EDITOR

Takeover of MacBlo
raises new concerns

he proposed takeover of MacMillan Bloedel
Ltd. by Weyerhaeuser Company raised a lot
of eyebrows when it was announced on June
21. It was the largest merger announcement
yet to hit the Canadian forest industry.
Weyerhaeuser is a big outfit. So big that
it’s $3.6 billion takeover of one of Canada’s
largest forest products companies doesn’t
even rate Weyerhaeuser shareholder approval. If the deal
goes through, MacBlo shareholders will swap and own
just 15% of the American corporate giant.

In a short 20 months the MacBlo president and CEO
Tom Stephens parachuted into Canada, sold off a third of
the company, eliminated 2,700 jobs, shortened the rota-
tions of logging on private lands, exported logs, and cut
deals with environmentalists to up shareholder value. He
will be filling his boots with a cool $13 million in salaries,
bonuses and stock options and will, no doubt, be moving
onto other assignments.

Left in the wake of the proposed Weyerhaeuser-MacBlo
deal are several issues. Will there be jobs eliminated?
What agenda will the company follow and will it attempt
to crack Canada open on the log export issue? And how
will Weyerhaeuser position itself on the issue of the
CANADA - U.S. softwood lumber quota agreement?

The I.W.A. reacted with “cautious optimism.” National
union leader Dave Haggard said that the union is con-
cerned about the impact that any increased corporate con-
centration will bring to Canadian workers.

He said that although Weyerhaeuser has no current _
plans to layoff people from the existing production facili-
ties, the union knows that mergers can result in the ratio-
nalization and elimination of jobs.

At the press conference announcing the deal Weyer-
haeuser CEO Steve Rogel said that the company, which
among its holdings, has 44 lumber mills in the United
States (and 10 in Canada) will take the least cost efficient
mills off line when forced. In British Columbia Weyer-
haeuser would become one of the powers to be recognized
on both the Coast and the Interior regions of the province.

In the province of Saskatchewan the company would
have a virtual lock on the forest economy, z ereataes all
important all phases of the forest industry.

On the issue of the softwood lumber agreement, Roger
said that in the past his company has been “aggressively
neutral.”

Other more revealing comments are that Rogel said the
company’s “basic philosophy is free trade,” and that the
company views Tom Stephens’ actions on the softwood.
lumber agreement (his quest to seek open log export mar-
kets and the privatization of lands as a remedy for lumber
export restrictions) as “aggressively positive.”

. Said Rogel: “We have made no decision with regard to
the SLA but that is on our agenda shortly. Our first
agenda is to get the (merger) deal done.”

As I.W.A. Research Director Doug Smyth pointed out,
what side of the softwood issue Weyerhaeuser will push,
and what position they go with will depend on how they
view their Canadian assets. If the takeover goes through,
nearly 43% of its lumber volume will come from Canada.

Will they lobby for an extension to the SLA prior to it
expiring in March of 1999 or lobby for “free trade.”

Some clues may lay in the fact that Weyerhaeuser has a
defined corporate position on log exports from private
lands. In fact more than one-quarter of its total exports of
forest products from the United States are raw logs. It
may be no mystery then, where they will come out on the
position of raw log exports from Canada.

The fact that Weyerhaeuser would acquire about
257,000 hectares of private lands from MacBlo, and that
there are no log export restrictions on private wood, would
complement their private land holdings in the Pacific
Northwest. Weyerhaeuser’s real estate division would no
doubt also be looking for other values from private lands
when population pressures grow.

Tt remains to be seen if they will be be viewed as good
corporate citizens in the years ahead or if they will come
out with positions detrimental to Canadian workers.

SOR. THE US.
1S PLAYING HARDBALL.

THEY WONT CONSIDER A
COMMON CURRENCY

FoR THE
AST TIME----,
Tele THEM THEY RE

LUIMBERUORKER

Official publication of the
Industrial, Wood and Allied Workers of Canada

MAN DAVE HAGGARD . . President
No E ees NEIL MENARD . . 1st Vice-President
HARVEY ARCAND . . 2nd Vice-President
DAVID TONES . . 3rd Vice-President
5th Floor, NORM RIVARD . . 4th Vice-President
1285 W. Pender Street | WILF McINTYRE.. . 5th Vice-President
Vancouver, B.C. TERRY SMITH . . Secretary-Treasurer

V6E 4B2
BROADWAY .a PRINTERS LTD.

UNLESS WE BRING
SOMETHING OF VALUE
To THE TABLE

|

NOT GETTING OUR
CANADIAN TIRE

Bp
PULL

DOT

EL WORKER,

TC

IWGRID RICE FOR THE LUNE:

OIE 14

North American dollar a further
threat to Canadian sovereignty

Only five years before the
Canada-U.S. Free Trade
Agreement took place it
wasn’t hip for a right winger
to talk about free trade. In
1983 Brian Mulroney was
vehemently against such a
thing — it would be the sell-
out of Canada! Then on Janu-
ary 1, 1989 the “free trade”
deal with Ronald Reagan’s
America went into effect,
after the hotly contested fed-
eral election between Mul-
roney’s Conservatives and
the anti-free trade Liberals.

