(Revisiting the past)
Recent events have motivated me to resurrect and edit an unpublished memoir of my years as a mill manager in Venezuela. I may have learned more about life in the real world in the years of 1966 to 1974 than any experience I’ve had before or after.
Now, with time for reflection on those years, I have acquired more insight into that experience than I have ever before been able to articulate. Human society around us has many layers. But most Americans have lived in a world of innocence and security, sealed off from the ugly layers that lie below: human desperation, sordidness and sometimes, just plain evil. It has always existed so near to us, but it seldom surfaces into our personal lives.
There is also another world above our own that some of us may have experienced. It is made up of senior managers and decision-makers who are so insulated from the effects of their decisions and actions on the people below, that workers, especially the labor force and clerical support staff, are dealt with as assets, not as human beings. Witness in recent years the cynical rape with impunity of pension funds and private savings by senior financial managers and those who were entrusted with their oversight.
My job as plant manager in Maracaibo(1969 to 1974) was an apprenticeship to join the upper management group. I never made it! It was my choice. I found myself at once an agent of the executive suite and a protector, El Padron, thefather figure to the mill’s workers. Eventually, I had to make a choice between them.
My employer was Molinos Nacionales, C.A. MONACA was a subsidiary of Robin Flour Mills of Canada, that in turn was subsidiary of International Mutifoods, based in Minneapolis, Minnesota.
This is a very complex story, with many layers to it. I don’t think I have ever tried to tell it all in one piece. It has so many players with mixed motives. To begin at the beginning: Shortly after I became manager of the mill, I had occasion to fire one of my employees. He was a Guajiro Indian named Adolfo Pirela. Pirela was a small fellow, with short legs and arms so that his body seemed too large for his appendages. He had a puffy, oval face, slightly jowly and slack jawed, but his most noticeable feature was his opaque eyes; you could see nothing of the person behind them. When he spoke, he quacked like a duck, rapid and staccato, making him very difficult to understand. I inherited him as my traffic dispatcher.
As traffic clerk he contracted with independent truckers to haul our products to our customers. Traditionally, he also had the responsibility to sell our by-products, mostly to cattle ranchers, or dairy and chicken farmers, and resellers. Venezuela is a deficit market for all cereal products, which have to be imported. When I took over, I reviewed my operating statements and decided I could do better supervising the by-product marketing personally. The wheat bran and mill screenings amounted to about one-fourth of our total product and effective marketing could contribute significantly to the mill’s profitability. Because the market was seasonal, we had fewer buyers during the rainy season when livestock could graze. In the past the off-seasons by-product was discounted to feed manufacturers. I decided to cut out the feed manufacturers and store the by-product surplus in the rainy season under tarpaulins in the mill compound and work out a year-round quota basis with our customers rather than an apparent first come first served basis. I also increased the price.
As it turned out, the price was already higher than the list price the company received. During the dry season, (10 months when demand exceeded supply), Pirela was collecting personal kick-backs from buyers to assign them priority. When I changed the regime, it quickly became obvious what had been taking place, and I fired Pirela, replacing him with a promising young man in our accounting department.
Across the road from the mill was a small feed store. The owner was Pirela’s biggest customer. The man became furious when he was told he had a quota. He physically attacked my new traffic dispatcher and put him in the hospital for a few days. The warehouse foreman called me and we each took an arm of the assailant and threw him physically out into the street in front of the mill. It would have been pointless to call the police. About an hour later, the man returned to the mill with a pistol in his hand, marched into the warehouse, announcing that he was going to shoot the gringo! My warehouse foreman telephoned me and told me what was taking place.
The office, located at the back of the warehouse, had only one exit: directly into the warehouse. We had no firearms in the office and for some unknown reason our contract gate guards that day were conveniently unarmed. I told all of my staff to get on the floor in my enclosed office at the back and stood behind the door with a heavy tape dispenser in my hand, hoping to disable the man before he could cause any harm.
The angry man strutted around the warehouse shouting obscenities, but did not enter the office. I suspect, not knowing whether I was armed, he felt no need to enter the office. His pride restored, he left. Pirela had deep connections locally, and he bore the grudge much longer.
