The Company Town

by Hardy Green

  For itself, the Kohler family erected a mansion called Riverbend, located not far from the company offices and foundry and adjacent to the Sheboygan River. Proud of its Austrian heritage, the family had long been at the center of Sheboygan cultural, social, and political life. In the 1890s, company founder John M. Kohler held several public offices including the mayoralty—he was endorsed by the Sheboygan Telegram, which cited his efforts in building the town’s harbor and in local charity. His four sons were active in politics and various cultural institutions, with one son, Walter Sr. (founder of Kohler Village), and a grandson, Walter Jr., both serving as governors of Wisconsin.

  By the mid-1930s, Kohler Village consisted of the company’s 191-acre works—including a headquarters, foundry, ceramics plant, engine-making plant, and design center—along with 450 houses, half occupied by company officials and office workers and half by production workers. These residents composed less than 10 percent of Kohler’s total workforce, but their experience had a big impact on company-employee relations. The American Club, which included a dormitory and eating hall, accommodated unmarried plant workers. Kohler Co. also financed fine schools and a large public auditorium. The village was governed by an elected board, which was nevertheless easily moved to rubber-stamp all company proposals.

  Moreover, company employees benefited from Kohler corporate-welfare measures, including group life insurance, a pension plan, and banquets for the many recently naturalized U.S. citizens among the workforce. Into the 1920s, wages of Kohler’s 4,000 workers were higher than those at other area employers.

  But as the Depression set in, labor relations deteriorated. Layoffs were concentrated among those who did not live in the model village. Those who continued working saw dramatic cuts in hours, and the wages of village residents were often garnished to pay home mortgages held by the company-affiliated Kohler Building and Loan Association. Checks issued for two weeks’ work were for as little as 85 cents. Although the company continued to see itself as a generous, empathetic employer, Kohler workers decided they needed union representation, and turned to the American Federation of Labor (AFL), forming Federal Labor Union No. 18545. Thus began a thirty-year struggle for union recognition, marked by two violent strikes.

  Initially, the company responded by forming a company union, the Kohler Workers Association (KWA), which it openly supplied with equipment and manpower. In July 1934, following a few bouts of unproductive negotiating with management, the AFL union went out on strike. Actions and rhetoric escalated quickly, with the union turning to mass picketing involving up to 4,000 people at the plant and management refusing to bargain with “law violators.” Kohler Village employed 1,000 “special deputies” and armed them with machine guns, rifles, tear gas, and clubs. Only ten days after the strike began, a confrontation between these deputies and pickets led to rioting and violence in which forty-nine strikers were shot, most in the back, and two were killed. The Nation opined that the labor conflict signified “the rise and fall of America’s most widely advertised venture in industrial paternalism.” The issue quoted the testimony of federal mediator Father J. W. Maguire: “I have been in many strikes, but I never saw such needless and ruthless killing by supporters of the law. . . . You don’t have to shoot people in the back when they are running away!”

  Later that year, the National Labor Relations Board held a union-representation election, with both strikers and nonstrikers being allowed to vote. The result was a victory for the company union, KWA. That organization ran a campaign that utilized both petty bribery—cigarettes, candy, and sandwiches were distributed on the shop floor—and intimidation, with supervisors instructing workers to vote for KWA. Picketing by Local 18545 continued at the plant until 1941, when the company agreed to a contract with KWA so it might win more war contracts from the government.

  In fact, the company’s antiunion attitude remained, and another vicious strike broke out in 1954. Over the years, substandard pay and hazardous working conditions had prompted a change in the KWA, which became more militant and in 1952 affiliated with the United Auto Workers /CIO. It negotiated one contract with the company, but then Kohler dug in its heels. As the strike date approached, the company again adopted a siege mentality: Guards armed with shotguns, tear gas, and revolvers moved into the plant. The company also hired two private-detective agencies to spy on union supporters—and also, it later emerged, on National Labor Relations Board investigators. Kohler reopened its factory, utilizing a workforce of those who crossed picket lines and of new employees, and it made no effort to bargain with the union. For its part, the UAW once again employed mass picketing and demonstrations, and ultimately sponsored a nationwide boycott of Kohler products.

