In Meat We Trust (24 page)

It’s not clear why Anderson landed in Denison, although it’s possible that he was responding to an advertisement that the town’s chamber of commerce placed in the
Wall Street Journal
in 1956: “
DENISON, IOWA
.
With every natural advantage for industry, offers excellent sites and build-to-suit plans! If you, Mr. Industrialist, are planning expansion or relocation,
INVESTIGATE DENISON, IOWA NOW
!” The invitation was born of desperation: the postwar years had not been kind to Denison and the surrounding area. Fordized farming had left some farmers under- or unemployed, a damaging drought had wreaked havoc on corn crops, and the growth of western feedlots had hammered the local cattle industry. In the previous fifteen years, some three hundred farm families had left Crawford County; nearly every issue of the local newspaper included at least one full-page advertisement for a farm sale. Fewer farmers translated into fewer patrons for Denison businesses.

Not long after he arrived in town, Anderson proposed building a hog packing plant that would utilize livestock from area farms, a project that town boosters promoted with an appropriate slogan: “A farmer a day
is moving away; Let’s build the plant and help him stay!” Local residents contributed $300,000 to the venture, and Anderson obtained a matching amount in the form of a loan from the federal Small Business Administration. Crawford County Packing Company opened its doors in the spring of 1958. A year later, the shareholders, all of them area residents, sold CCPC to Consumers Cooperative Association, a thirty-year-old farmers’ cooperative with more than $100 million in assets, including oil wells and a refinery. The slaughterhouse shareholders earned a 123 percent return on their investment, not bad for a small-town venture and confirmation that Andy Anderson knew how to turn ideas into profit.

True to form, a few months later, Anderson launched his next project: IBP. Within weeks, Crawford County residents had pledged $400,000 in support. (Five years later, those backers were millionaires, some of them several times over.) Again Anderson supplemented that with funds from the Small Business Administration, this time a government participation service loan: of the $350,000 requested, the Denison Federal Savings and Loan would provide 10 percent and the American taxpayers the rest. The money paid for 140 acres west of town, a site that included plenty of water (the operation would consume millions of gallons a year) and abutted a line of the Illinois Central Railroad. As had been the case with the hog slaughterhouse, Anderson, a self-taught, and by all accounts talented, engineer, designed the new plant to achieve maximum efficiency and accommodate minimal skill, adopting many of the ideas Ken Monfort had implemented at his Greeley slaughterhouse, including adjustable platforms and an overheard conveyor system that transported carcasses from the kill room to the refrigerator or directly onto a refrigerated truck or railcar. Like Monfort, the people at IBP relied on unskilled, local labor and focused on one product: fresh beef. “We don’t believe
in highly complex situations,” said one IBP executive by way of explaining why, in an age of convenience, IBP eschewed processed foods.

The company’s buyers bypassed stockyards and auction houses and purchased cattle directly from farmers and feedlots. As soon as a buyer completed a transaction, he used his in-car radio to relay the animal’s weight and price to a dispatcher back at the plant. IBP production managers used that information to decide when they needed more cattle, when buyers should pull back, and whether the buyer’s price was in line with that day’s needs. Line managers always knew exactly how many cattle were headed their way and when those would arrive, and cattle were slaughtered within hours, and often minutes, of their arrival at the plant. IBP saved money because it spent little to feed and water the livestock. At IBP, everyone, from cattle buyers and janitors to line workers and Anderson himself, worked six days a week. The goal that united employees was profit, a point Anderson drove home by adopting green (the color of money) as the unifying theme of the company’s public face. Inside and out, the packinghouse and office walls were green. So were the carpets. Secretaries sat at green desks and cranked out letters and memos on green typewriters. The company motto: “Think Money.”

Green thinking paid off. By the end of the first year,
employees were slaughtering a thousand cattle a day, and IBP had acquired a second plant in Fort Dodge, Iowa, where Anderson installed another state-of-the-art processing line. Denison’s pockets weren’t deep enough to support Anderson’s ambitions, and in October 1963, IBP went public. (That alone testified to the demand for a new meatpacking model: two years after the initial offering, an IBP share was worth sixty-three times its original value.) By 1964, IBP was the tenth-largest packing company in the United States and had landed on
Fortune
magazine’s 500 list. In the late 1960s, IBP followed Monfort into boxed beef, with the goal, as one company executive put it, of breaking the “chains of history
that . . . confined the retailing of meats to the dark ages.”

