Corporate Profiles


The Tree Whackers

FOR OVER A HUNDRED YEARS, the Weyerhaeuser family name has been synonymous with timber sales. In its perpetual search for new and cheap sources of wood, the company has plotted a course from the former forests of the Midwest, across the Pacific Northwest and into Canada, through the southern United States, and finally beyond the shores of North America into Southeast Asia and Latin America. Along its journey, Weyerhaeuser has left a path of ecological destruction, environmental violations and depressed economies. Early in his career, Frederick Weyerhaeuser, the corporation's founding father, earned his reputation as the classic "cut-and-run" timberman. Over the years, the company has refined but not fundamentally departed from Frederick Weyerhaeuser's exploitative strategy, while spending millions to revamp its corporate image.

Weyerhaeuser has come to be known as one of the world's shrewdest timber companies, having developed sophisticated public relations campaigns - including a television advertising campaign to gain recognition as "the tree-growing company" - to allay public concerns over the ecological impacts of the company's patented clear-cutting techniques.

But environmentalists familiar with the company's record say its actions do not match its green rhetoric. Mark Floegel of Greenpeace International's pulp and paper campaign says, "Weyerhaeuser is like the rest of the industry. It's just somewhat more sophisticated at painting itself as environmentally sound." Robert Rubovits, research associate at the Council on Economic Priorities (CEP) notes that, "like a lot of large companies in the last few years, Weyerhaeuser has jumped on the environmental bandwagon, touting the fact that it set up tree farms and has supported other environmental programs. That tends to gloss over the company's record with a big green brush."

Weyerhaeuser is the world's largest private owner of timber land, the largest producer of lumber and a leader in the production of cardboard, packaging and disposable diapers. The company currently has timber operations or offices in 44 U.S. states, owns six million acres of forest land in the U.S. South and Northwest and has a long-term license to 13 million acres in the Canadian provinces of British Columbia, Saskatchewan and Alberta.

Can't see the forest company for the trees

 Consistently ranked in the Forbes 100, Weyerhaeuser's tentacles reach far and wide. Family members, and the families of Weyerhaeuser partners, have owned and managed dozens of timber companies, from Weyerhaeuser Timber (and other proudly- labeled spin-offs), to the Potlatch Company and Boise Cascade. Forbes magazine estimated in 1988 that the family was worth well over a billion dollars.

 Although it is a multinational actor in both its exploitation of resources and its sales, the U.S.-based Weyerhaeuser has been careful to distance itself from its international operations. According to Mike Walters, Weyerhaeuser's director of external affairs, the company has "no manufacturing operations in any foreign countries." Walters adds, "This has pretty much always been the case."

A close look at the international timber industry, however, reveals a series of international corporations formerly owned by Weyerhaeuser or run by former Weyerhaeuser employees that have as their sole purpose the supply of wood to the company, as well as Weyerhaeuser affiliates in Canada, Germany, Belgium, Italy, France, Greece, Spain, England, Guatemala, Venezuela, South Africa, Hong Kong, Russia, Japan, China, the Philippines, Malaysia and Indonesia.

Environmentalists charge the company is a major importer of tropical hard woods. Walters denies the claim, stating, "We don't harvest tropical hardwoods, nor do we buy trees that someone else has harvested." The San Francisco-based Rainforest Action Network (RAN), however, has called for a boycott of Weyerhaeuser because of the company's alleged hardwood timber trading. Pamela Wellner, tropical timber campaign coordinator for RAN, says, "After the boycott began, the company's Indonesian operations were sold to Chesapeake Hardwoods. Weyerhaeuser remains a buyer through that company, but now we are unable to get a clear idea of the volume it imports."

It is by no means accidental that Weyerhaeuser's holdings are not easily traceable to the parent company. The corporation has managed to separate itself from its international subsidiaries through a series of carefully planned divestments. According to Wellner, "there's no way to get the full scope of Weyerhaeuser's involvement in other countries, whether it's operations, use of products or imports. The company has become expert in hiding its trail."

 Chesapeake Hardwood in Indonesia is an example of a Weyerhaeuser front corporation. It was named for a Weyerhaeuser plant in Chesapeake, Virginia which produces wall paneling that has tropical hardwood as its main material. In 1989, Chesapeake was "sold" to a newly-formed affiliate of the Indonesian Kalimanis group. Weyerhaeuser managers remain at the helm, and Weyerhaeuser remains a major customer and distributor for the new company.

