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  Chase Koch’s confidence might have come, in part, to changes in his personal life. On November 1, 2010, Chase married a Wichita girl named Annie Breitenbach, a registered nurse who had gone to college at the University of Kansas. Leslie Rudd noticed a change come over Chase after the wedding. Annie Koch clearly had a mind of her own. She made her own decisions. Her independence seemed to give Chase his own foundation as an adult. “I think that [Annie] was an ideal wife for Chase,” Rudd said. “She’s smart. She’s got resolve, and she’s got her own opinion; it’s not influenced by Charles or Liz. I think Chase feels that. He feels he’s got support beyond his family.”

  Chase and Annie Koch spent $3 million to buy a seventy-acre parcel of land in Wichita for their home. Much of the property remained undeveloped. Chase Koch now had his own family estate. He became a father when he and Annie had their son. A second son followed.

  In the small circle of Wichita business leaders, a lot of people were talking about Chase Koch. His rise to the highest levels in Koch Industries seemed assured. Ever since Chase was a kid, the specter had hung over his head—“WELCOME CROWN PRINCE”—and now he was on his way to filling the job. The pathway to Koch’s senior executive suite seemed to be short, straightforward, and predictable.

  The only thing standing in Chase Koch’s way was the fact that he was miserable.

  * * *

  Being Koch Fertilizer’s president wasn’t what most people might think it would be. The job was an exhausting, never-ending cycle of meetings. Chase Koch often arrived at Koch headquarters around five or five thirty in the morning, well before dawn, and was at his desk at an hour when many fathers had breakfast with their kids. Chase got there early to prepare for the meetings, which started around six thirty and proceeded—“wall to wall”—until six or seven at night. The meetings didn’t leave time for Chase to develop much of a strategic vision for Koch Fertilizer. He was too busy on the treadmill of supervising a sprawling, complex, and dangerous industrial system.

  Chase wasn’t willing to let details slide. He knew that small oversights could cascade into a catastrophe. He didn’t let decision-making slip into other people’s hands. And this turned out to be a strategic mistake.

  “I let it overwhelm me,” he said. He began taking his misery and stress home with him. His family life suffered.

  Chase paid a visit to David Robertson, a longtime Koch executive who became president of the company in 2005. Robertson was a taciturn executive who spoke forcefully with carefully chosen words. He was a strict adherent of Market-Based Management. He was also seen as a potential future CEO of Koch Industries. If he got the job, Robertson would be the first CEO without the last name Koch. This made him a competitor, in some people’s eyes, to Chase Koch. No one knew which way the future might break.

  If Chase Koch and David Robertson were both vying for the CEO position, they didn’t act like adversaries. Chase turned to Robertson for help when he needed it the most, and Robertson offered him wise advice.

  “I walked into Dave’s office. I was like, ‘I need help. I’m really struggling in this,’ ” Chase recalled.

  Robertson asked Chase to walk him through a typical day. Chase talked about the meetings, the bottomless needs of the organization. The strain it was taking on him. Robertson told Chase that he had fallen prey to a classic mistake of leadership. He was carrying too much on his shoulders.

  Robertson said, “You control your calendar. You’re the only one that can say ‘No’ to things. . . . Take accountability for your own role and actually work on things where you can add value,” Chase recalled.

  Chase tried to learn how to delegate. He made sure he had the right people working for him and trusted them to do their jobs. But still, it didn’t feel right. Chase realized he was much happier before he’d been promoted, when he ran Koch Agronomic Services. He loved the innovation of the job, meeting with investors and inventors. Chase recalled a piece of advice that David Robertson had given him. Robertson said the most important thing a leader can do is develop a vision. Now Chase had a clear vision. It just wasn’t the vision that everyone else in Wichita seemed to have for him.

  Chase Koch called a meeting with Steve Packebush and told him the news.

  “Steve, I’m not the right guy for this role,” Chase said. He wanted to quit.

  Packebush tried to talk Chase out of it. “He said, ‘Just give it some time. This takes time to really learn the stuff,’ ” Chase recalled.

  Chase wouldn’t bend. He wanted Packebush to spin Koch Agronomic Services into an independent company, and Chase wanted to run it. The job was less prestigious, and it would look like a step backward, if not a permanent step away from the path to becoming CEO. But this is exactly what Chase Koch insisted that he do.

  “I was like, ‘I need to be over here. This is where my passion is,’ ” Chase said.

  In late 2015, Chase Koch demoted himself. He stepped away from the straight, upward path to succeed his father. His reasoning was simple: “Life’s too short.”

  When asked, years later, about his most important strategic decision as head of Koch Fertilizer, Chase Koch thought for a while. Then he mentioned his decision to quit.

  “That was a big strategic decision, I think, for the overall business and for me personally,” he said. The education of Chase Koch taught him that it was more important to follow his own path, regardless of the expectations of others. It does not appear that he ever regretted it.

  * * *

  Chase Koch’s decision disrupted what appeared to Koch employees as a clearly laid plan of succession. When Chase stepped aside, an unspoken competition began among senior Koch executives to become the first CEO after Charles Koch left the company. This wasn’t the only source of uncertainty for Charles Koch in 2015. Even for someone who embraced volatility, the events of 2015 and 2016 were unsettling.

