Fast Food Nation - Eric Schlosser [89]
In 1982 the slaughterhouse in Greeley reopened without a union, paying wages that had been cut by 40 percent. Former workers were not offered jobs. Instead Monfort transferred some employees from its Grand Island plant and hired new ones. Although Ken Monfort decided to follow IBP’s tough policy on labor unions, he strongly resisted the increasing consolidation of the meatpacking industry. During the early 1980s one independent meatpacker after another either went out of business or was purchased by a large corporate rival. In 1983, Monfort sued Excel — the nation’s second-largest beef processor — to prevent it from acquiring Spencer Beef, the nation’s third-largest beef processor. Monfort argued that the proposed acquisition would allow Excel to engage in predatory pricing and to reduce competition. A panel of federal judges ruled in favor of Monfort, but Excel appealed their decision to the U.S. Supreme Court. President Reagan’s Justice Department submitted a brief in the case — and argued on behalf of Excel, claiming it had every right to buy a rival company.
The Reagan administration did not oppose the disappearance of hundreds of small meatpacking firms. On the contrary, it opposed using antitrust laws to stop the giant meatpackers. In 1986 the U.S. Supreme Court overturned the earlier ruling and approved the merger of America’s second- and third-largest meatpacking companies. The following year, Monfort agreed to a friendly takeover by ConAgra. “It seemed to me that if the industry was going to be concentrated,” Ken Monfort explained, “there should be at least three large players instead of just two.” As part of the deal, he became a top executive at the company, head of the ConAgra Red Meat division, and his family received about $270 million in ConAgra stock.
By purchasing Monfort, ConAgra became the biggest meatpacker in the world. Today it is the largest foodservice supplier in North America. In addition to being the number-one producer of french fries (through its Lamb Weston subsidiary), ConAgra is also the nation’s largest sheep and turkey processor, the largest distributor of agricultural chemicals, the second-largest manufacturer of frozen food, the second-largest flour miller, the third-largest chicken and pork processor, as well as a leading seed producer, feed producer, and commodity futures trader. The company sells its food under about one hundred consumer brand names, including Hunt’s, Armour, La Choy, Country Pride, Swiss Miss, Orville Redenbacher’s, Reddi-Wip, Taste O’Sea, Knott’s Berry Farm, Hebrew National, and Healthy Choice. Although few Americans have heard of ConAgra, they are likely to eat at least one of its products every day.
Twenty years ago, ConAgra — a combination of two Latin words whose intended meaning is “partnership with the land” — was an obscure Nebraska company with annual revenues of about $500 million. Last year ConAgra’s revenues exceeded $25 billion. The company’s phenomenal growth over the past two decades was driven by the entrepreneurial spirit of its longtime chief executive, Charles “Mike” Harper. When Harper took over ConAgra in 1974, it was losing money, the market value of its stock was $10 million, and the value of its debt was $156 million. According to the company’s official history, ConAgra Who? (1989), Harper promptly instituted a new corporate philosophy. “Harper told each general manager that he’d been given a bag of money,” the company history explains, “and that at the end of the year he’d be expected to return it – plus a little extra.” He gave each of his top executives a personalized, inspirational plaque. On it was a cartoon of two vultures sitting in a tree. “Patience, my ass,” one vulture says to the other. “I’m gonna go kill somebody.”
The intense pressure to return a bigger bag of money every year has prompted a number of ConAgra employees to break the law. In 1989, ConAgra was found guilty in federal court of having systematically cheated chicken growers in Alabama. During an eight-year