Strom Engineering Corporation’s Stealth Labor

Strom Engineering Corporation’s Stealth Labor

Impressions of its temporary work force in Grand Forks—and an exclusive interview with its CEO—shed light on the ultra-private, increasingly popular Strom Engineering Corporation.

Every weekday for nearly two years, a caravan of white passenger vans with tinted windows cruised up desolate Interstate 29 in northeastern North Dakota, swiftly transporting temporary replacement workers to a factory in Drayton that once employed nearly a third of the town. At shift’s end, the procession headed back to Grand Forks, 50 minutes away.

In August 2011, the city became home base for most of the 1,300 temporary workers dispatched from Strom Engineering to fill jobs in four American Crystal Sugar Company factories less than an hour away, including East Grand Forks and Crookston, and Hillsboro, North Dakota. The white vans were everywhere in the mornings, a few stopping by the Starbucks at 13th and Washington around 6 a.m. before heading to the plants. Between 6 and 7 p.m. they returned Strom workers to their temporary homes at the AmericInn, Travel Lodge, GuestHouse Inn, Settle Inn, and Ideal Inn & Suites.

“Most of the time they come back, have something in their room for dinner, and stay in,” according to GuestHouse Inn General Manager Annette Aird. But a few, especially toward the weekend, liked to hang out at the hotel’s Muddy Rivers Bar and Grill. “They’d stay to themselves,” says a bartender, adding that it was probably because they were mostly black and younger.

0513_stealth_p1-(1).jpgMore Money in Pocket
Some temporary workers at Crystal Sugar opted to live through the winter in trailers at a campground in Hillsboro, North Dakota, allowing them to collect per diems that otherwise would have gone for hotel accommodations.

The Strom workers—of whom only about 200 remain today, after Crystal Sugar found and trained temporary local employees—have been mostly of different racial and ethnic backgrounds than longtime residents, and from faraway states. And they have been perceived by some in this nearly all-white “from-here” community as a wave of foreigners stealing the best-paying jobs from residents locked out by Crystal Sugar. The most polite word they apply to them is “scab.” Stories circulated of their bad behavior toward the locals.

“They used to come in here and wave their money in front of people, and fights would start. It got so bad we banned them and don’t let them come in here anymore,” says a bouncer at Borrowed Bucks Roadhouse, a bar with sports-themed décor complete with buckets of beer, along with a self-proclaimed “baddest, most kick-ass sound system in the Upper Midwest” for dancing, and a DJ asking women turning 21 to crawl over other women on the dance floor to get a free Monday Birthday Night drink. “U.S. marshals came to the Hillsboro plant and let the supervisor know they had a warrant for one of them. As soon as he came in, they picked him up. He was wanted for murder,” says Melinda Martin, who lives in Clifford, North Dakota, 22 miles west of Hillsboro. “They’ll hire anything as long as they don’t have to give in to the people who had been there and know the machines and know how to keep them running well and clean.”

Others tell tales of fights, frequent domestic dispute calls to hotels, drug dealing, and more.

0513_stealth_p2.jpgBorrowed Bucks Roadhouse in Grand Forks, North Dakota

Another Side of the Story

There are few, if any, facts, to back up such stories, however. U.S. marshals never visited the Hillsboro facility. “Anecdotally we have had calls of service that involved people from Strom Engineering,” says Lieutenant Jim Remer of the Grand Forks Police Department. “But we also had calls regarding Crystal Sugar employees before the lockout.” The number of such incidents didn’t increase with the inflow of temporary workers, he says.

And while rumors abound about Strom workers using cash for criminal activity such as prostitution, the police found no evidence to support such claims. “We have the types of crime we had before the lockout began,” Remer says. “We have an ebb and flow to our crime rate all the time, and it’s not due to any one group or issue.”

East Grand Forks police say the same thing. “If you compare apples to apples, American Crystal Sugar workers compared [to] Strom, there’s no increase in calls,” says East Grand Forks Police Sergeant Scott Jordheim. “There’s nothing out of the ordinary.” If anything, adds Lieutenant Rod Hajiek, “when the lockout first happened, we were getting a lot of complaints regarding the guys who were locked out.”

0513_stealth_p3.jpgA Fading Union
A little more than a year ago, picketers stood outside each of Crystal Sugar’s four beet-processing facilities near Grand Forks. Today, the only trace is a sign still hanging on the chain-link fence outside the Crookston plant.
At press time, the union representing Crystal Sugar’s 1,300 locked-out workers had decided to vote again April 13 on the company’s existing contract offer. But only a small fraction of its membership remains able and willing to vote. Approximately 600 union members officially resigned or retired, according to management. More than 130 have returned to work, and an unknown number have moved or found jobs elsewhere.
Those remaining must stay current with dues to vote; here, too, numbers are dwindling. In East Grand Forks, for example, a union member reports that 200 of 300 members were in good standing as of June 2012. That number dropped to 62 as of December 1, and to 28 by March. Union leadership would not comment on these totals.

Based on several interviews, it appears Strom’s employees work their shifts and keep a fairly low profile, doing things like picking up groceries at Hugo’s, washing clothes at the Busy Bubble Laundromat, and sometimes finding a blackjack game at Rumors Lounge.

