Workers Take Case To Houston Steelworkers Protest Outside Maxxam Meeting

They stood out. In red, white and blue union T-shirts, United Steelworkers marched nearly two miles down the shaded walks of San Felipe Road on Tuesday, a human chain of banners, bullhorns and an occasional steel-toed boot into the silk-stocking section of Texas.

At the corner of Augusta, beneath the black and gray San Felipe Plaza office tower, they set up speakers, turned on the microphones and addressed the man on the 26th floor, Charles Hurwitz.

“Houston,” announced Steelworker Bill Harmon of Ohio, “we have a problem.”

Maybe more than one. An all-day conference could barely contain the list of alleged misdeeds and mismanagement that Steelworkers, environmentalists and politicians raised about Maxxam Inc. and its chief subsidiaries, Kaiser Aluminum and Pacific Lumber.

Together, the groups argue that an independent board of directors strong enough to stand up to Hurwitz, Maxxam’s chief executive officer, is the only way to hold Maxxam accountable. They cite poor financial performance, legal battles with regulators, 128 violations of California forestry laws, $78,000 in air pollution fines in Washington state and the lockout at five Kaiser Aluminum plants, which they call illegal.

“We must stop the culture of lawlessness and hold Maxxam accountable,” said David Foster, the United Steelworkers’ District 11 director who is also the chief union negotiator in the Kaiser dispute.

But it was the coming together Tuesday of the very groups involved that may prove a more powerful and lasting statement. Earlier in the day, the Committee of Concerned Maxxam Shareholders, an alliance between the Steelworkers and environmentalists, announced that two shareholder advisory firms recommended that their clients support their nominees to the Maxxam board - former Ohio Sen. Howard Metzenbaum and former federal Judge Abner Mikva.

“We believe the dissident group has a strong case,” wrote analyst Stephen Sears of Institutional Shareholder Services.

He said that Maxxam’s chief asset, Kaiser Aluminum, was not financially strong with a total debt 2-1/2 times the company’s current market value. Total debt to capital “has remained stable at a “whopping 92 to 95 percent for the last five years.”

Maxxam’s next largest asset, Pacific Lumber Company, “stands on the brink of losing its ability to conduct business in California (except through third parties) due to management’s inability to ensure the laws and regulations governing the pursuit of logging and lumber production in that state are followed,” Sears said.

But not since Ross Perot’s presidential run in 1992 has so much rhetoric flown in Texas. The California Public Employees Retirement System and the New York State Common Retirement Fund (retired public employees in 15 states invest in Maxxam) wrote a strongly worded call for change last week.

“We believe extraordinary efforts - the election of common, independent directors - are necessary to improve Maxxam’s lagging performance and raise the board’s standard of management.”

At the same time, Kaiser and Maxxam spokesmen pointed to analysts from Prudential Securities who, after a May 3 tour of Spokane plants, stated that a labor settlement is nowhere in sight and that productivity appears to be way up.

“While Kaiser initially suffered adverse impacts on profitability, we believe the situation has stabilized and that Kaiser can operate as profitably, if not more profitably, without the unionized workers,” wrote J. Clarence Morrison.

Another analyst, for Credit Suisse, wrote that Kaiser’s operating success with a significantly smaller group of replacement workers tilts the negotiating leverage in the company’s favor. “We see the union winning less and less as the dispute continues.”

Maxxam spokesman Joshua Reiss said Metzenbaum and Mikva would not be in the best interest of the corporation and that “we’ve communicated frequently, accurately and persuasively to the stockholders about the real events at Kaiser Aluminum, Pacific Lumber and Maxxam.”

As to the impact of 300-plus Steelworkers protesting on their doorstep Tuesday: “None,” said Reiss from inside the quiet office.

“Much ado about nothing.” said Scott Lamb, Kaiser spokesman.

But to the Steelworkers, it was about showing up and being counted. “The power comes in numbers. I thought one more person might make a difference so I came,” said Lina Bline, a millwright at Trentwood.

A Houston police officer sat in the Maxxam/Kaiser lobby and two other officers circulated in the hallways, but both Tuesday’s demonstration and one Monday at Hurwitz’s penthouse home were peaceful.

The locked-out workers had plenty of company in Houston, from Texas Congressman Gene Green to city firefighters and top union officials in Pittsburgh. But it was the Spokane Steelworkers who dominated the event.

Most of the union members attending were people who had worked between 10 and 30 years at Kaiser and their very longevity made it difficult for them to walk away even after eight months.

“This is affecting whole families,” said Pat Irvine, whose husband, Edward, son Ed, Jr., and two brothers are all locked-out at Kaiser. “I’m at that tough point, 25 years with the company and pushing 50,” said one Steelworker. “I’m in limbo,” Bline agreed.

Much of the discussion during the day-long demonstrations in the high-rent district of Houston echoed the fear of many middle-class Americans whose livelihoods are disappearing from the threat of globalization.

Lori Wallach, of Ralph Nader’s Public Citizen, drew a standing ovation for her speech on the effect of NAFTA and GATT with draining jobs and wealth from the U.S.

Rabbi Les Sharnberg, who heads the Jewish temple in Arcadia, Calif., noted that last year, shortly after Hurwitz earned a $12 million performance bonus, 100 Pacific Lumber workers who earn about $17,000 a year were laid off before Christmas. They were offered a chance to work again - as replacements at Kaiser Aluminum in Spokane.

“This is a human issue,” Sharnberg said.

The Steelworkers admitted that their new ties with environmentalists are viewed as opportunistic.

“Some would call it a marriage of convenience. I am not opposed to such marriages but I am opposed to such cynicism,” Foster said.

Indeed, even David Brower, the father of the modern environmental movement, noted that he had united with a woodworkers union in Washington state in the 1940s to help preserve Olympic National Park.

At “86.9 years old” he was asked to appear for inspiration, but he said the gathering inspired him. “This is making it possible for me to dream again of what the world might be like.”