  The American public, it seemed, wanted to go its own way, regardless of the consequences. There were murmurs of rebellion everywhere, which culminated in a crisis of American governance that threatened to upend the political project that Charles Koch had labored over for forty years.

  There were rebellions and problems within the company as well. A stubborn, deadly set of problems emerged inside Georgia-Pacific, one of Koch’s largest and most important divisions. Perhaps most frustratingly, these problems refused to be tamed by the tenets of Market-Based Management. People were dying, and the best efforts of management didn’t seem to be working.

  The anger among American workers was bubbling up, burning particularly hot in Georgia-Pacific’s warehouse operations in Portland, Oregon. That’s where Steve Hammond was about to make his final stand as an official with the IBU labor union.

  * * *

  I. During Hawley’s career at Wichita Collegiate, his players won fifty state titles by 2018 and he was inducted into the National High School Tennis Coaches Association Hall of Fame.

  II. UAN stands for urea-ammonium nitrate.

  CHAPTER 23

  * * *

  Make the IBU Great Again

  (2015–2017)

  Steve Hammond volunteered to become a union official because he wanted to make things better. He wanted to improve life at the Georgia-Pacific warehouse. He wanted to curb the power of the Labor Management System and win pay raises for the employees. He wanted to restore the Inlandboatmen’s Union to its former greatness. Instead, he spent a remarkably large portion of his time tangled up in long, complicated disputes with Koch Industries.

  The IBU had hundreds of members in Portland, who worked for several companies. But Hammond estimated that he spent 75 percent of his time handling complaints from the hundred or so employees at the Georgia-Pacific warehouse. The Labor Management System was grinding them down. They were forced to work overtime, and were disciplined or fired for small infractions and absences. The employees came into Hammond’s office constantly with their complaints, demanding that he help them and file grievances. They begged him to win a
better labor contract when negotiations reopened. Every day, when he went into the office, Hammond walked past the big stone plaque outside the union hall with the motto “An injury to one is an injury to all.” The motto felt like an open challenge to Hammond. It was an open question whether the motto, and the solidarity that it expressed, was a museum piece, or whether it was an animating force that might be employed for the benefit of workers.

  This question was at the heart of Hammond’s last battle with Koch Industries in 2016. And this question was at the heart of a troubling trend inside Georgia-Pacific. Confidential data from inside the company showed that the number of worker injuries at Georgia-Pacific was rising steadily each year, as Koch pushed workers to maximize profits and increase production. The rate of both small injuries and serious injuries was on the rise. Burns, amputations, and deaths on the job were increasing year over year, even if the public wasn’t aware of it. Hammond did not have access to this data and was unaware of what was happening. But he saw firsthand that the pressure on workers was intensifying. It was his job to put into practice the theory that an injury to one was an injury to all, and to show that workers might still have power to determine the conditions of their workplace.

  In 2015, Hammond still worked in the little IBU office on the second floor of the Longshoremen’s union hall, but he had a new boss. Gary Bucknum had stepped down as regional director and was replaced by a man named Brian Dodge, who went by the nickname Dodger.

  Dodger was short and wiry, but he had the aura of an imposing union boss. He spoke in loud, staccato bursts, and his blue eyes gleamed with intensity. He had striking features, with a square jaw, spiky white hair, and commanding, deep-set eyes. He made it clear in passing conversation that he carried a knife on his person at all times. Shortly after he took the job, Dodge gave Hammond his own nickname, “the Hammer,” which didn’t fit Hammond’s owlish presence but seemed fitting for a union man.

  The Dodger and the Hammer sat side by side in the cramped office. Hammond often remained silent while Dodge took phone calls from IBU members up and down the Columbia River. “Hey, brotherman,” Dodge said when answering the phone. Then he bellowed: “You just fucked me!” before breaking into near-maniacal laughter. He launched into the disputatious patter of a union boss: “Yeah. Ouch. Pay ten more an hour. Tankerman—not a lead tankerman—makes forty dollars and forty cents. Okay—so that’s okay. Thirty-four dollars. That gives me something to push at them.”

  In 2015, the Dodger and the Hammer were going to take on the biggest challenge of their new partnership. It was time to renegotiate the labor contract with Georgia-Pacific. The brutal negotiations of 2010, which lasted eighteen months, had left the union scarred and nearly broken. When that contract was about to expire in 2013, the IBU didn’t negotiate but chose to preemptively surrender. With the backing of the union members, the Hammer and the Dodger told Koch that they wanted to “roll over” the 2010 contract, meaning that they would accept all its terms and keep it in place for two years. This cemented the defeats of 2010—including the low annual pay raises—but it allowed the union members to keep their pension and spared them another draining battle.

  In 2015, the union members made it clear that they didn’t want to roll over again. They wanted the Dodger and the Hammer to fight for something better. It was around this time that Steve Hammond started drinking every day. Drinking had always been a part of life at the warehouse. Guys would share beers in the parking lot after a shift. Hammond used to drink Scotch on special occasions, sipping a glass of expensive Glenlivet now and then. After starting his full-time job at the IBU, he started drinking Scotch weekly, then nightly, then switched to the cheaper stuff, like Dewar’s and Johnnie Walker Red.

