Kochland Page 8

  Paulson talked often to Charles Koch on the telephone. He told his boss what he was seeing in the refinery. This might not have been news to Charles Koch. He had seen the union operate firsthand. For at least one summer when he was younger, Charles Koch had worked at Pine Bend and must have seen the near impunity enjoyed by union bosses like Joseph Hammerschmidt. Koch couldn’t have been shocked as Paulson relayed over the phone what he was seeing in the plant. The union put at risk everything that Charles Koch was hoping to build. “He told me, ‘I’m worried that the union is going to take this company down,’ ” Paulson recalled.

  Shortly after arriving at the refinery, Paulson was given his chance to fight the OCAW. The union contract was set to expire at the end of 1972. Negotiating a new contract would give Paulson, and Charles Koch, a chance to rewrite the refinery rules and make the place operate as they believed it should.

  In April of 1972, Paulson made his first move. He scheduled Hammerschmidt to work on Easter Sunday.

  Hammerschmidt, apparently, did not want to work on Easter. So Hammerschmidt did what was commonly done in those days. He told Paulson no. He wasn’t going to work Easter Sunday.

  Hammerschmidt could be forgiven if he thought that his open insubordination would not be challenged or punished, because that’s how things worked at Pine Bend: if the union guys were unhappy about something—say, the disciplining of a fellow worker—they simply dropped what they were doing. They walked to the front office and took a seat until the matter was resolved, and management usually caved to their demands. It seemed that Paulson would have caved as well because he wasn’t popular with the employees. The cowboy boots, the military-style inspections, waking the guys up and embarrassing them on Saturday mornings—all of it had soured the employees on Paulson. He recalls hearing what the union men were saying behind his back: “They were going to jam those boots ‘down Paulson’s ass and send him back to Texas.’ ”

  When the shift began on Easter, and Hammerschmidt wasn’t there, Paulson fired him immediately. In the eyes of the OCAW, Paulson had just declared war.

  * * *

  In the late fall and early winter of 1972, it was time for Koch Refining Company and the OCAW to negotiate a new labor contract.

  There was a regular calendar and set of traditions that surrounded these contract negotiations. A labor contract is a broad agreement between a union and a company that sets out the terms of employment at the workplace, from the level of wages to the value of extra benefits like health care coverage. The contract even laid out workplace rules, like the procedures for firing a worker or the means by which an employee could file a grievance to complain about abuses by management. The labor contracts typically lasted about three years. When the contracts were set to expire, a group of Koch Refining lawyers would go into a meeting room and sit down across the table from a group of negotiators selected by the OCAW. The union negotiators were almost always refinery employees rather than lawyers or negotiating experts. When it came to bargaining with the company, the union men relied on their personal knowledge of how the refinery worked. They knew what to ask for, and they knew what they could offer in return. To get what they wanted, the union men relied on their collective willpower. They stood together, ready to walk off the job as a group if management did not agree to their requests.

  During his first meeting with the OCAW team, Paulson sat down in the meeting room, flanked by his company lawyers. Across the table sat Joseph Hammerschmidt, the union president. Even though Hammerschmidt had been fired, the union insisted that he be present for the negotiations. The union had already filed a grievance over Hammerschmidt’s firing, and, in the meantime, he was still a member.

  After everybody was settled, Paulson presented his offer.

  Koch would unilaterally rewrite all the work rules inside the refinery. The seniority system the union enjoyed would be gone. The rules that barred employees from doing work in different “trades” would be gone. The employee shuttle truck? Gone. The rule about a bonus payment for overtime without two hours’ notice? Gone. And then Paulson showed the union men that there would be precious little room for negotiation. These were the new rules. This was how things would work at the refinery. End of story.

  This might have seemed like a bluff; like a way for Paulson to start the contract negotiations with a Texas swagger. But after Christmas, and into the first frigid days of the new year, it became clear to the union that Paulson was not bluffing. He was not going to negotiate.

  In the eyes of the OCAW men, there was no choice as to what to do next.

  On January 9, 1973, at four in the afternoon, the entire unionized workforce left their stations and walked off the property grounds. They walked out through the parking lot and then through a wide gate that led outside the refinery property. As they passed through the gate, the gate became something entirely new. It became a picket line. Crossing the picket line marked a moment of no return. After they left the gate, the OCAW men became locked out of the refinery. They became locked out from their jobs. They became unemployed.

  The refinery inside that gate had provided the men with everything they had: the income that fed their kids and paid down their mortgages. It made a middle-class life possible for them. And none of the men knew if they would ever get back inside or if their job would ever be open to them again. Bernard Paulson and Charles Koch had made it clear at the negotiating table: Koch Refining planned to break the OCAW. And the union men had to make it clear to Bernard Paulson and Charles Koch: the OCAW could not be broken.

  This wasn’t an easy thing to do. None of the OCAW men were happy about using their jobs as a bargaining chip. Joseph Quinn, for example, had a wife and five children. Quinn didn’t see his kids a lot—he missed at least five Christmas mornings in a row because he’d been working at the refinery. His wife, Rita, handed out the presents without him. But through his absence, Quinn gave his kids a life that he had never known. He and Rita owned a tidy home in suburban Minneapolis, near Rosemount. Their kids went to good public schools. They didn’t work long days in the farm fields under the hot summer sun, as Joseph Quinn had done growing up in western Minnesota.

