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ST.LOUIS POST-DISPATCH BUSINESS SUNDAY, NOVEMBER 11, 1990 ESECTION I By Robert Steyer 01 the Post-Dispatch Staff : Ten years ago, the John F. Queeny Plant in St. Louis made 24 chemicals and employed 1,274 people. Today, the plant, named after the founder of Monsanto Co., makes eight chemicals and has 374 workers -- a 56 percent drop in employ ment. Next year, the numbers or workers and products will decline even more. The Queeny plant offers a dramatic -- but hardly the only -- example of a company whose work force Is shrinking as Its sales are rising. Monsanto's Worldwide Employment In Thousands Between 1979 and 1989, ---------------------Monsanto reduced Its world **sL l Mi wide payroll by 34 percent as sales rose by 40 percent. Many cuts have come since 1985, as Monsanto has changed from being a heavy producer of commodity chemicals to a company that emphasizes making special- The new Monsanto has sold small businesses like AstroTurf and large businesses like silicon wafers. ss- Ml 45 If 1979 I' X'jiS i 80 81 82 W 1i 83 84 !' !. 85 86 87 88 89 lzed products -- drugs, an Source: Company reports Post-Dispatch Chart artificial sweetener, a fat substitute -- as well as traditional chemicals. -- and a bigger return to shareholders. At the corporate headquarters In Creve The new Monsanto has sold chunks of the old But another result has been a smaller corpo Coeur, employment rose to 5,131 In 1985 from Monsanto, including small businesses like Astro rate presence on Monsanto's home turf: 4,002 in 1980 -- but the payroll had dropped by Turf, pioneer businesses like aspirin and large At the W.G. Krummrlch Plant In Sauget, 11 percent to 4,566 last year. These figures In subsidiaries like the one that made silicon wa total employment dropped by 36 percent be clude scientists at such sites as the Chesterfield fers for the semiconductor-chip Industry. tween 1980 and 1989, and the number of prod research campus. New technologies have made some workers ucts made there Is down to 12 from 24. More cuts are In the works. Monsanto said last unnecessary. New strategies propel Monsanto The Carondelet Plant In South St. Louis, month that It would pare 300 people, or 9 per away from goods that are labor-intensive to Monsanto's smallest plant here, lost 14 percent cent, from the salaried staff of its agricultural produce and have thin profit margins. . of its workers between 1985 and 1989. subsidiary. Competition, rising environmental costs and Monsanto Electronic Materials Co. was sold At the Queeny Plant, where union workers the Incessant drive for manufacturing efficiency have forced Monsanto to consolidate production, thereby cutting more jobs. In April 1989 to a German company, Huels AG, removing from Monsanto's payroll 1,097 people In O'Fallon, Mo. MEMC didn't fit Monsanto's negotiated a three-year contract in August, Mon santo said 108 of 243 hourly workers will lose their Jobs early next year as the plant cuts to four The result Is a bigger bottom line -- Monsanto long-term strategy, the company said. Huels con from eight the number of chemicals it makes. scored record earnings of $679 million last year tinues to operate the O'Fallon plant. See MONSANTO, Page 5 Sam Leone/Post-Dispatch Plant manager William J. Boyle outside Monsanto's W.G. Krummricli plant in Sauget. . " Total Monsanto Employment In St. Louis Area* In Thousands * Includes workers at corporate headquarters, reasearch facilities and the Queeny, Krummricn and Carondelet plants. For 1990 end 1985, chart Includes workers at thr Monsanto Electronic Materials Co. plant In O'Fallon, Mo. Last April, this subsidiary was sold, so the 1969 figure excludes these employees. Post-Dispatch Chart OSW 135233 STLCOPCB4035204 BUSINESS ST.LOUIS POST-DISPATCH SUNDAY, NOVEMBER 11, 1990 5E Monsanto From page one Sixty of 131 salaried employees at Queeny will be dismissed within 18 to 24 months. Workers And Managers Fewer products, fewer workers and greater competition for business among Monsanto's plants create a dif ferent atmosphere within each plant. The result is a changing relation ship between management and labor. "It hasn't been easy. There's been a lot of give and take," said William J. Boyle, who became the plant's manag er In September 1987. "We definitely have our tjlffer- ences, but some changes have defi nitely been for the better," said Ed McCormick, president of Local 12 of the International Chemical Workers Union, which represents hourly em ployees at the Krummrich plant. Boyle and McCormick agreed that greater harmony has been produced by the union's taking a greater role in plant safety. "We feel that safety Is being more emphasized by the company than it was five or 10 years ago," McCormick said. Boyle proudly displayed a chart showing that the Krummrich Plant had the lowest illness and injury rate this year of any Monsanto plant em ploying more than 150 people. Boyle said he asked the union in early 1988 for its help in improving safety. The union drew up a safety program, which McCormick said em phasized retraining violators rather than the disciplining them. The new program went into effect In April 1988. ' . "The union took a leadership role," Boyle said. "It's not that the power never existed. It's Just that it wasn't perceived as so." Dennis Burton, vice president of Lo cal 12, said that before Boyle became plant manager, union members were reluctant to participate in manage ment-labor safety committees be cause they considered them to be "top-down" committees offering little chance for workers' opinions. The program gave the union a greater role in enforcing safety. "We still needed permission from the bosses," McCormick said. "But we en couraged our people to take a leader ship role on safety committees be cause they are run from a workers' point of view." Crucial differences remain. As Krummrich's work force shrinks, new