Fate of Cedar Rapids Cargill plant weighs on employees, decision-makers

City Council set to take final vote on new rail yard neighbors oppose

 

CEDAR RAPIDS — They call him “Lucky Larry.”

The threat of some problem with a rail car disrupting a shipment — either because of a mechanical issue or simply because one is not available — is forever looming, but Larry Atkins has always prevailed.

“I don’t want to be the one who has to say, ‘I didn’t get the rail car loaded yesterday,’” said Atkins, 57, who loads wet feed for transport. If he doesn’t get his job done, a ripple of delays can occur down the supply chain. “It’s definitely made me sweat, but I haven’t buckled under yet,” he said.

Cargill has applied to build a rail yard 1.75 miles south of its wet corn milling plant at 1710 16th St. SE in Cedar Rapids, saying space to store and manage rail cars is critical to remain competitive and protect jobs at a time when costs for rail services are increasing and the supply of cars is unpredictable.

 

The $6.5 million, 12-track, 200-car rail yard would go on a 28-acre vacant plot of city-owned land south of Stewart Road SE in the Rompot neighborhood, spurring vocal resistance from neighbors who feel the industrial use would hurt their quality of life. While they say they empathize, they also say Cargill’s marketplace concerns should not be their burden to

The Cedar Rapids City Council has voted twice in favor of the needed rezoning with a final vote scheduled for 4 p.m., Tuesday at City Hall, 101 First St. SE. Each vote has been met with streams of public testimony with the majority coming from opponents, although supporters have spoken as well.

Tennessee layoffs resonate locally

The stakes are all too clear for Atkins, a 23-year employee who has been at the Cedar Rapids plant since 2015.

Not only does he feel the strain of unpredictable rail cars in his daily work, he had spent most of his career at the corn milling plant in Memphis, Tenn., until it closed in 2015, laying off 440 people. He praised Cargill for hiring him in Cedar Rapids and standing by him as he dealt with health concerns.

In Memphis, Cargill had been working with local officials on a circular rail track to relieve congestion, company officials said. The same track was used to get in and out of the plant, creating backups. Plans for the new rail fell through, and Atkins called it “a very major reason the plant closed.”

 

In Cedar Rapids, the battle for a rail yard has dragged on for two years. Workers say impacts on their work and job stability — alongside neighborhood concerns — deserve consideration, too.

Summer Thompson, 44, who has spent 14 of her 19 years at Cargill in rail logistics, recalls the frustration of getting the right rail car for delivery. The new rail yard would relieve considerable pressure.

“We’d be able to move rail cars around when we need to,” she said. “I just envision the flexibility of being able to run our plant a little more smoothly and a little more efficiently.”

The fear of shutdowns because shipping is stalled is felt across the plant.

Oscar Rodriguez, 50, who works in starch packaging, said, “If we don’t have enough rail cars to put starch in, you have to stop.”

The Hawkeye Area Labor Council AFL-CIO recently voted in support of Cargill workers and the rail yard.

Thousands of bushels of corn per day

Cargill has had the wet corn milling plant in Cedar Rapids since 1967 and grown its footprint to 255,011 square feet on 31 acres, supporting 200 employees, 80 contractors and exceeding $17 million in wages, salaries and benefits. The company estimates direct economic impact to the local economy of $150 million annually through salaries, spending with farmers, contractors, taxes, utility payments and more.

The plant goes through thousands of bushels of corn per day — equaling 30 to 35 rail car loads or 140 truck loads per day — through a wet process in which the kernel is broken down to its core components of germ seed, hull, carbohydrate and starch and then refined into products such as corn syrup, cornstarch, corn meal and animal feed. Customers use the starches, sweeteners and texturizers to make pudding, gravy, baby food, corrugated cardboard and paper among other products.

 

The plant can hold only three days worth of corn in the 20 silos on site, underscoring the importance of rail car availability, said Kirk Perreau, food safety quality and regulation manager. The site is tight, so there is no room to store backup rail cars with semis coming and going, he said. Plus, many products require specific rail cars for transportation, adding to the logistical challenge.

Cargill has been considering building its own rail yard for more than 10 years to better control its shipping as prices set by Union Pacific rose and continue to rise. Within the past year, the matter has become more dire as Union Pacific has limited rail car storage in its rail yard on C Avenue NE near Cedar Lake.

Union Pacific has issued a statement supporting Cargill’s efforts for its own rail yard.

Who would walk from a $400M investment?

The plant was inundated in the 2008 flood, causing enough damage that insurance adjusters anticipated a year closure. Instead, the plant reopened in 100 days. Cargill invested $150 million recovering from the flood and has $400 million overall in the wet corn milling plant, according to company officials.

Opponents of the rail yard have cited the investment as evidence the rail yard is not critical to Cargill’s commitment to Cedar Rapids.

A different perspective emerges from employees like Atkins, or from Mike Wagner, managing director of starch, sweeteners and texturizes for Cargill North America. He spoke at a hearing last month before the council.

Wagner called a Cargill-owned rail yard “critical to the economic viability” of the Cedar Rapids plant. Access to reliable economic rail is imperative to maintaining current operations here, he said, and is key in how the company evaluates future investment.

“The economic environment around us has continued to shift, and time is no longer on our side,” he said. “If we are not able to make these needed investments to remain competitive, we will be put in a position to determine what is the longevity and future of this location.”

The notion of losing such an economic engine and major employer has weighed on the minds of city decision-makers.

Cedar Rapids Mayor Brad Hart pointed to numerous concessions Cargill has made to mitigate concerns of neighbors, such as limiting the hours of operation and light pollution, replacing lost pollinator habitat and building an aesthetic buffer for noise and light.

He said he listens to the concerns of neighbors, but studies provided by Cargill counter many of them.

The city’s agreement with Cargill would have “teeth” to hold the company accountable, but Hart said he has confidence the company would follow through regardless after hearing testimony of how it has been as a corporate partner and how it treats its employees.

“Some people don’t believe Cargill would leave, but there is always that risk,” Hart said. “They could move to another plant.”

Ron Corbett, the former Cedar Rapids mayor and current business retention and expansion strategist at the Cedar Rapids Metro Economic Alliance, has advocated for the rail yard.

He called manufacturing the “bedrock” of Cedar Rapids and one the city should fight to protect.

 

The Economic Alliance provided data from the U.S. Bureau of Economic Analysis showing manufacturing is responsible for 13 percent of jobs in Cedar Rapids and 25 percent of income — more than Des Moines or Davenport — and has the lowest job turnover rate at 3.6 percent.

Still, manufacturing is not immune to economic pressures. He pointed to the closure of Iowa Iron and Steel, Link-Belt Speeder and Iowa Manufacturing over the years.

“Just because you’ve been around for 100 years doesn’t mean you will be around for another 100 years,” he said. “You are always at risk. To have an existing facility that is providing not just jobs but supporting an entire secondary market; you don’t want to risk losing that.”

Comments: (319) 398-8310; brian.morelli@thegazette.com