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A month ago I wrote a column advocating that we create and maintain a regional memory of the NYCO amendment process and all that comes from it. My argument is that by doing so we will be better able to prevail in future battles against amendments that propose to take from the Forest Preserve for private gain. At the end of that column I said my starting point would be to ask who NYCO really is, in contrast to the picture of NYCO given by its own claims, by pro-amendment advocates and by popular assumption.
At the moment we need no assistance recalling the amendment controversy since NYCO is once again all over the regional news. With the dual stories that NYCO is seeking to expand its two existing mines and that environmental groups have sued to stop test drilling on Lot 8, any profile of NYCO is not only important in chronicling the amendment process, it is relevant right now. NYCO is making certain claims, environmental groups are making others and the state of New York still others. That means the question I pose today matters, today: who is NYCO?
Let me be clear about one thing: it is not my intention to portray NYCO as some sort of negative or evil entity. NYCO is a corporation, neither good nor evil. It is the workplace for many people who are as good as you or me. It generates economic benefits and it provides a variety of important products. But in the complex world of multinational corporations and all the good, bad and ugly that comes from that world to our doorsteps and the doorstep of the Forest Preserve, it bears knowing who or what we are really talking about and what claims are true.
Let’s remember some of the claims we heard in the arguments supporting the NYCO Amendment, some of which we are now hearing again (and please remember that NYCO is not responsible for all the claims made on its behalf). For the purposes of this article I’m only listing claims that pertain to NYCO itself, all of which have been presented in the media over the last few years:
Claim One: NYCO is a local company headquartered in Willsboro. It has been there for more than sixty years and employs about a hundred people.
Claim Two: The amendment will support and preserve local jobs
Claim Three: The NYCO mines in New York are especially important because they are one of the few existing sources for wollastonite (in fact the New York mines are the only active wollastonite mines in the United States). NYCO produces a significant portion of the world’s wollastonite from its New York mines
Claim Four: NYCO needs the Lot 8 expansion because existing mines are running low
Claim Five: NYCO is a good corporate citizen and is environmentally responsible
By listing these claims I am not suggesting they are false. In fact in my research I have learned that some of them are partly or entirely accurate. But some are a matter of interpretation and some are misleading or even untrue.
Let’s examine these claims. Sources will be listed and/or linked to as I go.
Claim One – NYCO is a Local Company
From NYCO’s own web site we learn that NYCO was founded in 1953 in Willsboro and Willsboro is still its headquarters. Multiple media sources report that NYCO employs roughly 100 people locally. So Claim One appears to be true.
But “local” is misleading. NYCO is a wholly owned subsidiary of a massive multinational company based in Greece, S&B Industrial Minerals, which acquired it in 2012. According to its web site S&B has 26 mines, 46 plants and 26 distribution centers, with employees and sales in 75 countries and 5 continents. NYCO’s contributions factor into revenues, profits and overall corporate health of an organization that is by no measure local.
At the time I did this research, S&B’s financial reports were available through the first nine months of 2013. According to those reports profits were down from 2012 to 2013. Profits for the first nine months of 2013 were $7.14 million dollars versus $21.9 million dollars for the first nine months of 2012. S&B operates in a very complex set of markets and completed a major acquisition in 2012, so variances in profits are not unexpected. In 2013 European stock analysis firms were forecasting S&B to maintain steady performance and had a hold recommendation. The NYCO purchase contributed revenue but acquisition costs and depreciation gave it an overall neutral effect so far.
Basically NYCO is a small piece of a much larger organization and its fortunes and impacts cannot be considered primarily from a local standpoint.
This gargantuan multinational aspect is often overlooked but should not be. S&B could make a business decision tomorrow to consolidate operations that would mothball mining in the Adirondacks. According to both industry publications and US Geological Survey annual reports the market for wollastonite has been greatly affected by the economic downturn and could be rebounding with growth in the low single digits. But Wollstonite is only one of dozens of minerals mined by S&B.
Consider also where profits from our hard-won Adirondack wollastonite go. Some portion of revenues may benefit our local communities, but overall profits funnel up the hierarchy and out of the country. Like all large multinational companies S&B is much more capitol intensive than smaller, local businesses.
Claim Two – The Amendment Will Preserve local Jobs
This claim is speculative by nature but some factors can be weighed.