Other major Weyerhaeuser subsidiaries in Southeast Asia and the Pacific include the Philippines-based Capricorn Corporation; Kennedy Bay Timber, Pacific Hardwoods and Silam Forest Products in Malaysia; and Weyerhaeuser Far East Ltd., based in Hong Kong. In the 1970s, before Weyerhaeuser switched to using subsidiaries to supply timber, Weyerhaeuser's Indonesian division operated as the International Timber Corporation of Indonesia. Pacific Hardwoods, a member of the Timber Exporter's Association of Malaysia and the Malaysian Plywood Manufacturers' Association, was the fourth largest sawn timber exporter and the fifth largest plywood exporter from Malaysia in 1991. In 1990, Pacific was the second largest plywood exporter from Malaysia.

Growing an empire, then cutting it down

 Timber provides over three-quarters of Weyerhaeuser's sales, which doubled during the 1980s to more than $10 billion per year in 1988 and 1989. Timber, however, is no longer Weyerhaeuser's only product. The "tree-growing company" is now truly diversified, and is parent company to at least 110 major subsidiaries. These corporations range from the Energy Holding Company to the Golden Triangle Railroad to the Bahamas-based de Bes Insurance Company.

Through its diversification efforts, Weyerhaeuser has moved into many timber- related industries. The company's Westwood Shipping Company runs log, lumber and container cargo from the Pacific Northwest to Japan and Korea. Weyerhaeuser Information Systems, which began as the company's data processing department, now sells professional services, information systems, disaster recovery and manufacturing systems around the world. District and municipal courts in Washington state, along with corporate customers, use Weyerhaeuser-designed computer systems.

 Weyerhaeuser Mortgage is one of the five largest mortgage-banking companies in the United States, with over $11 billion in loans in the late 1980s. A dozen Weyerhaeuser real estate subsidiaries, operating in the District of Columbia, Washington, California, Nevada and Florida, often building houses or office parks on cut-over land, are among the top 10 home builders in the United States, with sales over $1 billion in 1989.

During the real estate boom of the 1980s, Weyerhaeuser expanded its cut-and-run strategy to include a "cut-and-pave" component. Real estate developments, developed by subsidiaries such as the Quadrant Corporation, became more valuable than lots replanted with the company's genetically altered Douglas firs. "It's ironic to see such a barrage of advertising from Weyerhaeuser as the ætree growing company' when it is at the forefront of forest conversion," says Jeff Parsons, Washington state issues coordinator for the National Audubon Society. "Taking timber out of production is not very consistent with the image Weyerhaeuser is trying to put forth."

Meridian Campus and Northwest Landing, two of the many developments planned by Weyerhaeuser, sit at the southern end of Puget Sound in Washington state. When completed, they will include 9,300 houses and apartment units on 4,000 acres, and have projected populations of 21,000 people. One of the developments will engulf the 600 residents of the town of Du Pont. Both will damage the Nisqually River Delta, one of the last relatively intact estuaries in Puget Sound and the site of a National Wildlife Refuge. Weyerhaeuser has also leased 344 acres of shoreline nearby for what could become the largest sand and gravel-mining operation in the state.

 Throughout the Pacific Northwest, Weyerhaeuser's developments have come under fire at land-use hearings. Weyerhaeuser plans to develop 2,000 residential units, retail and office parks and two golf courses within sight of Snoqualmie Falls, a sacred site for the Snoqualmie tribe. Although Snoqualmie Falls is the first cultural site recommended by a Washington State panel for inclusion in the National Register for Historic Places, Weyerhaeuser is moving ahead with its development plans.

Political roots

 Weyerhaeuser political action committees (PACs) donated at least $319,342 between 1985 and 1990, mostly to Republican candidates. This figure does not represent the full extent of Weyerhaeuser's political contributions, since the National Forest Products Association and the Northwest Pulp & Paper Association, in which Weyerhaeuser holds memberships, also gave many thousands of dollars.

Like many large corporations, Weyerhaeuser has worked to foster close relations with politically powerful individuals. These friends have served the company well during the last several years of debate on timber cutting in old growth forests and the enforcement of the Endangered Species Act.