Today the issue of a mone-
tary union with the United
States, a common currency,
isn’t hip to talk about either.
Neither Prime Minister Jean
Chretien (also opposed to the
FTA prior to gaining office in
1993), Finance Minister Paul
Martin or Bank of Canada
governor Gordon Thiessen,
will go near the issue. It’s just
not in the cards, they all say.

Remember what they said
about free trade.

A call for a monetary union
by Thomas J. Courchene of
Queen’s University in King-
ston, Ontario and Richard J.
Harris of Simon Fraser Uni-
versity in Burnaby, B.C. has
initiated debate on the topic.
Both professors, supporters
of the FTA in the 1980's, say
there should be a North
American Monetary Union
(NAMU). Courchene says
that the FTA has “advanced
the pace of economic inter-
gration” and that such a
union is inevidable. Harris
says that free trade and flexi-
ble currency rates are inher-
intely inconsistent.

Even right wing colum-
nists like the Globe and
Mail’s Jeffrey Simpson took
acception to such a notion
and has seemingly aligning
himself with economic
nationalists.

“Foregoing the Canadian
dollar either for the U.S. one
or for an newly created North
American dollar would in fact

, or in law (or both) place

Canada’s entire monetary
jolicy in the hands of the
.S. Federal Reserve,” wrote

the conservative columnist
following the June 22 release
of the professors’ paper by
the C.D. Howe Institute,
itself a well-funded conserva-
tive think tank.

“Once control over mone-
tary policy is lost to the
United States the drive for
harmonizing fiscal and social
policy accelerates. That har-
monization is is already
going on, as Canada adjusts
itself to continental integra-
tion. But whatever adjust-
ments are going forward now
would only be the harbinger
of ones required following
monetary union,” wrote
Simpson.

More conservatives spoke
out. In the July 5 issue of
Maclean’s magazine, editor
Robert Lewis sounded the
alarm: “If becoming de facto
citizens of the United States,
the inevitable outcome of
monetary union, won’t make
Canadians sit up and take
notice, nothing will.”

Lewis was astute in point-
ing out that the lead-up to a
monet union would mean
that Canada would be oblig-
ated to reduce its debt-to-
GDP ratio to be in line with
the United States’.

“Medicare and other social
programs, as a result, would
be sent to the chophouse,”
wrote Lewis. Meanwhile
south of the line, the Clinton
administration shrugged its
shoulders. And naturally
Alan Greenspan, the U.S.’s
Federal Reserve Board chair-
man (when he speaks people
listen!!) said that his country
would never cooperate on
anything with other nations
that would jeopardize its own
self interests.

No problem say professors
Courchene and Harris — at
the negotiation table for a
common currency give the
United States 12 seats, based
on that country’s regions, and
give Canada just one seat.
That would be a fair split,
according to the academics,
based on each country’s GDP.

And a former leading U.S.
trade negotiator, now a

Washington-based lobbyist,
William Merkin, says that
sharing a common currency
might cure the softwood lum-
ber dispute between the
Canada and the United
States. It might also wipe out
the Canadian forest industry
by eliminating a great deal of

the added competitive advan-
tage that it now enjoys witha
Jow Canadian dollar.

As Jeffrey Simpson points
out, all it takes is a couple of
big corporations to talk about
a common currency, for it to
become a hot issue.

Where will the debate
spring from next? Will it be
the Canadian Chamber of
Commerce, financed by such
multinationals as IBM, Gen-
eral Motors, or the Royal
Bank?

The Business Council on
National Issues, the coun-
try’s most well-financed pro-
ponent of multinational
interests and a champion of
both the FTA and the North
American Free Trade Agree-
ment, did a six month study
on the issue and decided not
to come public with the infor-
mation gathered in order to
avoid debate with economic
nationalists.

Listen to Paul Martin and
you'd think he’s on our side.
He says that Canada benefits
enormously by having its
own currency and that the
European Union can have its
own Eurodollar because the
economies in that region of
the globe are more equal and
no one power can dominate.

Canada’s and the United
States two-way trade was
about $564 billion last year
— most of that was U.S.
investment extracting
resources and goods pro-
duced by U.S.-owned compa-
nies operating in Canada to
be sold in the U.S., which
make up about 75% of this
country’s trade markets.

It’s a pretty safe bet that
when those U.S. interests
decide to push the common
currency debate, talk of a
NAMU will become hip.

LUMBERWORKER/SEPTEMBER, 1999/5