Out here on the prairie, almost within earshot of the consumptive rattles of the big steel and automobile centers, one view of the future of American industry is taking shape, and it is not without a sweeter side, no pun intended.
This future involves computers and people, but here at the A. E. Staley Manufacturing Co.'s plant, where corn is converted to high-powered syrup, the story really is about people.
Workers have taken over the Staley plant -- not by force, but by management fiat from the home offices in Decatur, Ill.To no one's real surprise, it's working like a charm.
The sudden rise of the high fructose corn syrup (HFCS) industry in itself is fascinating enough, but there's more to it than that. Staley is pioneering management techniques that are as compelling as the automation making the plant one of the most modern in the sweeter industry.
Since it opened in 1977, the $120-million plant has been expanded twice -- in part because demand for HFCS has grown by quantum leaps, in part because workers keep exceeding production goals that Staley regularly sets for them.
All 240 employes, management or not, are on salary. There are no time clocks. Plant workers, set up as teams, decide who is hired, who is fired; who gets a raise, who doesn't; who works when, who needs discipling for not doing his or her share.
In keeping with their added responsibilities, the nonunion plant workers here are paid more and have heftier benefits than their brethren in other unionized Staley corn and soybean processing plants in the Mid-west.
Involvement of workers in some of the basic decisions that rule their lives is not that revolutionary in American industry. Such household names as Du Pont, Alcoa, Procter & Gamble and Texas Instruments, among others, have moved in that direction.
But there in Lafayette, it is being taken farther, faster than elsewhere and the results -- steadily increasing production, notable efficiency, pride in work and team spirit -- are laden with implications for the troubled U.S. industrial machine.
"Our industrial division came up with this when they designed the highly automated system for Lafayette," said John Homan, the plant manager. "They thought there had to be a better way to run a plant than the traditional approach. Obviously, we could make mechanical improvements. Why not try it with human resources?"
One of the first of the human resources affected was Homan himself, a relaxed, low-key Staley veteran who grew up in an era when plant managers were kings of small fiefdoms where the serf, if you will, scraped and bowed.
"I worked in those traditional, unionized plants. So I had a terrific education when I came here. I was very skeptical about this new system. But I'm no longer a skeptic. I'm sold on this system," he said the other day.
"The key is building trust," Homan added. "We have very few rules here. Management trust becomes the overriding item. Our taskforce method of organizing workers in small groups [10 to 15 workers in each] does that. You're being up front with everything."
When Ronn McFatridge, then a personnel man at Banquet Foods, heard what Staley was up to in Lafayette, he rushed to get on board. This was the kind of stuff theorists wrote about but which corporate managers rarely tried.He now heads personnel here.
"There are less than 20 plants in the United States -- or the world -- doing what we are doing," McFatridge said. "It is tremendously rewarding to work with people and have them come to the same decisions as management people. That becomes a problem for management. They ask what s my role here?"
After McFatidge singles out potential hires, he calls in the work teams the new employes will be assigned to. They conduct their own interviews, probing compatibility and attitude and then make a decision.
Something works in this. Turnover is one half of one percent. Last year only 12 of 240 employes left and nine of those departed by invitation of fellow workers. An older sister plant in Pennsylvania had turnover of 28 percent in the first year and in the 20 percent range the second year. Absenteeism here is 1.4 percent; at the Pennsylvania plant, 3 to 4 percent.
The success at Lafayette could not have come at a better time for Staley, one of the giants of the corn wet-milling industry that produces everything from gin and vodka to corn starch, corn oil and alcohol fuel.
Research breakthroughs in the mid-1960s at the Clinton (Iowa) Corn Processing Co., an arm of Standard Brands, opened a vast new market in corn syrups and left the giants battling each other for position and advantage.
The Iowa fir was the first to go commercial with the new high fructose syrup, derived from corn starch. Staley followed shortly thereafter, as did other industry competitors, and the race was on.
The nod they were waiting for came last year when Coca-Cola and Pepsi Cola, as well as the other major soft drink bottlers, finally agreed that high fructose syrup could be used in their recipes as a sugar substitute. HFCS is as sweet as cane or beet sugar, and its cost is lower. As sugar prices rose in the 1970s, HFCS became increasingly attractive.
Staley began producing HFCS at Decatur in 1971, opened a new plant in Morrisonville, Pa., in 1972, moved into Lafayette in 1977 and now is building a fourth plant at Loudon, Tenn. When London opens, Staley will have a 3.3 billion pounds-per-year capacity.
Slightly more than a third of that will come from Lafayette, where today more than 90,000 bushels of corn -- the product of about 800 acres -- are converted into HFCS every day.
The key to making this work is the smoothness of function at Homan's plant, where he said, money is no longer a motivator of workers.
Added McFatridge: "After a certain level of pay is reached, you are not going to motivate them more. The work teams here say they want a part of the action, they don't ask for more money. Money and fringe benefits are temporary satisfiers. This system puts together theories that many have written about, but few have tried."
Charlie Ogden, who has been in the wet-milling industry 17 years, is one of those motivated workers McFatridge talked about. iOdgen was elected by fellow workers to be a team leader after he moved here from Iowa in 1977. He'd never go back to traditional ways.
"Don't say these guys on the team work for me," Ogden said. "They work with me. As long as we make our production goals, we are self-managers. We're more free. We work together more, there is no finagling around. People help each other without being told. There is 100 percent better spirit. You don't see discontentment as you do in other places. You might say the people here don't know when to quit."
Larry Schwab, an engineer, pointed at a graph on the wall of the computer control room, indicating plant progress in meeting the company's April production goal. The graph line moved steadily upward and was heading clearly off the chart -- another month in which output is likely to surpass management's goal.
"The guys push hard to make the system work," Schwab said. "This is exciting for me. Because we're making money, I have engineering green lights that I wouldn't have otherwise. I can do new things with the process. This plant is the cream of the crop."
In this easy-going atmosphere, management retains only a few prerogatives. One is the pay scale. Another is production goals. A third is safety goals. The rest is up to the work force.
When Staley told the workers here to figure out a schedule, they came up with another twist. They voted to work 12-hour shifts on three consecutive days, then take off three days and return to work three more consecutive night turns of 12 hours each. Everybody gets day work; everybody gets night work.
One of the obvious advantages is that on every other cycle, each employe has nine straight daylight periods at home. In a part of the country where many farmers, aspiring and otherwise, work another job, that's a benefit of incalculable dimension.