Unions were formed to protect the little guy, but by the late 1960s, many unions had become bloated power structures that lost the sympathy of their own members. Union leaders became union “bosses,” many of them overpaid and corrupt. Violence and thuggery became all too common hallmarks of organized labor campaigns. Public approval of unions began to plummet, according to opinion polls. At the same time, companies in heavily unionized states began to move their factories down to southern, nonunion states. Rather than negotiate with unions, these companies started sneaking out the back door.
In spite of their militancy and their arrogance, union leaders like Joe Hammerschmidt were losing their power by the early 1970s. This added an element of toxicity to their efforts and a level of desperation to their actions.
Koch Refining Co., on the other hand, acted methodically and patiently. The actions reflected the thinking of the man in charge.
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Charles Koch traveled to Pine Bend, and when he arrived, he entered the refinery compound quietly. The media did not report his presence, and it appears that none of the picketers outside knew he was there.
Koch walked the grounds with Bernard Paulson and saw for himself the toll that the strike had taken. The refinery looked like a disaster site. Equipment was being run far past the required time for maintenance. The staff was minimal. Provisions were sparse. And the OCAW was not going to give up its fight.
It might have seemed unreasonable for Koch to ask Paulson to continue this fight. Paulson and his team were risking their lives each night of the strike. The refinery’s previous owners, including Fred Koch, would almost certainly have surrendered and headed back to the negotiating table.
But Paulson didn’t want to back down. And Paulson saw that Charles Koch didn’t want to back down, either. Koch and Paulson retired to Paulson’s office, which now resembled the quarters of a field general. Near Paulson’s desk was the cot where he slept most nights, the telephone always nearby. The two men sat down, and together they worked through a new budget for the refinery. With pen and paper, they sketched out new projections of revenue and production for the year.
* * *
After the crash, Bernard Paulson went back to the negotiating table with the OCAW. His position had not softened, but the union’s had. When Paulson sat down at the table, there was somebody missing: Hammerschmidt had been replaced by the OCAW’s new local president, a man named John Kujawa. Paulson felt that Kujawa was more reasonable than Hammerschmidt had been; he was less militant, more likely to listen to Paulson’s demands.
Roughly one week after the diesel train sabotage, Kujawa and Paulson began a bargaining session, overseen by a Minnesota judge who acted as a mediator. The session went on for six days. The major point of contention was not money or benefits, but work rules at the refinery. Paulson was insistent that Koch be given more control over the operations, while Kujawa and his team fought to maintain the rights the union had bargained for over the last twenty years.
At noon on March 26, the talks ended with no agreement.
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On the night of April 17, an OCAW man was driving near the refinery when he pulled over to the side of the road and removed a hunting rifle from his car.
He took aim at the electrical substation of the refinery, a large patch of electrical transformers and wires that was essentially a miniature power plant that kept electricity flowing through the plant. The man opened fire. He sent several armor-piercing bullets into the substation. One of the slugs penetrated a large transformer, which began leaking oil from its punctured hull. Employees in the refinery heard the shots, and knew quickly what they were. They called police, and a witness described the parked car where they believed the shots were coming from. The rifleman got back in his car and drove away. Police soon pulled him over because he was driving erratically and appeared to be drunk. The rifle was in the backseat, and he was arrested.
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On June 2, 1973, John Kujawa traveled to Washington, DC, to testify before Congress. A joint House and Senate committee was investigating national fuel shortages, and part of the inquiry examined the supply disruptions in Minnesota caused by the strike at Pine Bend. Almost six months into the strike, it appeared that Koch and the OCAW were no closer to an agreement than they were when the strike began.
Kujawa and Paulson continued to meet even though neither seemed to have faith in the process. Paulson even flew to Washington to meet with Kujawa and his team of OCAW negotiators. The two camps met at the US Department of Labor, and during their session, the US secretary of labor himself came into the room to talk with the opposing negotiators. The secretary’s message was clear: “Let’s work this thing out.”
During the negotiations, Koch’s team and the union’s team were sent to separate conference rooms. A mediator shuttled back and forth between the rooms passing demands and counterdemands back and forth. The sessions went on through the night. At one point, Paulson laid down on a conference table and fell asleep while waiting for the courier to return from the OCAW’s room.
It was useless. Even prodding from the labor secretary could not push the two sides to an agreement. The kernel of the dispute still remained the work rules at the refinery. It was a fight over control, and neither side would budge.
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Koch Refining Company offered a $25,000 reward for information leading to the arrest of whoever had sent the diesel train crashing into the plant. But the money never induced anyone to come forth with information about the diesel engine sabotage. The reward was never collected, and an arrest was never made. And the picket line remained outside the refinery even as the employees entered their seventh month without a paycheck from Koch.
But Bernard Paulson and Charles Koch seemed to understand something intuitively. They understood that solidarity had its limits. The OCAW’s cohesion was unbreakable. But the OCAW would be weaker if it stood alone. In fact, it was doubtful if the OCAW would be able to stand at all if it was alone. Isolating the union would prove to be the only way to beat it. During the summer and fall of 1973, that’s exactly what happened.
At that time, Paulson needed to perform maintenance at the refinery and install new equipment. The repairs could be delayed no more. But the companies in Minnesota that could do the specialized work were largely unionized, and they would not cross the picket line to do the job. Paulson had faced this problem before, during his days in Texas. When he ran the refinery there, he often hired both union and nonunion companies to do maintenance work at the facility. During one project, Paulson had two companies—one unionized and the other nonunion—working at the refinery simultaneously. The unionized firm said it would walk off the job unless the nonunion firm agreed to let its workers organize. It was a high-pressure ultimatum, and Paulson responded by calling the union president personally.
“I knew him. I knew he’d come from Oklahoma. So I got him on the phone. I said, ‘You damn Oklahoma squirrel hunter,’ ” Paulson recalled. “I said: ‘Look. You go ahead with what you’re trying to do, and I will only do one of these units at a time. I will do it nonunion, and you union guys won’t even be in the plan.’ So he backed down from that.”