My responsibility was management of the mill and sale of the by-products. I also provided an office for the regional sales manager, whose task was the sale of flour and other finished products throughout Western Venezuela. When I first arrived the sales manager was Cesar Hernandez. Cesar had been sales manager in my previous posting in Cumaná, and had transferred to Maracaibo almost a year before I followed. A small, bright-eyed, hyperactive man of about my age, he had started with the company as an office boy and by dint of his intelligence and energy progressed into responsible positions. Cesar and I became good friends, but soon after I arrived, he left the company for greener pastures.
When he left, his assistant Carlos Faria replaced him. I had learned a lot about Faria from Cesar and Carlos Mora, my Peruvian predecessor in Maracaibo. Faria was the son of a senior Communist Party leader in Venezuela during the dictatorship of Pérez Jiménez. The Party paid for Faria’s university education. (I’ve wondered if he knew the infamous assassin, Carlos the Jackal, who came from a similar Venezuelan Communist Party background). Considering his origins, oddly he had been employed by the Seguridad Nacional, the infamous state secret police until Jiménez was overthrown in 1959. Then, even more oddly, he became a flour salesman. He must have known more about the mundane flour business than was evident on the surface.
Faria stood about six foot-two, very unusual for a Venezuelan. He was large bodied, stoop shouldered and somewhat obese. His face was arresting for its ugliness: round, florid and pockmarked from some severe childhood disease. He had a mean, furtive look to his eyes. Tension between sales and production management was a common phenomenon, but Faria exhibited an intense animosity for me. I learned that Pirela came to the company on Faria’s behest.
He reported to the flour milling division general sales manager, Hans Noetzlin, a transplanted Swiss who had been the regional sales manager in Maracaibo, before ascending to his current position. Hans had owned a flour-import distributorship tied to the Canadian subsidiary before the company built mills in Venezuela. The company bought out his business and made him regional sales manager. Faria had been hired by Hans. Hans remained deeply involved in the hidden arrangements that underlay the company’s commercial operations in the Western sales region.
Contraband activity was a way of life on the Colombian frontier with Venezuela. The Colombian Government policy with respect to wheat imports was one of supply restriction and high prices for flour. Flour prices were subsidized in Venezuela, about US$9.50 equivalent per cwt, while in Colombia prices were maintained at about US$18.00 to $20.00 per cwt. Venezuela imported the most expensive wheat from the US and Canada and flour quality was high. Colombia bought the cheapest wheat and flour quality was consistent with the wheat price. The circumstances made an ideal situation for flour contraband to Colombia. I estimated at the time that thirty percent of my mill’s production found its way across the border. It was a sure bet that Hans, Cesar Hernandez and Hans Noetzlin were up to their ears in it.
Flour contraband represented only a small part of border contraband activities. Lake Maracaibo offered a convenient setting for a wide range of smuggling operations. Police uncovered a large cache of firearms and whiskey stored in a Maracaibo waterfront restaurant run by Syrian emigrants. The Arabic food was very good. Cesar Hernandez introduced me to it.
About the same time the local authorities captured a truckload of marijuana near the oil camps on the west side of Lake Maracaibo. It was stuffed in flour sacks from my mill!. Knowing the character of local police, someone in authority likely did not receive his piece of the action.
Truckers would have to be deeply involved in any contraband operation. The truckers we contracted to haul flour and by-products were not employees of the company. They owned their vehicles and received separate contract documents for each shipment. They directly hired casual laborers who congregated in front of the mill to load the trucks.
A shyster lawyer specializing in labor law filed a suit against the company on behalf of the laborers that loaded the trucks, claiming that they should be considered as employees of the company. The implications were enormous, going back the fifteen years that the mill had existed, claims would include wages, very generous Venezuelan severance benefits and other allowances. If such an arrangement were accommodated by the company, it was a short step to bringing the truckers under direct corporate control as well. It would fall to me to establish a far more rigorous supervision of the truckers and their laborers. That would not be a desirable situation for Faria and those involved in the contraband traffic.