It seems obvious that if more wollastonite is mined more employee hours will be used, thus jobs will be maintained. But once again the fact that NYCO is part of a much larger organization makes this calculus considerably more complicated. People who supported Amendment 5 may very well have thought about those 100 local employees. They probably did not think about or even know about about S&B’s 1,983 employees. NYCO accounts for less than 10% of S&B’s human capital. There are myriad factors beyond what’s in the ground at Lot 8 that will determine long-term employment at S&B and almost all of them have nothing to do with Amendment 5.
NYCO could be sold as an asset at any time. Indeed NYCO has been part of the acquisition game more than once. In fact S&B did not technically acquire NYCO in 2012. It acquired Rolling Rock Minerals Inc, a U.S. investment firm based in Denver that had previously acquired NYCO.
There is no indication that there are any plans by S&B to eliminate jobs in their New York operations. But as we’ll see next week, the claim that their Adirondack mines harbor a significant portion of the world’s wollastonite is false. In fact the Adirondack holdings are not even close to the largest mine NYCO itself has developed. Given the size and multinational nature of S&B plus the fact that the world supply of wollastonite dwarfs the reserves in the Adirondacks, it seems probable that the decision as to whether and when jobs are created or eliminated here will not be local.
Next week we will explore the remaining claims in detail.
Photo of wollastonite courtesy Wikipedia
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Pete:
I think the jobs issue affected many voters supporting the NYCO plan, and, unfortunately, I can’t see the logic for your dismissal of this concern. I had understood Wollastonite available for mining at current Willsboro sites was becoming depleted, that mining would cease in the next few years without access to additional ore.
No doubt, as you suggest, other business and market factors might affect employment in Wollastonite extraction, refinement and shipping, but access to the raw ore seems a straightforward, absolute and rate-limiting factor affecting continued operation of NYCO in Willsboro. I cannot tell from your discussion of the “jobs” issue whether or not you believe rejection of NYCO’s proposition will mean loss of access to ore and thus the end of Wollastonite extraction in this area in the next few years, and consequent closure of NYCO’s Willsboro operation. If this issue is about closure, or not of NYCO it is clear that the issue is about a potentially a great harm to Willsboro’s economy and the well-being of many of its residents. This is hardly the only or necessarily the most important factor relevant to this issue, but knowing whether it obtains, or not is certainly important to may of us with interest in this matter.
Whether employment opportunities should ever compromise fundamental principles of conservation/preservation is one thing, but a first step is determine whether there is a jobs issue here or not. Is there?
I also suspect that as a subsidiary of a foreign corporation it is probable that much/all of their profit is ‘off-shored’ to minimize taxes to this country.
To Mark I say, read the forever wild clause. There is no exception for creating/preserving jobs. If we are going to approve projects and transfer lands on that basis the idea of holding lands in a forever wild status is dead eaten away one amendment at a time.
I get it Jim. The whole slippery slope. No need to chastise for my simple asking of a question. I’m only wondering whether denial of the amendment will result in closure of NYCO in the near future. Maybe that would be a good thing. End the nasty bad profitable enterprise in the forever wild. I can see that. But I don’t think those hundred employees averaging $50K per year would be able to replace there jobs with work as summit stewards – but maybe the whole jobs issue is just a straw man. Suck it up, Willsboro. Become bloggers!
Speaking of straw man, “foreign corporation” certainly is one – how many of us drive a car, listen to a radio, diddle with a smartphone not made by one?
I just want to know the facts relevant to the matter. Is wollastonite currently available to NYCO running out, or not?
Pete, it seems to me that your dismissal of the jobs issue skirts the matter of whether wollastonite currently available for extraction is sufficient for long term continued NYCO operations. It is my understanding that it is not. But I have trouble finding the facts on this important term in the equation. That NYCO is a subsidiary of a multinational corporation sheds no light on this issue. it merely affirms that the economy is global. And whether other wollastonite reserves in Mexico or elsewhere can take up the slack if Willsboro shuts down isn’t germaine to concerns about the well-being of a small Adirondack town.
Surely as you point out, many market and business factors might affect NYCO activity at the Willsboro site, but exhaustion of wollastonite available for extraction would unequivocally, finally, and substantially remove jobs and money from, and cause harm to the people of Willsboro.
