A quintessential company man in a company town, Richard Knowlton led Hormel Foods through a turbulent period of the 1980s that included a bitter, historic 10-month strike as the company sought to lower wages to stay competitive.
Knowlton, who grew up in Hormel’s hometown of Austin, Minn., took his first job in its meatpacking plant there at age 16 before rising to reshape both the company and town. As chief executive, his strategies ultimately made Hormel the only old-line meatpacker to survive that transformative era.
He died Friday in Vail, Colo., from complications of Alzheimer’s disease. He was 86.
Knowlton followed his father into work at Hormel. But after college, he moved into the company’s sales side and later grappled two forces that threatened to snuff out the company: the changing eating habits of consumers and the emergence of low-cost, nonunionized competitors.
“Dick was a catalyst for change,” said Jeffrey Ettinger, chairman of the Hormel Foundation and chief executive of Hormel Foods from 2006 to 2016. “He had this deeply rooted knowledge of the company. He knew most of the people at the plant. But he also was a visionary and could see consumers were changing.”
After graduating from Austin High School, Knowlton attended the University of Colorado, where he was a standout football player and majored in geography and economics. After college, he joined Hormel’s Fremont, Neb., plant as merchandising manager while completing two years as a U.S. Air Force intelligence officer. He later transferred to Austin as manager of the Minnesota route car division.
He worked a number of management jobs at the Austin plant, including general manager, before making the leap across the highway to a corporate job as vice president of operations of what was then called Geo. A. Hormel & Co. In 1979, he was named president and chief operating officer, then promoted to chief executive and chairman of the board in 1981.
The company’s profits at the time were shaped by volatile swings in commodity prices, particularly for pork. Over the next decade, Knowlton steered Hormel into making value-added processed products for every corner of the grocery store, not just the meat and deli departments. He pushed the company toward convenience-oriented foods and healthier proteins, leading to the acquisition of Jennie-O Turkey, one of the company’s largest businesses today.
Over the decade, Hormel’s product mix flipped from being dominated by low-margin fresh meats to being led by more profitable value-added products. And the company’s market capitalization increased from $150 million to about $2 billion.
Those gains also had a price: the loss of jobs at plants in Austin and elsewhere by hundreds of workers, some who Knowlton had known for years.
As competitors of the day such as Armour and Morrell sold plants around the Midwest to other firms that abandoned union contracts and workforces, Knowlton in the early 1980s believed that Hormel would have to lower its labor expenses or lose the ability to sell its products competitively to supermarkets.
The company, unlike most firms, has an ownership structure in which the Hormel Foundation, set up by the founding family, owns a near-controlling stake and has pledged never to sell the firm. That structure has kept Hormel independent and based in Austin, where it opened a new flagship plant in 1982, but it has also forced Hormel executives to confront industry trends and forces unaided.
In 1985, Hormel proposed a 23 percent wage cut — from $10.69 to $8.25 an hour — for Austin workers, seeking to remain competitive in the struggling industry. Leaders at the Local 9 of United Food and Commercial Workers (UFCW), which represented the workers, resisted, given the company’s profitability. On Aug. 17, nearly 1,500 workers walked off the job and the plant stayed shut for four months as the negotiating positions hardened.
The picket line turned hostile in mid-January 1986 when Hormel reopened the plant with strikebreakers and replacement workers. Knowlton asked the state government for help and then-Gov. Rudy Perpich, a Democrat, ordered 600 National Guardsmen to Austin to protect workers going in and out of the plant. A day after the plant reopened, more than 2,000 people applied for jobs at $8 an hour.
“It was a major turning point in the history of the company, in the history of Austin, and in the history of meatpacking as an industry in the United States,” said Peter Rachleff, a labor historian, formerly at Macalester College, and author of “Hard-Pressed in the Heartland: The Hormel Strike and the Future of the Labor Movement.”
At the company’s annual meeting that January, a longtime employee told Knowlton he didn’t think the CEO could relate to the sacrifices workers were being asked to make. “Well, I’m sorry you feel that way, but I do and I can and you will not change that,” Knowlton replied, according to a book about the strike by Star Tribune reporters Dave Hage and Paul Klauda, “No Retreat, No Surrender: Labor’s War at Hormel.”
Knowlton, who lived in a “modest, aging house” with a rusted basketball hoop, described the lower wages that were being paid at other meatpacking plants in Albert Lea and Worthington, Minn., and nearby Mason City, Iowa, and said Hormel would not be able to compete unless its wages got closer to those levels. “This is not a union-busting company,” he added, a remark that drew “hearty applause,” according to the book.
The strike ended in June and, over time, the company rehired several hundred of the workers who walked out. Hundreds more never returned. Eventually, Hormel sold off the meatpacking portion of the business to another firm, Quality Pork Processors. Bitterness about the strike and resulting transformation linger today in Austin.
“He felt he had an obligation and he did what he felt he needed to do for the viability of the company, but there are definitely still effects from it — a lot of folks who strongly aligned with one side or the other,” Ettinger said.
In 1995, Knowlton told the Star Tribune the strike was the most difficult experience of his career “because it was my hometown.”
After retiring as chief executive in 1993, Knowlton became chairman of the Hormel Foundation, where he pushed for the expansion of the Hormel Institute, an independent cancer research facility that has recruited top scientists from around the world to Austin. He also spearheaded a major renovation of Austin High School.
Knowlton is survived by his wife, Nancy; five children; two brothers; and numerous grandchildren. Services will be Feb. 16 in Colorado.