A little over a week ago, a continuous digester experienced catastrophic failure at a mill in the northeastern United States. As of this writing, it is unclear the cause, or if this mill will be able to even operate in the future. Speculation abounds, but it is all rumors.

Paperitalo Publications archives risks, fires and fatalities on PaperMoney. This is our fourth year of providing this service and the mayhem seems to continue apace with no discernable let up.

My comments here are general and not directed at any one incident or company. Safety failures seem to fall into two categories. The first is the individual performance error--someone gets in a hurry, is not properly trained, uses the wrong tool and so forth. While these incidents can be catastrophic (up to and including fatalities) to the individual and those in close proximity to the individual, the financial costs to the corporation are usually relatively minor when compared to the activities of the overall enterprise.

The large and financially devasting (although usually covered by insurance) incidents I have observed, often lie at the feet of the corporate office and financiers. In my way of thinking, and this is an accumulation of anecdotal incidents, not an exhaustive analytical study, is when you look at a large failure, it has two or three distinguishing components. First, the corporation is driven by officials totally pushing the bottom-line results, ignoring modern standards of care, operation and culture. Two, the facility has been passed from company to company for a period of time, each next seller trying to fluff up its performance as much as possible by deferring maintenance. Or possibly third, the corporate officers just do not appreciate the inherent dangers in large and complex processes such as those found in a pulp and/or paper mill.

Pulp and paper mills have large vessels and machinery characterized by containing large pressures or routinely mechanically moving large loads at high speeds (such as a press section or winder). From a corporate financial governance point of view, perhaps managing a fleet of soup manufacturing plants is not much different than managing a pulp and paper company, but at the operational level, it is an entirely different matter. One of the disconnects I have often seen is that the "soup cooker" just can't get their arms around the vast amounts of money needed for proper maintenance in a pulp and paper mill. It is not uncommon for the annual maintenance budget in a pulp and paper mill to eclipse the entire cost of a new soup manufacturing plant, to continue the analogy.

Pulp and paper mills, when examined up close, give warning signs of impending doom. Candidates for catastrophe are unkempt, usually starting at the front gate and continuing. The employees are poorly dressed and disheveled. Morale is so low you can feel it in the air. If you look at the training and professional development budget, it is non-existent.

While the salaried staff is despondent, the hourly staff can be downright hostile, for they are on the front lines, their lives are the ones in danger, and they know if shortcuts are being taken.

I have made it my business over the years to familiarize myself with the analysts, bankers, executives and the hourly crowds in the pulp and paper industry. Often, even in the same company, I come away with disbelief that these identifiable coteries are working for the same team, focused on the same objectives. There is a giant gulf between the layers of this corporate cake in almost every encounter I have ever had. Erroneously, every layer thinks they "have it right" and the other layers are ignorant. My experience tells me ignorance has no isolated home; it permeates whole organizations.

Communications takes time, and some slick video or in-house magazine pushed from the top down is not communications, it is direction setting in ignorance. Personally, I think corporate staff should spend half their time on the shop floor, and by that, I do not mean on some pretty cleaned up path for their special visit, but in working people's clothes, sitting in their canteens, control rooms and on the production floor, taking pulse of what is really going on.

We'll clean up our industry safety record when we start doing real communications from top to bottom and bottom to top. But it is up to the top to facilitate this continuous two-way action.

Be safe and we will talk next week.