Can I assure my friends in Willsboro that the blockage of NYCOs amendment will not by itself affect the future of NYCOs wollastonite operation beyond the next year or two? Employment/economy should not be the only or predominant factor in decisions about use of Park Lands – I doubt many would dispute that idea. But if that lovely town and its sweet people suffer as a result of NYCO closure owing to a blockage I supported of the NYCO amendment, I wouldn’t want to have to say: “gee, I didn’t know THAT would happen”.
Your clarification on the objective evidence on this question would be helpful to me.
Mark Gibson
Mark (et al):
My next piece in the series will deal with the question of how much wollastonite there may or may not be in these mines and in the rest of the world at large.
Pete
Oh, yes, WHO is NYCO? I forgot that we must use George Orwell’s “Newspeak” now. Must remember that corporations are people. Must remember that corporations are people. Must remember that corporations are people. Must remember that corporations are people. Must remember that corporations are people. Must remember that corporations are people. Must remember that corporations are people. Must remember that corporations are people.
Mark Gibson,
In June 2012 Adirondack Wild hosted NYCO’s President and CEO for a group conference call as the NYCO amendment was first broached in the Legislature. From my notes of that call:
NYCO says it plans to apply to DEC and APA this year to expand its current drilling and exploration for minerals to the south of the Seventy Mine site on lands it currently owns. Second, Oak Hill is an APA-DEC permitted site owned by the company just east of Seventy Mine with what NYCO estimated in 2009 is a 15-20 year reserve of wollastonite. The quality of mineral there is very good, said Mr. Goodwin, but compared with Forest Preserve (Lot 8) there is more overburden to remove in order to access it. If the amendment does not go forward, Mr. Goodwin stated, NYCO will move its operations to Oak Hill.
Mr. Goodwin confirmed that the company has every intention of remaining as a significant presence and employer whether the amendment succeeds or fails.
Thank you Dave, very much, for that very helpful background.
In discussing this with friends more engaged locally than me (a spring/summer/fall resident) I had been given to think the amendment was “do or die” for NYCO operations in this area. I am reassured that blocking the amendment will not result in harm to my friends here.
I’m somewhat surprised the amendment passed in light of your information, unless there was deliberate misrepresentation of the criticality of access to lot 8 and the extent/nature of reserves on Oak Hill. Perhaps the net gain of protected land explains the vote of New Yorkers?
On further probing, I’d have to say that the best we can say of the evidence as to whether the proposal will affect robust continuation of operations of NYCO in Lewis/Willsboro is conflicted. Dave’s reassuring report above seems to suggest that NYCO’s interest in expanding to lot 8 is primarily related to ease of extraction, not continued access to wollastonite. Moreover, commentator’s like Peter Bauer state that “NYCO Minerals Inc. already has dozen of permits for new mines in the region for high-quality wollastonite ore. These sites alone will keep the business in the region for at least two more decades.”3 The Sierra Club Atlantic Chapter offers further reassurance that jobs and local economy are not an issue in considering Amendment 5: “The primary reason the company is seeking this lot is productivity and cost effectiveness.”3
On the other hand, the suggestion that access to lot 8 is important to the continued operations of NYCO is strong in several reports from Denton publications (which ultimately afforded editorial support for approval of Proposition 5). 1,2 And according to another national and reputedly unbiased source “The mine, without expansion, was estimated to last three or four additional years. The expansion into Lot 8 added an estimated eight to ten years to the mine’s lifespan.”3
But, if deconstruction of “Forever Wild” is irretrievably underway once the proposal is activated, does the jobs/economic issue matter at all? It is important to note that Proposal 5 is NOT precedent-setting with respect to land swaps in the forest. Several of these have been approved in the past but have more obviously addressed community needs and municipal infrastructure, rather than commercial interests.3 That the entity engaged in the swap is a corporation is what is new. But public welfare and business interests are not easily dissected from each other and an operation like NYCO in a town like Lewis can be viewed, holistically, as “almost infrastructure”. There may be a strong public interest in the welfare of a corporation (will it continue to operate and employ, or not?) such that the public (and human) impact of restraint of a corporation might well moderate reluctance to threaten environmentalist principles. Should NYCO close, I doubt opponents of Proposition 5 will drop everything and rush to northwestern Essex County with a sheaf of proposals and funds for green, sustainable businesses that will take up the slack in family and community budgets in short order.
