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