…In addition to our board, I want to acknowledge some other special guests, our customers.
They’re the very reason we’re here. Without them, there wouldn’t be a company, shareholders, employees, or the need to hold this meeting.
If we were to invite all of our customers to this meeting, we wouldn’t have room for our shareholders. But we are joined here today by some of our customers and I’d like to ask them to stand. You’ll see their names on the screen behind me. Please join me in welcoming this very special group.
Next, I’d like to acknowledge Ambassador Clayton Yeutter who retires from our board after this meeting. A member of the U.S. delegation that negotiated the North American Free Trade Agreement, Ambassador Yeutter joined our board in 1999.
Since then, we’ve benefited greatly from his expertise and counsel on the nuances of foreign trade. He’s taught us that trade agreements don’t occur overnight … something we’ve learned through the softwood lumber dispute. He’s helped us learn to think not only as a North American company, but, more importantly, as a global company.
Ambassador Yeutter, thank you for helping Weyerhaeuser understand the global trade issues that are shaping our future. We are a better and more successful company because of your contributions.
Before I begin my remarks today, I’d also like to acknowledge some people who aren’t here – the more than 150 men and women currently on leave from Weyerhaeuser and serving in the National Guard or Armed Forces Reserve.
We appreciate their sacrifices and look forward to the day they return safely and rejoin our workforce.
As I reflect on 2003, two thoughts come to mind: achievement and transition.
Achievement because of all the great things our employees helped us accomplish:
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Capturing 300 million dollars in synergies from the Willamette acquisition twice as fast as expected;
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Paying down more than 1.1 billion dollars in debt despite challenging economic conditions;
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Improving our manufacturing and operational efficiencies; and
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Continuing to transform Weyerhaeuser into a company based on speed, simplicity and decisiveness.
To those employees here today, and to all of our dedicated people around the world: We thank you.
The Senior Management Team and our board know these achievements did not come easily. We appreciate the sacrifices and all the hard work that made them possible.
I also see 2003 as a year when we transitioned from a company integrating an acquisition to a company preparing for the journey ahead.
That phrase – “the journey ahead” – should sound familiar. It’s the theme of this year’s shareholder report – a theme chosen after a great deal of thought. We wanted to convey that the Willamette acquisition didn’t mark the end of our journey. Yes, Willamette and all of our previous acquisitions were very important steps on our journey. We’re stronger today because of the people, ideas and assets they added to our company.
But the future that stretches before us has many more important steps and we’re positioned to begin the journey ahead.
You also probably recognize the artwork you see here today. It comes from the annual report and was painted by Ning Yeh, the artist who does our advertising. We’re extremely fortunate to have a talented artist like Ning helping us communicate the values and character of Weyerhaeuser.
Today, more than ever, we rely on these values to help us achieve our vision of becoming the best forest products company in the world.
Ning has graciously allowed us to duplicate a painting from this year’s report.
You’ll find copies of the painting and our new Foundation report in the back of the room. I encourage you to take copies of both as you leave.
As I said in my letter to shareholders, we won’t reach our ultimate goal by looking at the steps just taken.
Instead, we must turn our eyes toward the journey ahead.
It’s a journey that leads to a brighter future for our employees, customers, shareholders, suppliers, communities where we operate and for others whom we touch every day. Along this journey lie great opportunities.
We’ll remain a North American company, but we’ll become stronger by expanding our global footprint – especially in the Southern Hemisphere. We’re already familiar with this part of the world, which contains ideal operating environments for us.
As an industry leader in growing trees, we’ll benefit from rotations half as long as those in North America. Global expansion will also help us serve customers around the world.
Another opportunity involves creating a more diverse workforce.
To remain competitive, we must improve our ability to attract and develop women and people of color – a goal to which I’m personally committed.
Along our journey, we’ll also have the chance to demonstrate that every action we take is done to improve customer service or increase shareholder value. We’ll operate with greater speed and increased efficiency.
Most important, it is a journey of continual improvement - a journey we will take while operating ethically and to the highest environmental standards.
This is a never-ending journey.
It requires a willingness to listen, to change, and, perhaps most important, never losing touch with the values that have made us great. I believe – as did all previous leaders of our company – that these values complement each other. We cannot – and will not – ever seek to achieve one value at the expense of the others.
But, as you’ve heard me say before, we must continue to change.
Our markets drive some of that need for change. They are becoming more global and more competitive.
But, we also must change because the very existence of our industry depends on it.
Our future is challenged daily by substitute products – steel and plastic – and new forces such as electronic commerce. Personally, I think that these alternatives are not the best for the environment nor are they even practical.
Steel production pumps hundreds of tons of carbon into our air which promotes global warming. Wood products, on the other hand, offer a solution to global warming. Trees absorb carbon, which remains “locked” in wood building materials, paper, shipping containers and recycled content.