  Despite numerous efforts at conciliation involving various elected officials, clergy, and others, the strike stretched on for eight years. In 1957, a U.S. Senate committee investigated what had become the country’s longest-running labor dispute. Before that committee and elsewhere, company officials were open about their thinking. Chief counsel Lyman Conger—balding, thin, and bespectacled, the very picture of a tightwad—said he believed that the union was “trying to overthrow all industry, not just the Kohler company, but all industry.” Herbert V. Kohler, who was now the company’s president, accused the union of promoting “class hatred” and serving “the Marxian doctrine.”

  Over the years, the company consistently accused “outsiders” of stirring up the labor discontent. In response to the union boycott, Herbert Kohler maintained a busy schedule of speaking to business groups across the country. Before a Salt Lake City audience, the portly, Teutonic executive maintained that UAW President Walter Reuther was “a Moscow-trained socialist.” (Reuther was in fact a staunch anticommunist.) Kohler offered many complaints about the union, especially union “violence.” But the true sticking point seemed to be what he saw as the union’s attempt to usurp management rights in such matters as shop rules, merit pay, subcontracting of work, and working hours.6

  The walkout finally ended thanks to the 1960 intervention of the National Labor Relations Board, which ruled it an “unfair labor practice strike” and said that by law all strikers must be restored to their jobs. The U.S. Supreme Court ultimately upheld that ruling, and in 1965 the company agreed to pay $4.5 million in back wages and pension money to settle all unfair labor practice charges. Several one-year contracts were subsequently negotiated with the UAW.7

  So, what happened over subsequent years to turn Kohler Village from a maelstrom of class warfare into a bliss-inducing locus of heated-rock massages and gourmet food?

  I tried to ask, but the company said its current CEO was unavailable for comment. It could just be that the change was motivated by golf—and, perhaps, modern marketing.

  By the early 1970s, the older generation of Kohler corporate leaders was gone from the scene. Herbert V. Kohler Sr. had died in 1969, and in 1972, thirty-three-year-old Herbert V. Kohler Jr. became company chairman and chief executive. In time, Junior would establish a reputation as a world-class golf nut. He would develop four primo golf courses in Wisconsin and purchase two shrines, the Duke’s Course and the Old Course Hotel, in the birthplace and mecca of the sport, St. Andrews, Scotland. In 2006, the Wall Street Journal would call such endeavors “vanity projects,” suggesting that they made no economic sense. In addition to Herb Kohler, other “golf-bewitched billionaires,” according to the Journal, included Reebok International founder Paul Fireman and investor Charles Schwab, each of whom had constructed on the choicest bits of real estate, golf links that were for duffers the ne plus ultra.

  But another line of argument, promoted in the same publication, suggested that such courses were simply the shrewdest kind of marketing. Along with such brands as Viking stove and Cuisinart kitchen appliances, Kohler had chosen to generate a greater awareness of its brands via oases aimed at tourists. Just as Viking had constructed a posh hotel near its Mississippi headquarters—complete with a mud-bath- and massage-ready spa—Kohler’s
St. Andrews and Wisconsin hotels and golf courses were “a very big part of its image,” in the terms of a company spokeswoman. The Old Course Hotel—no landmark-status restrictions there, it seems—would soon sport Kohler faucets and bathroom fixtures, Ann Sacks tiles (another company-owned brand), and Baker Furniture (ditto). In the Wisconsin town, one could tour the factory and the company Design Center, and then repair to the links to get in at least nine holes, all in advance of happy hour.8

