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People were clamoring to be a forklift driver because job security at most companies had all but disappeared over the previous thirty years. Up until the 1990s, American workers lost jobs in a “cyclical” way, meaning that they got laid off when the economy went into a down cycle but got rehired when demand returned and the company needed them again. During the 2000s, job loss became “structural,” meaning that companies cut jobs permanently in a strategic effort to cut costs. As unions fell away, so did contracts that limited job cuts. As recently as the 1990s, 69 percent of US companies had “no layoff” rules that would cushion workers from volatility and ensure that more jobs were retained through the down cycle of a recession, but that security had been quietly traded away. By the mid-2000s, only 3 percent of companies had such rules.

  Companies cut jobs even as the economy grew and profits rose. In 2004, about 13 percent of workers were forced out of a job. This was roughly the same percentage that was fired or laid off during the recession of 1981, which had been the worst downturn since the Great Depression. In this regard, American workers faced a level of insecurity that was akin to being in a state of permanent, deep recession. The workers hurt most by this volatility were those with only a high school education or less; the kinds of employees that once filled the ranks of the unionized workforce.

  McKinney knew that demand was fierce for the Georgia-Pacific warehouse jobs, but he was surprised at just how rigorous the hiring process was. He took several hours’ worth of exams testing his math and reasoning skills. He sat through interviews and filled out lengthy questionnaires. But he was willing to do it, and do it in his cheerful way. After sitting through all the tests, he was hired.

  McKinney’s workdays at the warehouse were monotonous. When he arrived, McKinney got into the forklift truck he would drive for the shift. Each truck was outfitted with a large digital display screen and keyboard. McKinney logged on to the system, typing in his unique username and password. When his login was complete, McKinney was on the grid.

  The LMS dispatched McKinney on his first assignment, telling him where to pick up his first load of cargo. He drove to the assigned spot, then pulled out a bar code scanner and aimed it at a tag near the cargo, pulling the trigger and logging his current location into the LMS. Then, his next prompt appeared on the screen. He was told to drive to bay B-1, for example, where further instructions awaited. He was also informed how long it should take him to drive to bay B-1—a time that was based on the averages determined by those driving tests so long ago. A clock began ticking down immediately as McKinney drove to the rendezvous point. Once there, he pulled out his scanner, pulled the trigger, and logged his arrival. The LMS recorded how long it took him to make the trip. His performance was recorded. In this way, he proceeded from prompt to prompt for hours at a time.

  Trimm, their supervisor, monitored the drivers from his office. The LMS showed Trimm a bird’s-eye view of all the warehouse activity. He could see how the LMS automatically scheduled drivers to move cargo from the bays to the waiting semitrucks in a never-ending migration of game pieces across a complex board. The drivers were unaware of the larger tapestry and simply performed their piece of it. Trimm was told not to interfere with the LMS assignments. Doing so would interrupt the complicated and interlocking set of assignments that the LMS designed. Humans were encouraged to stay out of it.

  But Trimm was encouraged to make sure that drivers weren’t failing the LMS’s goals. At any point in the day, Trimm could pull up the work log of any driver. The log showed, minute by minute, what each driver had been doing during the day. Trimm was told to look at two important metrics. The first metric was a driver’s performance against the time standards.

  The second metric Trimm looked for was any gap in time. These were the moments when the driver was not on the grid. Any loss of a few minutes or more was recorded. The drivers were told to keep a written log of their lost minutes, called “indirect time,” to account for the moments when they were off the grid. Indirect time might include the time to take a bathroom break, drink water, or stop to ask someone a question. Only a small number of activities could justify taking indirect time off the grid. Chatting with coworkers, for example, was not accepted. When Trimm saw gaps, he questioned drivers and made sure they could provide an explanation for their lost time. If they made an emergency phone call home, or defecated, or stopped to eat, they needed to have it recorded in their indirect log. Employees were reprimanded if they could not explain the purpose of their indirect time.

  It was a relief, then, when Travis McKinney scanned into his last location of the day and logged out for the night. It was the first moment of his day when he could enjoy indirect time, direct his own movements, and not have to explain his actions to anyone.

  * * *

  On payday, McKinney and the other warehouse workers sometimes drove a few blocks away from the warehouse to have a beer at a local strip club called the Nicolai Street Clubhouse. To get there, McKinney drove west from the warehouse, across a set of railroad tracks, and past rundown factories and industrial warehouses. The club was located in a one-story redbrick building on a corner. A white sign facing the street advertised “Crazy Beer Specials” and “!DANCERS!!”

  These beer-drinking sessions were the closest thing the warehouse workers had to the raucous union hall gatherings that Steve Hammond knew from his youth. Since that time, the union hall had been moved to a new building closer to the warehouses, but almost no one went to the meetings anymore. The meetings were usually only attended by the IBU’s small leadership council, who gathered in a small conference room. They talked over pension finances or issues with the health care plan. One or two forklift drivers might show up for the meetings, and they were depressingly sober.