contract language calls for `work re design,' which could expand or dimin ish workers' duties. "Details are not firm," McCormick said. "We have dif ferences on how that should be imple mented." Plant And Customers Boyle said his plant's willingness to listen to workers is matched by its willingness to listen to customers. Boyle has given customers greater access to the plant, allowing them to audit certain activities and visit plants to examine safety procedures. Two years ago, a buyer of chemi cals for rubber products suggested that Krummrich change the way it audits production quality so that oper ators on the factory floor can detect problems faster. "In the past, supervisors did most of it," Boyle said. "They [the client] made the suggestion and we listened." Since 1985, the plant has been creat ing "quality improvement teams," a mixture of managers and employees who try not only to upgrade Krumm rich but also to help customers. Monsanto Employment By Unit John F. Queeny Plant* W.G. Krummrlch Plant* 1 400 1,200 1,400............................................ 1,000 ill800 600 114 200 H 1980 1985 1989 Carondelot Plant* 300' 250 i a n|200 100 8 850 --------------------- 1980 1985 1989 1980 1985 1939 Monsanto's Headquarters** 11,0"'"""................... "" * Hourly and salaried workers * * Including research staff In St. Louis area Source: Company reports Post-Dispatch Chart For example, the plant set up a' team with a neighboring company to improve sales of phosphorus pentasulfide, a chemical used for petroleum additives. "We worked to upgrade our service to Improve unloading of the bins, pre vent caking of [the chemical], narrow the variability of the volumes in the bins and make sure delivery was on time," Boyle said. One of every three employees Is now on a team, and most have partici pated at least once, Boyle said. One Product Stays Boyle has taken these steps because Monsanto tells plants they must com pete for new business and for goods whose production is being consolidated. "This is not dog-eat-dog competi tion," said Stephen T. Robinson, direc tor of the rubber and process chemi cal manufacturing division of Monsanto's chemical subsidiary. "We don't just go to a site with the lowest cost of production," he ex plained. "We look at the safety perfor mance, the environmental Issues and the quality of performance at a partic ular site." A new plant doesn't have an auto matic advantage over an old plant. "In some cases, the older site has an ad vantage because of a skilled work force and environmental treatment facilities in place," he said. Six years ago, for example, Monsan to executives decided to improve pro duction of Santoflex, which had been made at the Krummrich Plant since the mid-1950s, Robinson said. Santoflex enables rubber products to be more flexible and resistant to cracking. It is used primarily for tires, but it also is found in fan belts, hoses, conveyor belts and windshield wipers. "We thought about replacing the ex isting facility at Krummrich, and we looked at three other [U.S.] sites," Robinson said. New machinery at Krummrich would have cost between $18 million and $20 million. New machinery at the other sites would have cost about $1 million more, but Monsanto would have had to train the workers and make some adjustments at other plants. "We decided to stay at Krummrich because of their track record," Robin son said. "Their people had the exper tise In manufacturing and technology, and they were well-positioned In the marketplace." Other Products Leave The changing marketplace, howev er, puts some plants at a disadvantage. Take, for example, the Queeny Plant, which makes alachlor, the main in gredient in Lasso herbicide. Queeny has produced alachlor and a related chemical, chloroacetyl chlo ride, for nearly 20 years. But Monsan to will transfer their production to Its Muscatine, Iowa, plant In eight weeks. Robert Fields, director of manufac turing for Monsanto's agricultural subsidiary, said the company had been thinking about consolidating alachlor production for seven years for several reasons: The Iowa plant makes about 75 percent of the herbicide. Alachlor sales peaked In the ear ly 1980s due to increasing competition from other herbicides that are used on corn and soybean crops. As sales declined, unused capaci ty Increased. Queeny's alachlor unit Is operating at 25 percent of capacity; the Muscatine plant Is at about -85 percent of capacity. Federal laws require Monsanto to spend more for environmental protec tion, and a $6 million project will be completed at Muscatine by early 1992. "We would have had to make the same investment -- if not more -- at Queeny if we kept producing," Fields said. Each year, Monsanto pondered con solidation. And each year, until early 1990, the company said both plants should continue making alachlor. "There was an uncertainty about the volume of sales due to. competi tion, and there was uncertainty about acetochlor [a new corn herbicide]," Fields said. Acetochlor has been under review by the Environmental Protection Agency since 1987. The Queeny Plant makes the chemical, which is sold In four countries, but production will be transferred to Muscatine by year-ertd. Even if the EPA approves acetoch lor and Monsanto expands overseas sales, Fields said there Is little chance that Queeny would be reactivated for making herbicides. CORRECTION Although one U.S. patent on glyphoshate, the key ingredient in Monsanto Co.'s Roundup herbicide, expires ;in 1991, another U.S. glyphosate patent remains in effect until the year 2000. And although the U.S. patent for aspartame, the key ingredient in the artificial sweetener sold as NutraSweet, expires In December 1992, a patent for a blend of aspartame and saccharin remains In force until 1996. A Nov. 4 article failed to discuss all the intricacies of patent protection for these Monsanto products. STLCOPCB4035205 DSW l*523'1