Thursday, September 26, 2002
OMYA numbers don't add up
Corporate accounting practices are coming under scrutiny. OMYA is a private company and not beholden to stockholders, but it is still appropriate to evaluate the claims made by Jim Reddy, president of OMYA Industries in Proctor, in his "Economic prosperity. Quality of life. There's a difference?" commentary of Aug. 22.
OMYA claims that the company injects between $66 million and $85 million into Vermont's economy and employs more than 300 people. During the same time period that Reddy claims the company's impact on Vermont's economy declined, between 1999 and 2001, its published number of employees went from 200 to 300. Where are all those new jobs? In Canada, a March 2002 Ottawa Citizen article stated that "The company employs more than 250 people and injects about $20 million a year into the Perth economy." OMYA recently invested $500 million into its Perth, Canada plant, which can now process four times more than the Vermont plant. How is it possible that the larger Canadian facility is generating one quarter of the economic activity of the Vermont facility? OMYA's numbers do not add up.
OMYA blames its alleged decline in economic input in Vermont from 1999 to 2001 directly on the limitation on its trucking between Middlebury and Florence; a decision that has withstood three levels of appeals. There are many possible reasons for the company's decline in economic activity, but OMYA's explanation is the least plausible. The "limitation" was not a reduction in truck trips, but rather a limitation on its application for many more truck trips. OMYA still got a big increase.
Thirty-five percent more trucks now run from Middlebury to Florence. OMYA also increased the size and weight of the trucks. OMYA's subcontractors increased truck gross weight from 76,000 lbs. to 99,000 lbs., a 30 percent increase. OMYA has increased the amount of material it can truck between Middlebury and Florence, not decreased it as Reddy claims. OMYA has also figured out how to double the capacity of its Florence plant, without any changes to its permits. OMYA has had the opportunity to increase its economic impact in Vermont thanks to Vermont's Environmental Board decision.
Could the reason for OMYA's economic decline be that the market for OMYA's product, which quadrupled between 1992 and 2000, is experiencing the same decline that is happening in the global economy? A report on OMYA dated November 16, 2001 from Vermont's Air Pollution Control Division states that "There have not been any recent changes to this facility of air pollution significance. Business has been relatively slow."
This is all about jobs according to Reddy. But OMYA prides itself on its high level of automation. When I accompanied Reddy on a tour of the Florence plant, which can be run by two people, he was almost apologetic about how labor intensive their bagging facility is and volunteered that they are working on ways to further automate that part of the operation. When I saw men doing something together I asked what they were doing and he offered that they were cleaning out screens, but that the company has already figured out how to automate that job and if there is another expansion at the plant, those jobs will go away. And if the Middlebury rail spur is built, what happens to the trucking jobs?
It has been two and a half years since OMYA announced its intentions to open a new mine in Danby. Reddy admitted in his meeting with me a year ago that when he first looked at the Danby site, he did not think it was feasible. He said he might mothball the project for 3 to 5 years in hopes that technology would provide some solutions to the seemingly insoluble problems that the extraordinarily beautiful remote site presents.
Reddy told the citizens of Danby in a public meeting and in writing in September 2000 that he would come back to Danby in the beginning of 2001 with the results of the company's studies of the issues. He also said recently that he is working with the community to address the concerns. However, at every Select Board meeting in Danby, the Board says that there has been no contact with OMYA.
Reddy has not kept his word to the people of Danby, whose investments are being negatively impacted by OMYA's poor planning. OMYA has been active recently in Dorset, Wallingford and is planning to file an Act 250 application to expand its mine in Florence. It is time for a regional discussion so our communities can plan and work towards solutions, where feasible, rather than turning every town into a war zone of endless litigation that is the company's global trademark.
Corporations provide important jobs and the jobs that OMYA is providing are important. But companies need to be mindful of their credibility, act with respect for our communities, and recognize that small business is the major component of Vermont's economy. If OMYA continues to operate using the tactics that we have come to expect, there will not be a way for them to expand in a manner that is compatible with the people of Vermont or our economic vitality. For my community, OMYA's economic impact has been entirely negative.
Annette Smith is the executive director of Vermonters for a Clean Environment, Inc.