Behind the Lines

Hughes' Race Ways

A LOS ANGELES SUPERIOR COURT JURY has hit General Motors' Hughes Aircraft Co. with an $89.5 million verdict in a race discrimination suit against the company in October 1994.

 Jeffrey Lane, a former Hughes engineer, alleges he was denied pay increases and promotions at Hughes based on his race. Lane's lawyers argue that he was denied promotions from 1977 to 1991, despite being assigned to work on projects staffed by more senior, higher paid, white co-workers. When David Villalpando, a white supervisor and co-plaintiff in Lane's suit, complained to Hughes management, the company retaliated against Villalpando by re-assigning him, and against Lane by demoting him "in a manner calculated to embarrass him personally and professionally," according to the suit. A separate suit brought by Villalpando claims Hughes told him to produce false performance appraisals in order to justify the demotion.

 The jury ordered Hughes to pay $40 million each to Lane and Villalpando in punitive damages.

 According to a brief company statement, the verdict "was irrational, irresponsible and outrageous." Hughes indicated that it would appeal.

Mining Disaster in Chile

TWENTY-ONE MINERS WERE KILLED in a September 30, 1994 explosion in a Schwager Coal Company mine near Coronel, in central Chile. Miners blame the explosion on dangerous working conditions.

 The explosion and the resultant fire trapped miners in a gallery 900 meters below the surface. The workers were employed by Syam & Company, Ltd., which is renting different mining galleries from Schwager.

 A week after the accident, Schwager announced that its mining installations in the region would be closed and 220 miners would lose their jobs, prompting 320 miners to take over one of the galleries at the mine on October 11. Miguel Valencia, a representative of the miners, says his colleagues were willing to remain in the gallery, which is roughly 1,000 meters below the surface, until a solution involving the government could be reached. The miners agreed to leave the mine after 11 days, when an agreement to have the workers employed in other sectors was reached with authorities.

 The Schwager mine, which originally began operations in the mid-1800s, was incorporated into the state-owned coal company ENACAR in 1973 and then privatized in 1985. But depressed prices in the coal industry in the late-1980s caused massive layoffs. Schwager laid off the last of its 443 miners in March 1994 and has been renting out its installations to Syam and other companies since then.

Under their contracts, miners are required to work long hours at low salaries and are prohibited from unionizing. A mother of one of the victims who was killed in the explosion says her son used walking shoes while working in the mine and had to borrow his safety hat because Syam did not provide even the minimum protective clothing to the miners.

 "It isn't worth having a mining industry if so many lives are lost," says Concepción Archbishop Antonio Moreno, the ranking Catholic prelate in the region.


Pacific Lumber on the Block?

UNDER FIRE FROM ENVIRONMENTALISTS, a beleagured Charles Hurwitz, chairman and chief executive officer of the Houston-based natural resources company MAXXAM, is attempting to sell most of the company's Pacific Lumber assets, according to the Wall Street Journal.

 MAXXAM, in which Hurwitz maintains a 60 percent stake, purchased Pacific Lumber, the world's largest logger of redwood lumber, in a 1985 takeover financed mostly with junk bonds. To finance the debt from the takeover, the company doubled its logging rate of virgin redwood forests in California [see Ravaging the Redwoods: Charles Hurwitz, Michael Milken and the Cost of Greed," Multinational Monitor, September 1994].

Industry sources approached about the deal told the Wall Street Journal that "Hurwitz is weary of the pressure on [Pacific Lumber's] logging plans from environmental lawsuits, wildlife regulations and even Congress," referring to the Headwaters Forest Legislation introduced by Dan Hamburg, D-California, and Barbara Boxer, D-California, that would authorize funds for the government to purchase 44,000 acres of land Pacific Lumber intends to log.

 The proposed sale "seems consistent with MAXXAM's track record of buying a tract, logging it to hell and keeping the cream property for itself," says Jim Owens, director of the Washington, D.C.-based Western Ancient Forests.

MAXXAM refused to comment on the proposed sale.

Meridian's Sleight of Hand

MERIDIAN OIL, the largest U.S. producer and transporter of oil and gas, HAS BEEN SHORT-CHANGING the New Mexico and U.S. federal governments of tens of millions of dollars in oil and gas royalties, according to an October 19, 1994 article in the Santa Fe Reporter.

 Investigators from the Bureau of Land Management (BLM) found a "consistent pattern in which the company routinely underreported the amount of oil and gas it had produced and sold," according to Josh Kurtz, the author of the article. Estimated losses from six Meridian sites spot-checked by the BLM investigators are $3.9 million. Extrapolating from this figure, losses from Meridian's 1,073 federal oil and gas leases in the region would total $22.9 million.

 "The laws set oil and gas producers free to report what they've pumped and sold on an æhonor system,' with scant government scrutiny" said the article. "The big losers in this æhonor system' are the taxpayers of New Mexico."

 Representatives from the state of New Mexico BLM, federal BLM and Meridian refused to comment on the investigation.

 -Carolina Cabieses/Latinamerica Press and Aaron Freeman