  When McKinney arrived at the Nicolai Street Clubhouse, he could easily find his coworkers in the dim and tiny bar. Most of the tables were just inside the front door. The guys sat there and drank cheap beer from plastic pitchers. The patrons stared over toward the small wooden stage, right next to an open door that led into the kitchen. The stage was horseshoe-shaped and surrounded by a row of cheap, metal-framed seats. When it came time for their shift, the women mounted the stage by way of a small staircase and danced beneath a fluorescent-tube sign advertising Playboy Energy Drink. A cheap plastic fan mounted on the wall behind them cooled the stage. The narrow wooden ledge around the stage was known as “the rack,” and the men gathered in the seats around it, looking up at the stage and placing their newly earned dollars along the ledge. At a certain point in the routine, the nude women approached the men and swept up the dollar bills in their hands before leaning forward and performing acts of astounding physical intimacy and athleticism.

  Some guys sat in the back of the bar, at a row of video lottery machines, slouched there amid the beeping and buzzing. McKinney said it was something of a sport to “watch the guys gamble away their paychecks” in front of the video screens. The forklift drivers could swap stories and complaints and gripe about the LMS over their beers. They could talk about their weekend plans and fishing trips and their kids. They shared a kinship that closely approximated solidarity.

  But even this pale form of solidarity began to fade. Over time, fewer people stopped by the Nicolai after work. They were fried after working under the Labor Management System. But there was more than fatigue to blame. The LMS wasn’t just tiring them out. It was turning them against each other.

  * * *

  The LMS accrued huge volumes of data on each employee. Koch Industries used this data to further motivate its workers to become more productive. Warehouse managers collated the log reports and printed sheets that ranked all the warehouse workers on their performances. The sheets were divided into three colored subcategories: the green zone, the yellow zone, and the red zone.

  Employees in the green zone performed at or above the 100 rating, meaning they matched or beat the LMS’s average recorded times for their driving. Those in the yellow zone typically scored an 80 rati
ng. They didn’t match the LMS goals, but they were B students. Those in the red zone received ratings of 70 or 60, lagging far behind the LMS benchmarks.

  Employees who ranked in the red zone were reprimanded after the results were tallied. They were also exposed to their peers. Koch printed the LMS rankings and posted them on a bulletin board in a public area of the warehouse, where the drivers could see it when they arrived for work. Predictably, the green players had a little extra spring in their step. The red players slouched. The greens and yellows made sport of teasing the reds—jokes were made about poor eyesight and physical impairments.

  With each new posting, the drivers shifted spots within the race. They paid close attention to their rankings, because the losers were culled from the herd. Drivers who lagged too long in the yellow and red zones could be reprimanded, then “put on notice.” Then they could be put on “last chance” status, with a final warning to improve. Then they could be terminated.

  This system seemed harsh to the old-timers at the warehouse, but they might have understood the ranking system better if they’d read Charles Koch’s book, The Science of Success. Right there, on page 89, Charles Koch explains the ABC process of employee retention at Koch Industries. The A performers are a company’s competitive advantage, he explained, while the B performers are the necessary workers who keep the enterprise running. The C performers, on the other hand, do not meet expectations, and can drag the business enterprise down with them. “Focused strategies should be put in place for C-level employees to improve performance through training, development, mentoring, or role change,” Charles Koch wrote. “Employees who do not quickly respond to these efforts and continue to perform at a C level should not be retained.”

  Life at the warehouse, then, became a scramble to stay out of the bottom third of the LMS rankings. The most prominent victim of the ABC process was the forklift driver Kerry Alt, the driver who’d lost his oversized beer bottle many years before when it fell out of his truck. Alt seemed to be incurably slow. It wasn’t that he was lazy. It was that he was pathologically deliberate. Alt looked at the LMS screen, looked up the bay where he had been directed, and then looked back down at the LMS screen to double-check that he was in the right place. Then he picked up the cargo, double-checked where he was supposed to take it, and drove in a deliberate manner to the appointed spot.

  Alt lived in the red zone, ranking after ranking. Everybody saw it. Trimm had known Alt for years and felt a friend’s pity toward his situation. Trimm tried to find jobs that would keep Alt out of the center of the action, or keep him off the grid altogether. But there just weren’t that many tasks available. Koch didn’t need someone to sweep the floors. It needed its employees to be on the grid, moving product. Alt was kept in the game and never seemed to break into the yellow or green zones.

  This was a hellishly stressful time for Alt. He complained to his bosses that he was just trying be safe and deliberate. He pointed out that Koch valued safety, and he was trying to be safe rather than drive in a hurry. But his coworkers managed to drive faster without having accidents, and the LMS rankings publicly rebuked Alt’s argument.

  “They forced him out,” Trimm said. “Everybody knew that Kerry was a hard worker. Or tried to be hard. He just couldn’t do it. I felt sorry for him.”

  Kerry Alt and his wife bore hard feelings toward Koch Industries after he left the warehouse. But he could have taken solace from page 90 of The Science of Success, in which Charles Koch explains that C players at one company need not be C players elsewhere.

  “Inability to create value at one company does not mean the same will be true elsewhere. Employees may be much more successful in another organization that has needs or a culture better suited to their talents and values,” Koch wrote.