Opponents of the proposition should know what they would have to say to a household newly facing the loss of a living wage in an economically struggling community. To the spouse. To the kids. Myself, I haven’t figured that out. Therefore, to me, the question as to whether this proposition substantively affects the longevity of NYCO operations in Lewis/Willsboro should be important to us in considering our reaction to the proposition and its newly imposed blockage. Unfortunately, it seems to me, the only reliable answer to this question may reside in the Boardrooms of NYCO as I am not satisfied I find it anywhere else.
1) http://www.denpubs.com/news/2012/jul/02/one-vote-down-two-go-land-swap/ and
2) http://www.denpubs.com/news/2014/jan/24/stage-may-be-set-legal-challenge/
3) http://ballotpedia.org/New_York_Land_Swap_With_NYCO_Minerals_Amendment,_Proposal_5_(2013)
Fine, if you believe the spin that the amendment was preserving jobs why didn’t the amendment say something, anything, about jobs? The amendment said absolutely zilch about jobs. We are expected to assume that NYCO will hire more, or at least not less, people if they are given access to more minerals. Why not make that a condition of the amendment–you find more minerals, you preserve or increase jobs?
Many years ago, I chose to live in the North Country and have had to hustle for work ever since. I feel for any one losing his or her job as I have done many times. Those 70 jobs support 70 families and I support Prop 5 for those families. The mine is only temporary.
I remember when the titanium mine in Tahawus was active, and now I am enjoying watching nature take it over again. Perhaps my children or grandchildren will be able to watch nature take over Lot 8.
I like details. An interesting detail about the Tahawus mine: it was owned (and closed) by Harold Simmons, the notorious Texas arch-conservative who funded the Swift Boat campaign and committed other foul deeds during his lifetime (his own daughters sued him at one point). This made my head spin as I tried to get NL to donate its rail corridor for a bike trail.
But I’m not sure it is going to be useful to consider details like that when we ponder the NYCO matter. The view from high altitude is best:
We had a conflict between two good values. An awkward and unsatisfying compromise was in order. We can only be happy that the unpleasant decision is behind us.
“S&B could make a business decision tomorrow to consolidate operations that would mothball mining in the Adirondacks.”
So could a wholly owned local business, so I don’t think this is very relevant.
“NYCO could be sold as an asset at any time.”
Again, same goes for any wholly locally owned company. In fact many smaller locally owned companies can even be less stable than these “parts” of larger firms. Often subsidiaries of larger firms can survive w/o being profitable (and still generating local economic activity) for long periods of time.
Good luck running a local standalone company that loses money for very long periods of time. Not saying this is, or has been, the case with NYCO (Pete, how does this particular operation perform) but there are positive reasons for being part of a very large conglomerate. For example many R&D operations within large companies (the kind that create many of the high paying technical positions I would like to see more of in the Adirondacks) lose money for long periods of time if not for their entire existence.
Paul, I think you’re missing the point. What’s relevant is not whether a business may succeed or fail, or whether a business may be sold or not, but the extent to which the question is a local issue. If the Mountaineer in KV is sold it will be a local issue, for local reasons. NYCO, not so much.
In the end what I think we really want to document is what was the long-term effect on the Forest Preserve. In the end if we end up with something like adding 5 to 7 times as much land to the FP even if the only “job effect” was a shot at saving some local jobs I still can’t see the downside? If this was something like the top of Gothics or some massive wetland complex than it would be a different story.
This is a worthy debate and I thank folks for their information. I think that many people in the North Country, ones that would have automatically just voted for everything “green” are finally looking to “find” a balance between green and economic development issues. This balance is always messy (as are most things that require some give and take), facts can be defined and redefined, and solutions never perfect. Whether 100 jobs were saved or not, protected forever or for just a few years – for many that was worth the vote. What I find most interesting about this vote is not the outcome of this one issue, but the fact that it has signaled a shift in the thinking of many that we need to do more to protect the people and communities of the North Country along with preservation of open space. Finding that balance, and preserving and strengthening communities will be the focus of these next decades in my opinion.
From the number of comments here this issue appears to already be cooling off. That may be a good or a bad thing. Hard to say. I agree with Pete following it is a good idea no matter what side of the issue you are on.