The Fight Over the Redwoods
The Fight Over The Redwoods
Abstract
Pacific Lumber Company, founded in 1869, oversees the careful maintenance and logging of the world’s most productive timberland. Pacific Lumber holds the last private forest of old-growth Redwood. In addition to it’s unique hardwood, the Redwood forest hosts an ecosystem supporting virgin ground never logged, and the endangered Marbled Murrelet. After being purchased in 1985 by the Maxxam firm and it’s owner Mr. Hurwitz, Pacific Lumber tripled logging volume and looked to log the previously privately protected Redwood forest. Due to the use of junk-bonds for financial backing, Maxxam Inc. needed to dramatically increase revenue streams to make interest payments which resulted in the reprioritization of business values. The health of the environment became second to the survival of Pacific Lumber. Poor business ethics led the timber company from a once highly profitable firm conscious of both the environment and long-term business stability, to one focused on short-term profitability without valuing the long term impacts of environmental change.
The Fight Over The Redwoods
Background
Pacific Lumber Company, founded in 1869, owned 220,000 acres of some of the world’s most productive timberland. The family-run company incorporated the very best standards for environmental impact and business management. Through selective tree cutting and management of business structure, the Pacific Lumber Company maintained the worlds rarest old growth redwood forest. Due to deforestation through the end of the 1970’s, Pacific Lumber Company held the last Redwood resource thereby indirectly monopolizing the hardwood market. The company was debt free, treated their employees well, and managed a significant inventory to support their sustainment operations. (Shaw, 2014)
In 1985, Maxxam Incorporated acquired Pacific Lumber for 900 million dollars. Through the use of junk-bond financing to purchase the
Abstract
Pacific Lumber Company, founded in 1869, oversees the careful maintenance and logging of the world’s most productive timberland. Pacific Lumber holds the last private forest of old-growth Redwood. In addition to it’s unique hardwood, the Redwood forest hosts an ecosystem supporting virgin ground never logged, and the endangered Marbled Murrelet. After being purchased in 1985 by the Maxxam firm and it’s owner Mr. Hurwitz, Pacific Lumber tripled logging volume and looked to log the previously privately protected Redwood forest. Due to the use of junk-bonds for financial backing, Maxxam Inc. needed to dramatically increase revenue streams to make interest payments which resulted in the reprioritization of business values. The health of the environment became second to the survival of Pacific Lumber. Poor business ethics led the timber company from a once highly profitable firm conscious of both the environment and long-term business stability, to one focused on short-term profitability without valuing the long term impacts of environmental change.
The Fight Over The Redwoods
Background
Pacific Lumber Company, founded in 1869, owned 220,000 acres of some of the world’s most productive timberland. The family-run company incorporated the very best standards for environmental impact and business management. Through selective tree cutting and management of business structure, the Pacific Lumber Company maintained the worlds rarest old growth redwood forest. Due to deforestation through the end of the 1970’s, Pacific Lumber Company held the last Redwood resource thereby indirectly monopolizing the hardwood market. The company was debt free, treated their employees well, and managed a significant inventory to support their sustainment operations. (Shaw, 2014)
In 1985, Maxxam Incorporated acquired Pacific Lumber for 900 million dollars. Through the use of junk-bond financing to purchase the
References: Biological Issue. (n.d.). Retrieved March 16, 2014, from http://averillbiology.blogspot.com/2011/01/redwood-trees-devastating-deforestation.html CHAPTER FOUR: ECOLOGICAL EFFECTS: THE TERRESTRIAL ENVIRONMENT. (1998). Environmental Management Handbook, 177-192. Shaw, W.H. (2014). Business ethics: A Textbook with cases, (8th ed.). Boston, MA : Cengage.