 George Weyerhaeuser, a Yale '49 classmate of George Bush, visited the White House shortly before the Bush administration removed private timber holdings from the list of areas required to provide endangered species protection for the spotted owl. Weyerhaeuser, whose company owns a third of a million acres that could have been placed off-limits to timber cutting, denied his visit had any influence over the decision.

 The governor of Washington, Booth Gardner, is a multi-millionaire heir to the Weyerhaeuser fortune. Gardner was declared exempt from a 1972 Washington state voter initiative requiring public officials to disclose their financial assets; the public disclosure commissioners, who are appointed by the governor, have renewed the exemption each year. Weyerhaeuser currently owns 1.5 million acres of forests in Washington state.

 The company has also maintained close ties with the first administrator of the U.S. Environmental Protection Agency, William Ruckleshaus, who has been a director and vice president of Weyerhaeuser.

Cutting jobs

 No company is more cynical in its exploitation of jobs-vs.-the-environment sentiments than Weyerhaeuser. "It suits Weyerhaeuser to jump in when emotions run high," says Audubon's Parsons. "Meanwhile, the company is leading the way in mechanization, exports and forest conversion." While loudly blaming environmentalists for destroying the economic base of rural forested communities, the company has worked diligently to automate forest-cutting and lumber-processing operations in an effort to eliminate those same jobs. Simultaneously it has stepped up its shipments of raw timber to countries such as Japan, thus further reducing the need for mill workers in the United States and Canada. The extent of Weyerhaeuser's exports has caused the company to be banned from bidding for timber on national forest land in Washington and many areas of Oregon.

About 6,000 Weyerhaeuser loggers and millworkers are unionized. Following a bitter strike in 1986, Weyerhaeuser won concessions equal to a four dollar per hour per worker cut in pay. Other forest products companies followed Weyerhaeuser's lead and also forced workers to accept cuts. Following these wage cuts, Weyerhaeuser profits rose from $277 million in 1986 to $564 million in 1988.

 During the past four years, as part of a corporate restructuring, Weyerhaeuser has laid off more than 8,000 workers. "A tremendous amount of salaried people were let go," says Don Truax of the International Woodworkers Association. "It was basically, æIf you're over fifty, you're out the door.'"

The jobs Weyerhaeuser does provide can be extremely hazardous. Logging kills five times more workers in Washington state than heavy construction, the second most deadly occupation. According to a 1991 Essential Information report, Weyerhaeuser is among the worst abusers of Occupational Safety and Health Association standards, ranking third in number of violations per 10,000 employees from 1977 through 1990.

Cutting costs, denting profits

 In an ironic twist, environmental and safety problems, often the result of cost- cutting measures, are beginning to dent Weyerhaeuser's profits. In 1991, Weyerhaeuser reported its first loss since the 1930s Depression. It placed much of the blame on plant closures, environmental clean-ups and severance for laid-off workers. This year, in an effort to avoid environmental liabilities, Weyerhaeuser is in the process of suing Aetna and other insurance companies, claiming that its insurance policies should cover the costs of environmental cleanups at 42 Weyerhaeuser sites throughout the United States.

 Weyerhaeuser spends millions of dollars on radio spots and full-page newspaper advertisements extolling the benefits of industrial, intensively managed "forest" operations, and the virtues of "tree-growing." Not surprisingly, it fails to mention the costs to communities and ecosystems once clear-cutting comes to its logical end.

 For more than 100 years, the forests of the United States, Canada and, more recently, Southeast Asia and Latin America, have absorbed the costs of the Weyerhaeuser cut-and-run program. With less than 5 percent of U.S. old growth forest still standing, and tropical forests around the world being rapidly destroyed, it seems unlikely the family tradition can continue much further into the future.



Clear-Cutting is Not Enough

A COUNCIL ON ECONOMIC PRIORITIES (CEP) report on Weyerhaeuser, released in June 1992, documents environmental violations in British Columbia, Mississippi, North Carolina, Oklahoma, Washington and Wisconsin, and lists 13 Superfund sites at which Weyerhaeuser is a potentially responsible polluter. According to Robert Rubovits, a CEP research associate, Weyerhaeuser is most outstanding for its failure to comply with air and water quality standards and its "consistent violations of permits for emissions, standards and limitations." Weyerhaeuser's far-flung enterprises have repeatedly brought it into conflict with the law.