Revolutions invariably disrupt the status quo, and in this case, labor unions understood that the new model of making meat was designed to eliminate them. As a result, IBP slaughterhouses often resembled a war zone. During a months-long strike that began in 1969, persons unknown toppled the towers that anchored IBP’s in-house radio communications system, and an arsonist destroyed the home of a company executive. One gun-wielding striker confronted an IBP secretary who was believed to be providing information about the union to her bosses. He shot and wounded her, but killed her sixteen-year-old sister. Andy Anderson, who made no secret of his loathing for unions, and his colleagues refused to back down. “We’re trying to revolutionize
beef packing,” said a company spokesman. “The union is trying to prevent this.” Company executive Currier Holman packed a tear-gas gun, boasting that “business as we pursue it
here at IBP is very much like waging war.” IBP responded to the strike by importing workers from California and Mexico, offering them not just jobs, but housing, too. In mid-April 1970, after fifty-six bombings, two hundred tire slashings, more than twenty shootings, and one death, the strike ended. IBP agreed to pay 20 cents more an hour than the union had originally asked for but compensated for the loss of that battle by winning the war itself: the company refused to agree to the master contract rate paid by other unionized packers. By comparison, peace prevailed at Monfort in Greeley, but only because unions and meatpacking had a much smaller presence than in Iowa, where unionized packing plants abounded.

Unlike Monfort, IBP focused on the grocery trade, and there, too, the company battled the unions, especially in large cities, as grocery butchers resisted the invasion of boxed beef because the product eliminated jobs (a goal that grocery chain executives supported). That was especially true on the East Coast, where IBP leaders were determined to break into the lucrative big-city markets. But butchers’ unions there enjoyed intimate connections with the Mafia, and so IBP had to deal not with union officials, but with Mafia henchmen. Frustrated by the Mob’s nearly impenetrable wall, Andy Anderson consulted with the owner of one of the country’s biggest broiler companies, a man who’d managed to gain access to New York–area grocery chains. The chicken man’s advice was simple: Pay the bribes that the unions demanded; it was the only way in. The bribes opened the way, but Currier Holman, who was IBP’s president at the time and handled the negotiations, landed in the snare of a federal investigation into Mafia-union connections and was convicted of conspiracy. “I never bribed anybody
in my life,” Holman told a reporter. “It’s all a damned lie.” He got lucky: the judge who tried him viewed Holman as a “victim of the extortionate practices”
of the very people he had bribed. There were, he told Holman, “few people in American business who would have acted differently in these circumstances.” Holman avoided jail,
and IBP paid a $7,000 fine and, it should be noted, went right on paying the bribes necessary to win grocery contracts. In the end, the packer-revolutionaries had their way. Over the next decade, unions vanished almost entirely from packing plants and grocery stores. There was no room for them, literally in the case of the new streamlined slaughterhouses, in meatpacking’s future.

The clearest evidence of the rebels’ success can be measured in the declining fortunes of the old meatpacking kings, especially Armour, Swift, and another of the old giants, Wilson & Co., who remained chained both to the unions and to what Ken Monfort dismissed as “ancient and obsolete plants.”
He was right. Armour’s Chicago operation consisted of 7.6 million square feet of floor space in 121 buildings spread over eighty-seven acres. Inside, workers moved from carcass to carcass, beef slabs that still hung, as they had for eighty years, from iron hooks. Employees shoveled offal and tossed hides into wooden handcarts, trundled their loads to an elevator, waited for a car, boarded, pushed the cart off at the designated floor, unloaded it, and then retraced their steps, this time pushing an empty cart. Currier Holman, who’d grown up around packinghouses in the 1930s, recalled that “people would stand waiting
for elevators . . . for fifteen minutes at a time.” That had not changed by the 1950s and 1960s, and soaring labor costs—up 80 percent in the 1950s alone—exacerbated the old packers’ woes.