Wood products also represent a “closed” cycle. This means that whatever carbon is emitted during the manufacture of our products is absorbed by the new trees we plant. In other words, the very process of renewing our resource also provides the solution to any carbon we produce.
There are problems with plastic as well. Plastic is made from a non-renewable resource – petroleum – and only furthers our dependence on oil. Electronic commerce is wonderful, but booksellers need boxes to ship all those books, which, the last time I looked, still contained paper pages.
Wood truly is a remarkable, renewable and reusable resource. It can – and should – play an important role in meeting basic human needs in an environmentally sound manner. But unless we, as an industry-leader, help society understand that role, wood will not be the answer.
Instead, people will use steel or plastic in their homes. At grocery stores, they’ll ask for the plastic bag instead of the paper one.
So how do we help society understand that wood is an environmentally sound answer?
We begin by creating a better understanding of the current wellbeing of the forests. Despite what many people think, North America is not losing its forestland. According to the Department of Agriculture, there are more acres of forestland in the U.S. today then in 1920.
In fact, there are two acres of forestland for every person. And, due to managed forests such as ours, only seven percent of this country’s forests are used to meet the need for wood fiber.
In Canada, where a vibrant forest products industry has operated for more than 100 years, 91 percent of the original forest thrives to this day.
Here at Weyerhaeuser, we are practicing sustainable forestry.
Each year, we plant more than 120 million seedlings worldwide while harvesting less than three percent of our trees. That means that 97 percent of our trees are in some stage of growth for future generations.
Today’s forests are thriving and more diverse.
Wildlife populations have increased for many species over the past 70 years and Weyerhaeuser has played an important role in their recovery.
Here in Washington, for example, Weyerhaeuser helped lead the effort to pass the Forests and Fish Law in 1999.
This cooperative effort ensures that forestry practices help improve the health of our salmon runs. I should add that many of those practices were developed right here at Weyerhaeuser.
At the same time, the law provides us with the ability to meet society’s need for wood fiber.
In the Canadian boreal forests, we’re working with the government and other stakeholders to ensure the health of the mountain woodland caribou. Last month, we announced that we won’t harvest more than 200,000 acres in Alberta for the next five years.
This will allow more research to be done on how to protect the caribou habitat in that area.
These are just two of our efforts to provide a healthy habitat in the areas where we operate.
Jim James and Gary Risner have more information on these and other sustainable practices at the booth located on the lakeside of this room. I encourage you to visit with Jim and Gary after the meeting and pick up more information on our sustainable practices.
While all of us at Weyerhaeuser are very proud of our current forest management practices, I don’t ever want us to become complacent. Nor do I ever want the people of Weyerhaeuser to think that we have all the answers.
This brings me to the second thing we must do to survive.
We must engage in meaningful and respectful dialogue with all stakeholders to ensure the continued wellbeing of the forest ecosystem. We must listen to others – even those who are critical of what we do. We must learn and we must continually improve.
At the same time, I would encourage our critics to engage in meaningful and civil dialogue.
The wellbeing of our forests is too important to be reduced to inaccurate or misleading sound bites, single cause approaches or dialogues between only two parties.
There are many voices that must be heard. Communities. Aboriginal peoples. Consumers. Environmentalists. Forest scientists. Government officials. And, of course, the industry itself.
But involving all the right parties isn’t enough.
We must engage in the right dialogue – a dialogue that moves beyond the narrow question of “cut” or “don’t cut.” If we do, we’ll arrive at an answer that is supported by all stakeholders. It will be an answer based on good science and combines social, environmental and economic values.
This isn’t a new approach. We’ve seen it work in the past with impressive results. The British Columbia Coast Forest Conservation Initiative, for example, is a seven-year collaborative effort among the provincial government, communities, Aboriginal groups, environmental organizations, and the industry.
The result is a recommendation that balances environmental and socio-economic interests. Weyerhaeuser is proud to have been part of this effort and we want to thank everyone involved in the process. These efforts take time – and there’s more work to be done on this initiative – but the wellbeing of our forests is worth it.
Another example is the agreement between the Forest Products Association of Canada and the Canadian Boreal Initiative to collaborate on conservation projects. Weyerhaeuser has a significant presence in the boreal and we plan to be part of the implementation of this agreement.
Again, this will involve working with governments, communities, aboriginal peoples and environmental organizations – as we already are in other boreal projects.
In closing, I look forward to the journey ahead. So should our employees, shareholders and other interested stakeholders.
It’s a journey where we will continue to grow…a journey where opportunities abound…a journey that will give our employees even greater pride in knowing they work for a global leader.
We will not walk this journey alone.
We’ll walk it with friend and foe, supporter and detractor. We’ll hear words of praise and words of concern.
But let us make sure that we always listen to one another. There are many voices in the forest. Just as we want others to hear what we say, we must be willing to hear what they say.
For if we do listen, we’ll learn those things that truly will make us the greatest forest products company in the world.
Thank you.
