Maxxam Can’T Shake Its Enemies Company Changes Site Of Shareholders Meeting, But Steelworkers And Colorful Allies Will Be There
Rabbis would preach and environmentalists sing at Maxxam Inc.’s annual meetings past. But this week’s gathering promises to be a real show.
Nearly 250 United Steelworkers, most of them holding a single share of Maxxam stock apiece, are traveling from Spokane and other cities to attempt to change the Maxxam board that controls Kaiser Aluminum.
When Maxxam officials got wind of the Steelworker entourage, they moved the company’s annual meeting out of central Houston to a country club two hours north, so remote that the development never quite took off.
Maxxam - an aluminum, timber, real estate-development and horse-racing company - still owns neighboring acreage, but not even longtime analysts could capture a room at the exclusive resort for the shareholder meeting. No one will get through the door without clearing a metal detector.
And George Lucas couldn’t have dreamed up the cast of characters who will try: Maxxam investors, prominent Democrats and some of the company’s most tenacious enemies, including environmentalists, attorneys, national labor leaders and a grieving mother.
Among those going to Houston for an opposition summit beforehand: David Brower, the “Archdruid” or dean of the modern environmental movement who Outside magazine credited with rescuing the Grand Canyon, the North Cascades and Redwood National Park. He’s 86.
The labor-green coalition is then expected to move the assembly north for the annual meeting, which analysts say is among the nation’s most interesting.
“It’s the greatest show on earth,” said Darryl Cherney, an Earth First! organizer and veteran shareholder who says he’ll appear in costume.
Waging a corporate campaign
Theater aside, the coalition is intent on electing independent directors who would stand up to Maxxam Chairman and Chief Executive Officer Charles Hurwitz and change how the company treats the environment, labor and its shareholders.
“We think the company is in trouble,” opposition spokesman Scott Adams said.
The group is trying to elect two well-known Democrats to the closely-held Maxxam board: former Ohio Sen. Howard Metzenbaum and former federal judge and Clinton attorney Abner Mikva.
The effort is being led by the Rose Foundation for Communities in Oakland and David Foster, district director for the Steelworkers and chief union negotiator in the Kaiser dispute.
Maxxam controls 63 percent of Kaiser Aluminum. The Steelworkers have bankrolled an estimated $60,000 campaign to sway votes. They’ve launched a glossy mail campaign to 8,000 shareholders. They’ve taken out a full-page ad in the New York Times and hired Adams, a public relations specialist.
They’re being joined in their call for change by such powerful investors as the California Public Employees Retirement System, the New York State Common Retirement Fund and New York City Employees Retirement System, who back the outside director candidates.
The rally point is the Maxxam board that Business Week called one of the 10 worst in the country and a stock that trades at a fraction of its value.
“That’s partly due to Hurwitz’s reputation of putting his own interests ahead of investors as well as the regulatory hassles facing Maxxam’s Pacific Lumber unit and the depressing outlook for its majority owned Kaiser Aluminum business,” Forbes reported last month.
Pacific Lumber, for instance, has lost its timber operator’s license twice and has been cited for 128 violations of forest practices in the California redwoods since 1996. Kaiser Aluminum has lost more than $76 million in the last two quarters since the Sept. 30 strike.
The Rose Foundation has tried to elect dissident directors before, but this is the first time they’ve offered candidates of national stature, thanks to the Steelworkers.
“Could we attract someone like Metzenbaum before? Maybe,” Ratner said. “But let’s just say we didn’t have his home phone number. That’s the credibility the Steelworkers have brought us.”
For its part, the union is openly waging a corporate campaign against Maxxam to improve its bargaining position after being locked out in January.
For most of his career, Metzenbaum worked simultaneously as a labor attorney and successful businessman. Among his legacies in Congress: the nutrition label on supermarket items. Now 81, he heads up the Consumer Federation of America.
“I recognize the likelihood of being elected is small, but I’ve always been willing to step into a fight whether people thought I had a chance or not,” Metzenbaum said from his Washington, D.C., office.
“This is a matter of making a statement, and that there is a concern about the kind of leadership Mr. Hurwitz has given.”
In a statement to the Wall Street Journal, Mikva said the creativity that Maxxam should be using to maximize profits “is instead being used to push around unions, push around the U.S. government and push around environmental groups.”
In the last few days, Maxxam countered with its own campaign to shareholders attacking both candidates by calling their congressional records anti-business and their knowledge of the company nonexistent.
Individual Steelworkers and their coalition hold just .016 percent of the common shares of Maxxam stock. Hurwitz, with his family trust, holds 38 percent. Even with the combined shares of CALPERS and others, coalition leaders admit they have about a snowball’s chance in Houston of putting dissident directors on the board.
“It would require 80 percent of the non-Hurwitz vote and anyone who’s done electoral work can appreciate what a staggering percentage that is,” Ratner said.
But she says the fight has already been won because the campaign has focused shareholders’ attention on the company’s poor financial performance in a bull market and its costly fights with labor unions and environmental regulators.
“We’ve gotten a lot of what we want to get out of campaign, which is to change the way Maxxam does business.”
Into the woods
The campaign has certainly changed how Maxxam conducts its annual meeting.
Officially, Huntsville, Texas, 70 miles north of Houston, is the final resting place of Sam Houston, Texas patriot. Unofficially, it’s the execution capital of the world, the Texas state prison.
The contentious Maxxam meeting will be 27 miles outside Huntsville at the Waterwood National Resort and Country Club. Surrounding it: a rare remnant of an old growth forest containing 200-year-old pines, as well as oak, dogwood, pecan and sassafras trees, bald eagles and alligators.
Which is why when Maxxam offered 800 acres of the woods for sale last year, it was snapped up by George Russell, the forest practices chairman of the Lone Star State Sierra Club, a man diametrically opposed to Hurwitz and Maxxam.
Russell has opened his property - about 100 feet from the country club driveway - to the Spokane Steelworkers and environmentalists attending the events.
“He chose Waterwood to get away from the limelight of Houston,” Russell said. “But tactically, I think people are going to be more interested at Waterwood than if it were taking place in some anonymous skyscraper.”
The arrival of out-of-work Steelworkers and Earth First! activists is attracting the Texas Rangers, the elite branch of state law officers, who plan to attend the event.
San Jacinto County Sheriff Lacy Rogers is worried about the influx, too, although he’s hopeful it will be peaceful. The sheriff already has met with the Steelworkers from Spokane. He once worked as a Steelworker and now suffers from asbestosis as a result. Plus, he says, he’s known Cindy Allsbrook for years.
Allsbrook is the mother of Nathan David Chain, the 24-year-old Earth First! activist killed by a falling tree while protesting Maxxam’s Pacific Lumber clearcutting practices in California seven months ago.
“I was blown away that Maxxam was moving its meeting to this county,” Allsbrook said.
Allsbrook will speak at the week’s events along with her family’s attorney, Steven Schectman, whose law practice is devoted to suing Maxxam and its subsidiary, Pacific Lumber.
Meanwhile, Spokane Steelworkers are hoping the pressure will end a fight that they fear will ruin Kaiser Aluminum. A brochure being circulated claims that “Kaiser Aluminum is falling apart at the seams.”
It pictures Steelworkers protesting, as they will this week in Texas. “If Charles Hurwitz was your boss, you’d be angry too,” the caption reads.