of the legacy bequeathed by Capital when given free reign over our resources. 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 t it could only resort to creative destruction as a last, best resort to reap profit from its investment.

Without those workers from this community absorbed a fatal hit to ensure some other operation could never come into Ontonagon and freely 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.

They never had a chance.

Creative destruction, the Job Creators call that. They say it's a good and proper thing and reflects the best of who we are. They say without we leave the Invisible Hand do its thing, we'd no longer be America.

I say that's just foul history repeating itself -- with honest, hardworking folk getting hosed over & over & over again in the bargain.

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 have the opportunity to wonder...

How is it they didn't know better, than to let it come to this?

No comments:

Post a Comment