Jenna, a blackjack dealer who would only give her first name, says she got to know a couple of the Strom workers. One eventually brought his wife and children up from Louisiana; they now live in the Century Apartments in East Grand Forks. “From living in projects before, they’re now in a good community and his kids are going to a good school,” she says. Another, she says, was a graduate student who couldn’t find a job in her home state of Florida.

Crystal Sugar confirms that a handful of Strom employees applied for full-time jobs and stayed in Grand Forks. And overall, the company couldn’t be happier with how Strom’s temporary workforce performed. “They do a really good job. One indication of that is our ability to get the second-highest beet payment on record last year,” says Brian Ingulsrud, the company’s vice president of administration.“We would not have been able to do that without a lot of really good work from Strom workers.” They not only came on board with valuable skills developed in previous work environments, he adds, “they were used to coming into new situations and learning things quickly.”

Behind all of this is the 24-employee Strom Engineering Corporation, which offices relatively obscurely on one of the three floors in a small building in Hopkins. It began 52 years ago as a contract staffing and consulting company focusing primarily on engineering; helping management with labor vacuums such as Crystal Sugar’s happened by accident.

“We were working with a client taking an antiquated plant and bringing in all-new computerized equipment and had about 100 people working on the project when the client was hit with a strike,” says CEO John Radick. “The only people who knew how to run their machines were ours. We checked with our insurance broker, and we agreed to have them fill in while the strike continued. It worked out extremely well, and it became our eureka moment.”

That was roughly 22 years ago. Since then, Radick has transformed Strom into one of the nation’s best-regarded firms for labor-dispute contingency planning, and temporary workforce placement and management. Along the way, he gradually bought into the company; today he owns it along with founder Donald Strom. The original focus continues with Strom Minnesota, while Strom Engineering has taken on the labor-related side of the business.


“The notion of bringing in temporary workers during a strike is not new; it dates back to the ’50s,” says Radick. “What’s different is that we bring in well-trained, specific-need workforces and very quickly come up to speed, and in some instances, exceed what locked-out workers have done.”

It takes a considerable amount of research and time to find, screen, and stay connected to quality talent that can be dispersed quickly, Radick adds.

Before computer-aided manufacturing became prevalent in U.S. factories during the 1990s, it was fairly easy to find workers who could fill vacant factory jobs, Radick says, because skills were more general and transferable. With computerization came specialization tailored to specific industries and then to specific companies—the very niche Strom had already established a reputation for serving.

The confluence of technology in the workplace and increasing mobility of workers helps create a pool of potential temporary workers for Strom. Over the years, it has developed a database of more than half a million workers and spends considerable resources to keep it as current as possible. Strom also actively recruits as needed to keep pace: Headcount cycles up and down—between 5,000 and 10,000 temporary workers at any given time—based on demand. Those who are dispatched to various job sites receive free housing and transportation, and a per diem to cover food and miscellaneous expenses, in addition to their paychecks.

While helping corporations continue operating through labor issues, Strom also helps thousands of people find jobs where they know they’ll be valued by their employer. Radick says two groups of workers are best suited to Strom today: Those in their late 20s “with good experience but they’re low man on the totem pole in terms of job security or seniority, or a victim of the economy,” he says. The other group is people in their late 50s and early 60s. “There are a lot of early retirees out there who don’t want to be retired. With these jobs, they get to go out and be a valuable, seasoned veteran of a manufacturing operation. It’s rewarding, pays well, and they get a lot of respect in interesting jobs.”

There are also the laid-off. “Here’s the mindset of one of our typical workers: You’re 48 years old, laid off, have a good set of skills, and find out we have this job where you can work 17 weeks for 72 hours a week. While you do, your food and lodging is taken care of, so if you manage your money well, when you’re done you can go home and do basically whatever you want. Five or six weeks later, another project comes up; it changes your lifestyle.”

Strom will not disclose how much it pays such employees. But if someone worked two projects a year under the terms above for $25 an hour (a conservative estimate based on average Crystal Sugar wages and reports from union officials), he or she would make close to $31,000 working roughly four months. Two such tours of duty per year generate $62,000 (while saving on living expenses) and leave a worker with four months of free time.

“Typically, our people work a lot of overtime,” Radick says. “They do that, eat, take care of their laundry and other things, and don’t really have a great amount of free time” while working their temporary assignments.

Most of Strom’s time and energy is actually spent trying to help avoid the use of such temporary workers—setting it up as a contingency as part of a larger overall labor strategy plan for a client. Last year, for example, it worked with more than 75 companies that needed contingency plans in case labor negotiations failed; only 12 led to deployment of temporary workers, Radick says. Since 1991, Strom has helped more than 1,000 companies through such situations and has typically deployed temporary workers about 15 percent of the time.

“Part of what we counsel them on is post-dispute resolution—the union is coming back,” he adds. “You need to put a plan in place that includes healing.”

Meanwhile, Strom also does what it can to stay out of the spotlight (this is the first time Radick has spoken with the media). “We’re used as an effective part of a contingency plan,” he says, “but we are the most visible part of what stings, so we keep as quiet a profile as we can.”

(See Dale Kurschner's May 2013 Editor's Note for more on the Crystal Sugar lockout.)