  “Pretty soon I was drinking a half to three-quarters of a bottle a day,” Hammond said. “I’d just sit [at home] every night and get blasted. Then I’d fall into bed, wake up, feel like shit, and go in and go to work.”

  If Hammond’s drinking had become toxic, so had life inside the IBU. A weird dynamic had developed between the union officials and the employees. It was sort of like the dynamic between a parent and an angry teenager, an intimate bond that was woven with threads of resentment and dependence. Back in the 1980s, union members considered the IBU officials to be like spokesmen—the union members decided what they wanted, and the union delivered the message. Now the union members seemed to consider the IBU officials to be like a second layer of management. They thought the IBU officials were somehow in charge, somehow capable of bargaining for a better deal with Koch, and somehow in the position to resolve disputes with Koch management at the warehouse. Hammond believed that this modern view was exactly backward. The real strength of a union came from its members, and their willingness to stick together and strike. It didn’t come from the union office. And yet, all the union members kept turning to the union office, seeking solutions.

  The Dodger got an early lesson in this dynamic after he became regional director and negotiated the contract rollover in 2013. The IBU members agreed to the rollover, but only grudgingly. Dodge felt the rollover was their only choice. After just a few contacts with Koch, Dodge quickly learned the limits of bravado as a negotiating tactic. Koch was unmovable. “Guys in California get thirty dollars an hour. These [IBU] guys get forty! How the fuck can I go in there and try to get them big raises? You tell me—please! I have no idea,” Dodge said.

  When Hammond had joined the union, the members met every week. Now they met once a month (excluding July and August). The meetings used to draw two hundred people. Now they drew about fourteen. Most members who attended were on the union executive board, meaning that one or two members showed up who weren’t required to be there. When large numbers of union members did show up, it was to complain. And when they complained, they wanted Hammond and Dodge to solve their problem.

  “You almost feel like you’re Mom and Dad in there,” Hammond said. Life in the warehouse seemed to get worse by the day, and the union should have made things better. Disengagement and cynicism were contagious.

  The discontent throughout Georgia-Pacific went beyond economic concerns. As productivity and profits increased, serious injuries had increased in tandem. There was something broken with the system, and the problem was intractable. Senior leadership at Georgia-Pacific was aware of the problem, from CEO James Hannan down to the managers on the factory floor. But nothing they did seemed to slow the injury rate between 2010 and 2018. In 2014, the number of worker deaths spiked to a level that hadn’t been seen since the early 2000s. Concerns were mounting at the highest levels. “What we do is kill people at Georgia-Pacific,” said one longtime employee at Georgia-Pacific.

  * * *

  When Koch Industries purchased Georgia-Pacific in 2005, it inherited a new monitoring system at the company, called TRAX, that recorded a wide variety of metrics about the company’s operations. This information was collected in a centralized database for analysis, allowing Koch to improve safety and increase productivity throughout the company. Analyzing data in the TRAX played a vital role in helping Koch boost profits and helping Georgia-Pacific pay down the billions of dollars loaded on its balance sheet after the acquisition. A key metric recorded by the TRAX system was workplace injuries and accidents.

  Between 2005 and roughly 2009, the TRAX data set was spotty. The company was still engineering the system, figuring out what to record and training employees to enter data into it. By 2010, TRAX was fully operational. That year, the system recorded a total of 579 “OSHA recordable injuries” across Georgia-Pacific, meaning injuries that were significant enough that they must be reported to the US Department of Labor’s Occupational Safety and Health Administration. That year, one worker was killed at Georgia-Pacific.

  Managers at Koch Industries had reason to be satisfied with these results. They marked a significant improvement over Georgia-Pacific’s performance before Koch purchased the company. Throughout the 1960s and 1980s, worker safety standards were abysmal
. “It was like ‘Welcome to [Georgia-Pacific]. Watch your ass,’ ” one employee recalled.

  Even by the early 1990s, Georgia-Pacific was reporting six worker deaths a year across the country. Things improved that decade but worsened during the early 2000s. This was the period when Wesley Jones, the Georgia-Pacific executive in Georgia, said the company dramatically cut back investment in its factories because it was loaded with debt. In 2000, seven workers were killed at the company. Six were killed each year in both 2001 and 2002. Things improved once again, and in 2004 no employees were killed.

  Koch Industries was delivered something of a reprieve beginning in 2008, when the housing market crashed. Orders for building materials slowed dramatically, and during the recession that followed, orders for paper and tissue plummeted as well. During this down cycle, Koch Industries did what it does best: it invested against the economic cycle, pouring billions of dollars into Georgia-Pacific. A lot of this investment went toward improving safety measures.

  This was no simple matter. Workplace safety is an engineering problem from hell. It involves an almost limitless number of factors that interact with one another in impossibly complex ways. A plant manager must consider the dangers of each giant machine, and the multiple ways that each machine might take someone’s life. Then they must consider how each machine interacts with one another in a complex production cycle that, in many cases, runs twenty-four hours a day.