  If Kohler Co.’s unusual grab-bag of enterprises—resorts, bath fixtures, furniture, small engines, and generators—strikes some as weird . . . well, no matter. Kohler is virtually a privately held company, thanks to a 1998 arrangement that placed control of voting shares in a family-owned trust and issued nonvoting stock to other shareholders.9

  Moreover, the evolution of the company and its town represents not so much a repudiation of America’s industrial past as an adjustment to modern economic realities. The trend of deindustrialization is well-advanced in the United States, having first been described in the late 1970s. Americans now live in a postindustrial society, where industrial work has come to seem a bit quaint, even campy. Kohler factory tours are handled by old-timers demonstrating hallowed verities—as when a quality-control inspector strikes finished toilets with a mallet, seeking that crystal-goblet-like sound that ensures it to be free of defects.

  That same adjustment to modern economics can be found in many other places. In Hershey, Pennsylvania, there are no tours of the chocolate-making plant (tourists might bring germs in with them, it seems). But visitors can still take a twelve-minute ride through a simulated chocolate factory—Hershey’s Chocolate World—and absorb just how those chocolate Kisses and Hershey bars are made. Once that excursion is at an end, there is—after a store where visitors are welcome to buy as much candy as they’d like—HersheyPark, the 110-acre Disneyland-like playground that offers rides, live entertainment, and “photo opps with HERSHEY’S Product Characters.” There’s an eleven-acre zoo, botanical gardens, four golf courses, and more. Hershey also bridges the gap between fun sites and more education-oriented locations: The Hershey Museum offers a glimpse of the company’s history, and Hershey Community Archives provide scholars with a range of historical materials including photographs, diaries, and oral-history interviews with company veterans. 10

  Lowell, Massachusetts, may be the apotheosis of the historic company town as educational experience. The Lowell National Historical Park, operated by the U.S. National Park Service, gives visitors a glimpse of cotton-mill labor: In a weave room in the former Boott Cotton Mills, workers show off operating looms. As protection against the shattering noise, guests are handed earplugs as they enter the area. A nearby boardinghouse exhibit demonstrates what it was like to be a Lowell mill girl in the 1840s—what they ate, where they slept, and how they spent their working lives and free time. There’s also a working water wheel/turbine and boat tours on the canals and river. The national park features numerous music and arts festivals, youth programs, a day camp, and a summer music series with such performers as Los Lobos and Hot Tuna. The New England Quilt Museum has its own quilt festival. The American Textile History Museum spotlights the art, science, and history of textiles. And there are numerous scholarly and historical enterprises on the fringes of the national park, including the Center for Lowell History and the Tsongas Industrial History Center, which offers resources to public schools.

  As a good stopover point that’s more than halfway between New York City and Niagara Falls, Corning, New York, welcomes thousands of tourists each year. The world-class Corning Museum of Glass features stunning art-glass displays, glassblowing demonstrations, historical exhibits on how the company came to make such products as Corningware and fiberglass, and workshops in which kids get to construct their own vitreous souvenirs. On downtown Market Street a short ride away, there’s the Gaffer District with various shops, restaurants, and outdoor concerts including seasonal harvest and tree-lighting festivals. The town also is home to the Rockwell Museum of Western Art and a Ladies Professional Golf Association tournament, and it’s just a hop to the Finger Lakes wineries and Watkins Glen car racing.

  Not even remote coal towns are exempt from makeovers for the tourist trade. In Colorado, where miners once exchanged rifle fire with vigilantes and militiamen, skiers now schuss down the slopes. Crested Butte, once home to silver and coal mines, features a resort with sixteen ski lifts capable of handling more than 20,000 people per hour. There are 121 trails, a superpipe for snowboard daredevils, a kids’ park, and a variety of jumps and intermediate runs. Vacation home developments have surged in the Purgatoire Valley near Trinidad, site of the 1913 mass labor march that preceded the events in Ludlow.