  But Quinn didn’t question his union when the OCAW told him to walk off the job. There was a simple idea that motivated his obedience: solidarity. Solidarity encapsulated everything that the union stood for and everything that made the union strong. Quinn hadn’t learned about solidarity growing up. He was raised by a farmer, so he learned about individual accomplishment and the value of hard work. Quinn’s dad taught him that unions were Communist front groups and that unions encouraged laziness. But when he moved to Minneapolis, the only jobs available to Quinn were union jobs. When Quinn raised his right hand and pledged allegiance to the OCAW, he pledged solidarity to his union brothers at the refinery. But the pledge didn’t sink in too deeply; Quinn just wanted the job.

  Then Quinn got in trouble for the first time.

  One of his jobs at the refinery was to check on the level of crude oil in the big white tanks on the south end of the plant. This was a critical job because the tanks could overflow if their levels weren’t closely monitored. At the end of one shift, Quinn was unable to check on the oil in one tank because men were welding some equipment there. After the men left, he went to check the oil levels, but a fellow worker was urinating near the hatch that Quinn was supposed to check, so Quinn backed off to give him privacy. The end of his shift came, and Quinn still hadn’t checked the level of that oil tank. He told his manager as much, and his manager told him not to worry about it.

  “The next thing I knew, that big, beautiful white tank was black, covered completely in oil,” Quinn recalled. The tank had overflowed, and it would not have done so if Quinn had checked the oil levels as he was supposed to.

  Quinn was suspended without pay for three days for the transgression. The paycheck that covered his mortgage, that fed his kids, would be about one-third short of what it should be. He couldn’t afford to take a f
inancial hit like that, and he didn’t think it was fair that he should need to. So Quinn filed a union grievance over the punishment. A grievance is a formal complaint that only union members can file. It is a complaint that is handled somewhat like a lawsuit, with the union acting as the employee’s personal legal team. Without a union, there are no formal grievances—an employee can simply complain and he or she is on their own to persuade the boss to take their complaint seriously. With a grievance, the employee has the union on their side.

  After Quinn filed his grievance, he was summoned to the refinery offices. He went into a meeting room and found a company lawyer there, who wanted to discuss Quinn’s punishment. But Quinn wasn’t alone. There was a representative of the OCAW sitting at the table next to him. As Quinn and the company lawyer were talking over the issue, the OCAW man kept interrupting. He kept correcting Quinn, kept interjecting new details into the story. Quinn disagreed vehemently with some of those details, even though the details skewed the story to Quinn’s benefit. Quinn even started to argue with the OCAW man as the company lawyer sat there and watched. Finally, the company lawyer called an end to the meeting, seemingly in exasperation. It was hard to get a straight answer about anything with the pushy OCAW man sitting right there.

  A few days after that meeting, Quinn was called to the front office once again. This time it was only his manager there. His manager pointed to the desk, where there was a check made out to Quinn in the amount of the wages he had lost from the three days he was suspended. “He told me, ‘Don’t take this as a victory.’ But there was the victory right there on his desk!” Quinn recalled. Quinn happily took that check and cashed it.

  The episode taught Quinn an important lesson. The OCAW negotiator had made the grievance process hellish for the company lawyer and had chosen to fight for just three days’ wages for just one guy. Thanks to that episode, Quinn understood what solidarity meant: “I saw how things really work.” When it came time to walk off the job, Quinn walked off the job. He didn’t question the OCAW, because the OCAW hadn’t questioned him. It was all for one and one for all.

  * * *

  When the strike began, Joseph Quinn helped organize the picket line. The refinery employees took scheduled shifts to picket at the refinery’s three main gates to ensure that the picket line was staffed around the clock. The OCAW organized much of this activity out of a small trailer parked just outside the refinery property. Guys lounged and played cards outside the trailer. Others showed up to get picket signs that they would hold during their shift, signs bearing slogans like: “Koch For Slavery” and “OCAW LOCAL 6-662—ON STRIKE.” It was Quinn’s job to make sure the shifts ran smoothly and that the signs were always available.

  The striking employees carried placards and signs, but the picket line was far more than a simple form of public protest. It was an economic weapon that had been employed to great effect over one hundred years of American labor struggles. The goal of the picket line was to financially strangle Koch Refining Company.

  The picket line was a barricade designed to stop any truck traffic going in or out of the refinery—a barricade that would effectively shut the refinery down. A huge proportion of products made at the refinery were shipped out by big tanker trucks that took heating oil to nearby school buildings or gasoline to nearby service stations. If the trucks couldn’t come and go, Koch couldn’t sell its products. The OCAW aimed to starve the company out, forcing it back to the negotiating table in a weakened position.

  The tanker truck drivers—and even the cops who patrolled the road outside the refinery—belonged to the Teamsters union, which meant that crossing the picket line was akin to violating their own sacred oath of solidarity. The picket line worked. On a typical day at the refinery, about two hundred tanker trucks passed through the gates to pick up fuel and ship it out. That number dropped to near zero after Quinn helped get the OCAW picketers organized and standing in shifts.