The aging titans’ problems went beyond creaky elevators and empty handcarts. By the 1960s, much of their infrastructure stood idle. Their packing plants had been designed back when farmers sent stock to market only once or twice a year, a schedule that required huge facilities to handle the onslaught. But twentieth-century feeders like Monfort sent cattle to market every month, leaving packers with real estate that gobbled electricity and contributed nothing to profits. The cavernous curing and refrigerator rooms stood mostly empty, too, as packers adopted methods that reduced curing and smoking time from two months to as little as thirty minutes. New technologies reduced by 25 percent the time needed to chill a carcass to the required sixty degrees. The “Turbo-chill”
technique surrounded the carcass with waves of “supersaturated” cold air; as a bonus, the rapid chilling also prevented shrinkage. The new methods reduced expenses but left older packers saddled with idle square footage. Add the declining value of byproducts and high union wages, and the costs added up.

The giants struggled to adapt. They pulled out of Chicago (the stockyards there closed in 1971) and sold off their urban slaughterhouses in favor of new or newly remodeled plants in rural locations in Iowa or Nebraska, New Mexico or Texas. “We’re going to spend
several million dollars to replace our 1910 plant in Oklahoma because we can’t afford not to,” said a spokesman for Wilson. “With wage rates the way they are now, we can’t go on paying people to wait for elevators.” But as one onlooker put it, the old guard “moved from very big
obsolete plants in the city to very small obsolete plants in the country.” They had little choice: unlike IBP and Monfort, Swift, Wilson, and Armour were wedded to union workers who resisted innovations that eliminated jobs, whether plant layout, processes, or machinery. So when Swift built a new plant in, say, Fort Worth, it looked different from its aging one in Chicago, but it “worked” the same. Consider two small but telling differences between old and new: In 1963, Armour constructed plants in Kansas and Nebraska. At both of the new facilities, workers shoveled offal into “gut buggies” and trundled those from kill floor to rendering department. At the Monfort packinghouse, in contrast, offal fell from the carcass directly onto a conveyor belt that whisked it away. Consider, too, the shrouds used to cloak carcasses while they chilled in the refrigerator room. At the Armour plants, workers removed those by hand and dumped them into pushcarts. At IBP’s Denison packinghouse, a mechanical arm plucked the shrouds from the carcasses and deposited them in self-propelled carts that conveyed them to the laundry. In 1967, Armour abandoned its attempt to wring profit from the two plants and sold them to IBP, which gutted them and installed automated processing systems, upping capacity from twenty-five hundred head a week to eight thousand.

The old-timers even dragged their feet when it came to the meat itself. Armour and Swift balked at the idea of frozen meats, let alone boxed beef, because their union employees resisted. But even when they manufactured value-added products, they often proved too timid to venture from familiar ground. In the 1960s, for example, Swift developed foods like “compressed bacon bars” that American astronauts carried into space. What should have been a marketing boon was not to be. Swift executives decided to keep the company’s connection to space travel locked in a closet because, as one employee said, “Suppose the moonshot fails
and those guys die up there.” The astronauts didn’t, but Swift’s opportunity did.

Ironically, for a brief time those failings made the biggest packers an attractive target. In the late sixties and early 1970s, Armour, Wilson, and Cudahy and Morrell, two survivors of the pioneering nineteenth century, were taken over by conglomerates with no experience in making meat. Why? Because, explained the president of the packers’ trade group, adding a mere “half a cent
[additional] profit” to pork or beef carcasses could jack up earnings by $50 million, a prospect that proved irresistible to corporate managers seeking diversification and new ways to bolster their bottom lines. (And probably their egos, too. Who wouldn’t want to be the wunderkind who finally taught meatpackers how to make money?) Not everyone was impressed. “What meat packing assets
are best equipped for,” scoffed one analyst, “is the luring of lambs to slaughter.” Ken Monfort had little sympathy for his bigger brethren. “After World War II,”
he said, when they “should have modernized, they didn’t. When they should have changed location, they didn’t.” So he and IBP and other revolutionaries had seized the moment. He had proved “money [could] be made in modern plants, operated well, in the right locations.” “The big packers,” he said, “follow us now, rather than lead us.”