  And perhaps the most unlikely tourist traps of all exist at the former Manhattan Project towns of Oak Ridge, Tennessee, and Hanford, Washington, where visitors are allowed to examine no-longer-used bomb-making facilities, now designated as National Historic Landmarks. In Oak Ridge, visitors get to view Y-12 and K-25, and at X-10 they see an actual graphite reactor and its control room. The Museum of Science and Energy features “atom-smasher” demonstrations. Hanford, with its five “cocooned” nuclear reactors and radioactive-waste deposits, is one of the most toxic sites on the planet. Nevertheless, the Energy Department conducts tours there of the B Reactor, described by the New York Times as a “three-story square of iron, steel and Masonite housed in a block of graphite.” Visitors get to inspect the control room as the tour guide explains why the remote site was chosen for the Manhattan Project and how plutonium was produced. After the tour, Hanford visitors can take in the splendors of the adjacent Columbia River and consider the abundant flora and fauna in the surrounding Hanford Reach National Monument. Once again, the area sports wineries and golf courses to complement its warm climate. 11

  One final—for now—development merits observation: the burgeoning of remote outposts of new high-tech industries. Among these are Google’s data centers across the U.S., including its Project 02 on the Columbia River in Oregon, and the solar-energy installations in the Southwestern deserts. But can these be anything like company “towns” if the residents are primarily machines tended by a few humans?

  Every one of Google’s data centers costs the company around $600 million, but only two hundred human attendants are necessary to mind the generally fail-safe equipment. The huge center near The Dalles, Oregon, consists of three mammoth, low-slung buildings on thirty acres, housing tens of thousands of inexpensive processors and disks. All this computing power generates lots of heat—and so large rooftop cooling systems are necessary. Also within the fenced perimeter are an administration building, an electrical substation, and a “transient employee dormitory building.”

  As negotiations to make arrangements proceeded during 2005, Google insisted upon secrecy to keep competitors Microsoft and Yahoo in the dark, making local officials sign confidentiality agreements. But when Google went public with its $1.87 million land purchase that year, the natives waxed enthusiastic about the millions of dollars in investment they saw forthcoming, along with the fifty to one hundred jobs that would be created, each paying an average of $60,000. Fifty to one hundred jobs from deep-pocketed Google—that’s all? In the United States today, people take what they can get.

  A big draw for Google: plentiful and cheap electricity, supplied by Bonneville Power’s hydroelectric and nuclear-power facilities. Google negotiated a guarantee of the electricity along with tax exemptions and a city-built fiber-optic network. Manpower was not a major concern.12

  Google is not alone in building such installations. Microsoft and Yahoo also have data centers in the Columbia River region, near Quincy, Washington. Moreover, data centers are sprouting across the globe—in Siberia and Ireland (Microsoft) and in China (AT&T). For all of these companies, the main attraction is cheap power. 13

  Solar-energy outfits are also on the edge of a building boom, particularly in such remote areas as the deserts of the American
Southwest where sunlight is plentiful. Solar-thermal company Stirling Energy Systems has numerous projects afoot, including plans to build the “world’s largest solar energy generating plant” on 6,500 acres in California’s Imperial Valley desert. The facility would include 30,000 solar-energy concentrators—each one composed of a mirrored dish forty feet in diameter, an engine that’s driven by the heat from the dish, and an electric generator powered by the engine. Far from a pipe dream, the company already has agreements to supply power to San Diego Gas & Electric and Southern California Edison. A different technology—perhaps the one most familiar to most Americans—uses photovoltaic panels. Largely associated with private-home-rooftop applications, SunPower Corp. and OptiSolar are now employing the panels in large projects, including two big plants announced in 2008, both in San Luis Obispo County, California.14

  With twenty-five states so far having mandated a greater use of “green power”—California now requires that 33 percent of its electricity come from renewable sources by 2020—solar, wind, and wave technologies could play a big role in the country’s energy future, provided the companies can get costs low enough to compete with coal-fired plants.15