  The union had cut off the oxygen supply of cash to Koch’s refinery. They knew that the owner, Charles Koch, was losing enormous amounts of money for every minute the OCAW was on strike. It seemed certain that Charles Koch would have no choice but to fold. He might hold out for a week or two to save face, but there was no way Koch could hold out for long.

  These union men clearly had no idea who they were dealing with.

  * * *

  Bernard Paulson was prepared. He had set up a cot in his office, a cot where he would sleep for most of the next nine months, rarely leaving the refinery, rarely leaving his post. He had also stockpiled food. The refinery had a large cafeteria near the office building, and when the union workers walked off the job, Paulson gave an order that the cafeteria was to be open twenty-four hours a day. A skeleton crew of nonunion workers would be living inside the refinery gates, and Paulson made sure that the cafeteria was open to them whenever they needed to eat. And they would need to eat at odd times during the strike because there weren’t going to be any more eight-hour shifts. Running the refinery would now be an around-the-clock job. There wouldn’t be regular mealtimes.

  Paulson did more than just stockpile food. He had also quietly built the workforce he needed. Many members of this new workforce were the nonunion supervisors who worked at the refinery. They would each now do the job of two or three men, working sixteen-hour shifts. But even that wouldn’t be enough. So Paulson started making phone calls back to Texas, back to the oil-patch state where Paulson had friends and employees who thought the world of him. He called these old friends and asked them to come up to Minnesota to work. Shortly after the picket line was erected outside the refinery gates, Paulson arranged for helicopters to fly these workers into the refinery. The helicopters swooped in low over the refinery fences and landed on the refinery grounds to drop off his new workers from Texas and Oklahoma and other states where unions were not only rare but widely hated. Inside the main office building, Paulson converted a large room in the basement into a barracks for the new workers.

  On the picket line, the OCAW men watched as the helicopters passed over them, hovered, and landed inside, delivering the workers who would replace them. The picket line was becoming symbolic.

  But even with Paulson’s new workforce, it wasn’t easy to keep the refinery going. Paulson needed to run giant machines called reformers, for example, which made a vital chemical for Koch’s fuel products. The reformers could not be started with the simple press of a button, however. They needed tank loads of hydrogen to spark their ignition. After running out of hydrogen, Paulson knew he couldn’t convince any local truckers to break the picket line and deliver more to him. So he called some old friends of his at Amoco, and they told him about a solution: he could use natural gas—which came into the refinery via pipeline—to ignite the reformers. It was a tricky, complicated process, but Paulson and his team figured out how to make it work. Soon he had all the reformers firing, and the fractionating towers were running at full steam.

  On the first night of the strike, however, one of the boiler units—the large furnaces that superheated oil before it was sent to the fractioning towers—wasn’t working right. The mechanical problems inside the boiler went unnoticed for many hours because the unit was understaffed. Usually the boiler was monitored by three employees, but Paulson had to run the unit with fewer. The boiler malfunction grew worse until the system collapsed with an incendiary blast. It was a small miracle that nobody was killed—the explosion tore a gaping hole in the side of the boiler. The unit was shut down in a panic, the valves were closed to stop the flow of oil and prevent a fire that could have engulfed the property. The salaried supervisors went out and inspected the boiler. It was a total loss.

  A manager came into Paulson’s office and told him the news. The boiler couldn’t be fixed, the manager said, at least not without help from the unionized operators who ran the machines. Koch would need to bring the operators back from the picket line for the repair job. “He said, ‘We’ve lost the strike. I want my operators back,�
�� ” Paulson recalled. “And I said to him, ‘If you believe that, hit the effing road.’ ”

  Paulson again called one of his friends in Texas, waking him in the middle of the night. He said he needed an urgent favor and told his friend about the explosion. Paulson’s old friend hustled a team together and got them on a plane to Minneapolis. From there, the team was flown by helicopter into the refinery. The unit was up and running again within about a week.

  At night, before he went to bed, Paulson walked around the refinery to make sure his men were doing well. He dropped into the monitoring rooms where the men were staring at screens, gaunt from spending unending hours on the job. The pressure on them was tremendous. Everyone knew that there was a potential catastrophe waiting to happen every minute of every day. The boiler explosion was proof of that. Now, with a skeleton crew overseeing them, the boilers were firing and pumping out superheated, flammable fuels throughout the refinery. It was almost reckless to run the refinery so short-staffed, when just a few minutes of inattention could get people killed. One employee quit after suffering from exhaustion and an anxiety attack that left him nearly catatonic.

  When Paulson walked his rounds at night, he made sure to exude confidence to keep the spirits of his employees high. “They said it was very important, my demeanor, during that strike,” Paulson recalled. “One of our salespeople, during that time, he called me Patton. He said, ‘All you lack are those two ivory-handled revolvers.’ ”

  * * *

  Weeks passed. The men on the picket line kept their positions at all hours. They choked off truck traffic going into the refinery. But standing outside the refinery gates, they could see that the fractionating towers were still spewing steam, and the flare towers were still shooting out flames.