  After he was forced out from his warehouse job, Alt had a hard time finding an enterprise where his talents were valued. He had worked at the warehouse for more than twenty years and made the mistake of attaching his identity to his job. When he lost it, he didn’t quite know where to pick up.

  “He kind of went into a depression and started drinking more,” recalled Alt’s wife, Shirley. He eventually applied for disability insurance from Social Security and collected his union pension. The couple sold their house and moved to a cheaper neighborhood. Shirley picked up work as a housecleaner to help pay the bills. Years later, Alt had difficulty speaking and could not recall much of the ordeal at Georgia-Pacific. “I was getting sick of it,” Alt recalled. “I felt pretty bad. I programmed it out of my mind.”

  * * *

  The drivers weren’t the only employees who were ranked. Every month, Trimm and his fellow supervisors received a report card. It quantified the performance of the three warehouses in Portland, and compared their performance against every other Georgia-Pacific warehouse in the country.

  Trimm’s operation was ranked according to a few key metrics, including the number of safety accidents (which he said were few) and the proportion of cargo that was damaged during shipment. The most important metric, however, was called “cost-per-case,” meaning the cost that Koch had to pay to move each case of material through the warehouse. The lower the cost, the thicker Koch’s profit margins. Cost-per-case became a constant focus of conversation when supervisors met with the drivers. It was the metric that everything was pushing toward: fewer people moving more product ever more efficiently.

  The Portland warehouses did well on their report cards, but their competition was fierce. The managers and drivers were reminded constantly that the three warehouses in Portland were the only three warehouses that Georgia-Pacific owned outright. The other distribution centers were run by third-party contractors, and Georgia-Pacific had enough clout to push these contractors to keep their prices low. Most of the contract warehouses used nonunion labor, Trimm understood, and some of them were located in rural areas where labor was cheaper. Trimm was fighting an uphill battle to keep his operation in the A or B class, and, for many years, he was successful. But he always knew that if he slipped, he would be replaced. If the warehouse as a whole fell behind, it also might be replaced by an outside contractor.

  The other pressures on Trimm had to do with safety compliance. It was drilled into his mind, day in and day out, that Koch subscribed to the 10,000 percent compliance rule. In the eyes of Trimm and his fellow supervisors, this didn’t just mean being safe; it meant being safe in exactly the way that Koch prescribed. If a manager or driver didn’t follow each rule to the letter, they could be disciplined. Managers were taught to be ever vigilant about any safety violations and to report them immediately.

  It was exhausting, and at times the exhaustion seemed to be created by design. The drivers were pitted against one another in the rankings. The supervisors were pitted against every other facility in the country. And all the while, more product was moved through the warehouses at a cheaper rate. All of these forces pushed toward a place that would do more work, with fewer people, for less money. “I even said to a couple of guys I worked with, I said: ‘Man, this is just an exercise in getting rid of people,’ ” Trimm said.

  * * *

  The warehouse could not get rid of Travis McKinney. He stuck to the job. He was often forced to work overtime, arriving before dawn on the weekend mornings, logging into the LMS, watching his screen populate with commands, running the circuits as quickly as he could to beat the time expectations. McKinney did this because he knew exactly what waited outside the warehouse doors if he lost his job.

  McKinney and his wife both worked long hours to meet their mortgage payment—modest as it was by Portland standards—to pay their health care bills, and to keep the refrigerator stocked. But life never stood still, of course. At one point, McKinney’s wife was demoted at the grocery store, which cut her pay dramatically. The couple also had their first child, a little girl, who was diagnosed with autism. They paid large medical bills. McKinney had to buy gas for his long commutes. Property taxes increased.

  Like
most middle-class Americans, they often turned to credit cards to cover the gap between their monthly expenses and their income. It was remarkable how quickly small purchases added up on a credit card statement. The McKinneys carried credit card balances of $15,000, even $20,000, whittling away each month at the interest payments. In this regard, they were not unusual. The average credit card debt for indebted American households climbed steadily through the 2000s, rising from $14,185 in 2002 to $16,911 in 2008. The average interest rate on this debt was nearly 19 percent, meaning that households spent about $1,300 just to keep up with interest payments each year.

  McKinney knew that his unionized job was a rare treasure in this economic landscape, with its health care benefits and a pension. So he reported to the warehouse each day, he worked the overtime when they told him to, and he endured the maze race of the LMS. The other drivers did the same.

  * * *

  Steve Hammond often felt sick when he arrived for work. He had watched the life drain out of the warehouse floor since Koch Industries took over. The work had never been great—no one dreamed of growing up to drive a forklift. But the work used to be tolerable. The camaraderie, the pranks, the sense of belonging that was conferred by membership in the IBU, all these things together made it possible to come to the warehouse every day. And now all those things had been eliminated. The drivers were robots, focused with laser-like intent on the task of pushing down the cost-per-crate and hitting the 110 rating in the LMS system to remain safely in the green zone. People didn’t talk to each other anymore. From the moment Hammond arrived at work, he looked forward to going back home.

  In 2008, Hammond decided to do something about it. He announced that he would run for election to become a full-time employee of the Inlandboatmen’s Union. He would take up the cause of his coworkers, and he would fight to remake the job into something like it had been before.