The lawyer’s normal tactic in such situations would be to leave the suit pending until the last minute without informing the unsuspecting defendant, and then serve the company with a claim that had to be negotiated in a short time span. The anticipated result would be a pay-off to the lawyer to drop the suit. The suit remained open for almost eighteen months and would become void unless the company was served (in my person) with the subpoena. The shyster came to the mill to serve the papers. Forewarned at the last minute by our lawyers, I was instructed to avoid the subpoena for another ten days. The lawyer was informed that I was absent. That night I left my car at the mill and another employee took me to a local hotel.
The next day I set up shop in our customs broker’s office on the waterfront and I ran the mill by telephone. The second day the shyster approached our apartment, and asked our maid if I was there. Bernarda tried to shoo him away and he threatened her. Bad move! She menaced him right back, and he beat a hasty retreat, but he hung around watching our apartment. The company decided that I had to leave Maracaibo until the lawsuit had lapsed and sent the corporate airplane to pick me up at the Maracaibo airport, but first I had to get there. The shyster and a crony followed my wife when she brought a suitcase of clothes to me at the customs brokers’ office. They split up, one following my wife after she left the suitcase and the other waiting in front of the brokers’ office. My broker arranged a car to pick me up in back of his office to take me to the airport. He actually had a hidden passageway behind a swinging bookcase in his office! They were Lebanese. I suppose that explains it!
I remained absent until the suit lapsed and then returned. The shyster came to me and threatened to reintroduce the lawsuit if we didn’t accommodate him. Our attorneys advised me to stone-wall him. A threat to the smugglers operations, the lawyer’s persistence may have cost him his life. He was mysteriously murdered about six weeks later!
At about this time it fell upon me to renegotiate our labor union contract. In fact it became a major matter, because all three of the company’s mills were negotiating at the same time. Top management feared that all three mills might go on strike simultaneously. Each mill had a separate union. My strategy with my union began six weeks before negotiations were to start. I took the union officers to lunch every Saturday. We talked about everything from sex to baseball . . . and about their aspirations and the company situation. It was all informal. It was a rare situation that could not be replicated where unions have consolidated their strength, such as in the US.
When negotiation time came, I knew what they wanted and they knew what I wanted. I reached agreement with my bosses about what I would offer to the union. The union came into the meeting with their proposal. I broke the rules and suggested that we exchange written proposals and I would present my proposal first. Customarily the union presents their demands and I would respond. The reversal caught them off-balance, but it turned out that their proposal and mine were so close, we agreed on a contract that was one tenth of one percent above the opening offer that I had negotiated with my bosses!
Essential to their proposal was that they wanted the company to provide them with a credit union, similar to one that was already functioning at the other two mills. This was not a matter we wanted to renegotiate modifications every three years when the labor contract expired. The union and I agreed to remove it from the labor contract and negotiate a separate agreement within two months. Concurrent with that I wanted to restructure the minimum or base-wage scale by position in the plant. In the years since the mill had been established the company had automated and as a matter of fairness and practicality, the wage scale needed to be adjusted. We also needed to be able to attract competent workers in a very competitive labor market. We would carry out a local wage survey and negotiate that in the same time frame. These commitments had been accepted by top management in advance.
I completed the contract negotiation in a single day, had it typed and signed the second day, presented and approved by the Labor Ministry on the third day! Negotiations at the other two mills lasted for over a year, with slow-downs and three strikes!
This was 1973 and world food commodity prices went wild: wheat, maize, soybeans, rice and fish meal. The company was losing money. A subsidized industry, we sold flour at a price fixed by the government, the cost of wheat exceeded our ability to sell finished products at a profit and the Venezuela government stood adamant against any upward price adjustment.
When the time came to negotiate the credit union and wage scale adjustment the company reneged on my commitment to the union. They took the negotiation out of my hands and gave it to a newly formed human resources department in Caracas and then didn’t inform me of their decision. Finally, I called the company’s labor attorney in Caracas and arranged a meeting, afterward calling the flour milling division vice president, the general production manager and the new human resources manager and told them I had scheduled the meeting.
For more information about Lake Chapala visit: www.chapala.com