Our company’s [been in] Time Check for sixty years. And I’m an unusual man; I wear my emotions on my sleeve, which is not always good, but it’s painful to come down here every day and still see these homes and know these are families. These are families with husbands and wives and kids that don’t have the resources to help get back on their feet.
—JOHN BLOOMHALL, DIAMOND V PRESIDENT AND CEO1
Cedar Rapids has always been a city of odors. As a kid I remember the cereal smells coming from the Quaker Oats plant along the river and the dead-animal stench from the Wilson Packing Plant (no longer operating). But there was a third odor, one that Grandpa carried in the fibers of his overalls and one I associated with those trips to the bus garage in Time Check with Grandma to deliver his lunch pail. It was yeasty, beery even, similar to a sourdough starter on its eighth day of fermenting. (Beer and Grandpa were not strangers.) Today, underneath the sewer stink of post flood Time Check, the yeasty odor is as strong as ever. From a distance it’s not an entirely unpleasant smell, and for me it not only triggered olfactory memories of my summer visits but was also a reminder of one of the most amazing comebacks of the 2008 flood: the Diamond V recovery story.
I had first heard about the Diamond V manufacturing plant from Cedar Rapids’ Mayor Kay Halloran, who boasted that the business was “my flood recovery poster boy. None of his employees, not a single one, went without a paycheck. And eight and half days later they were back in production.”2 The sixty-five-year-old, family-owned operation was the first major manufacturing plant to reopen in Cedar Rapids.
Diamond V “provides yeast culture fermentation products and high-selenium yeast to animal feed companies, dairy milk producers, beef cattle feedlots and integrated swine and poultry operations world-wide”3 and is located in the heart of Time Check. You can see the Cedar River from its corporate headquarters on First Street NW. It is the largest business concern in Time Check, with 90 employees in Cedar Rapids, 125 in the United States, and 180 worldwide. There are four facilities in the city: the corporate headquarters and manufacturing plant in Time Check; a technical center on the Kirkwood Community College campus; and a second, newer $25 million, 64,000-square-foot plant that went online with a ribbon-cutting ceremony on September 15, 2009. It sits on seventy-seven acres far from the river on 60th Avenue SW.4
I officially met Diamond V’s President and CEO John Bloomhall on a sweltering August day in 2009 at his office in Time Check. He wore pressed khakis and a red polo shirt with the Diamond V emblem. On the wall was a University of Iowa football schedule and a Hanjin Shipping calendar. There was a photo of his manufacturing team tacked to a bulletin board. Over his shoulder I could see geese in flight and the Quaker Oats plant across the river. The mustached Bloomhall was lanky, open, and animated (his hands follow his words) and not afraid to show his emotions, a refreshing quality you rarely encounter in a CEO. Two months earlier I had listened as he presented remarks at the one-year commemoration at Sunner Park. The catch in his throat had captured the bittersweet nature of the occasion. Not long after we began our interview, he explained, “Our company’s [been in] Time Check for sixty years. And I’m an unusual man; I wear my emotions on my sleeve, which is not always good, but it’s painful to come down here every day and still see these homes and know these are families. These are families with husbands and wives and kids that don’t have the resources to help get back on their feet . . . ”5
He went on to say that he had worked in Time Check for twenty years and was used to looking out his office window and seeing children riding bikes and couples walking down First Street during the day. But now it was deserted.
“What’s really eerie is to come down here at night. It’s better now because the police turned the streetlights on, but even last October, when we were coming down here at night, it was pitch black. [There were] no lights on anywhere except for our plant. It was really strange.”
John Bloomhall is the second third-generation family member to run Diamond V. He was quick to point out that the company is not necessarily an automatic employment agency for family. It was always understood that if you wanted to work in the company, you had to first get a college degree and then work somewhere else to develop skills that would be useful to the family business.
John attended the University of Wyoming and then worked for IBM for a dozen years. His brother retired in 1998, and John took over the following year, when Diamond V had just forty-four employees and only 3 percent of its business was international. (Today its products are marketed in more than forty countries.) The company was being run in an old-fashioned manner without business plans. John took what he learned at IBM and started implementing the business systems and processes necessary to compete in a modern environment: job descriptions, employee evaluation systems, merit pay systems. John wrote new business plans and made people’s jobs accountable.
“Diamond V was a wonderful company. Employees loved working here. They knew the owners—we were visible, accessible; we were involved in there everyday—and loved the environment that was created here. So [we transitioned the company]. We decided to take Diamond V from this family owned and managed business to a professionally managed business that’s family owned.”
The company was started in 1943 by John’s grandfather. Growing up as a child in the Dakotas, the elder Bloomhall observed that farmers would save their [waste] milk and food scraps in their home, let it all ferment, then feed it to the hogs. He observed that the animals did better when they had a fermented product in their feed.
Instead of trucking waste to a plant, Diamond V Mills makes its own yeast culture products. John said the proprietary process is “very big and complex . . . and is virtually impossible to be reverse-engineered.”
At 11:00 a.m. on June 11, two days before the Cedar River crested, John and his employees were told to evacuate the corporate office and the manufacturing plant by 6:00 p.m. It would be seven long days before they were able to get back in and assess the damage. Those seven days were the longest and most depressing of John’s life. Yet he had teams of employees drafting recovery plans and ordering parts that he knew would need to be replaced. On June 13, the day of the crest, he commissioned a flyover of the plant and photographed it so that the teams had some idea of just how much of it was underwater. The same day, temporary office space was rented elsewhere in Cedar Rapids. Yet every time John turned on the television, he saw heartbreaking images of his inundated city.
“I sat there and thought, ‘Will this company come back?’ I had very serious questions as to whether this was the end of Diamond V Mills. I didn’t know. Quite truthfully, my gut was telling me, ‘I think we’ll probably come back.’ But I was thinking it would be two to three months, maybe even longer, to rebuild our plant. We just had no idea how much damage we had in our facility and [exactly] what was damaged. We really didn’t.”
When the historic Midwest flood of 1993 hit fifteen years earlier, the Diamond V plant kept running. But the crest on the Cedar River in 1993 was eleven feet lower than the 2008 crest. Basements flooded in 1993, but that was not an unusual occurrence in the Time Check neighborhood. John hoped for the same result.
“We kept our plant running during the 1993 flood. We’re used to dealing with floods in Time Check. Our basement floods, but we just pump it out into the storm sewers.
“This time we had all our flood procedures in place. We were planning to continue, to keep on running. So when they said ‘You guys got to evacuate’ and the flood was going to go to twenty-five feet, we went ‘Uh-oh. This is something new.’ We checked elevations and looked at the plant, and we were still thinking we might be OK. So we kept our flood watch team there, but then [it blew] right past twenty-five feet.”
The corporate headquarters was closer to the river than the manufacturing plant, and water quickly rose nine feet to the ceiling tiles of the headquarters building. The first floor was a total loss. Water reached between three and four feet inside the manufacturing plant, frying all the motor control panels. Diamond V had flood insurance, but it was not enough to cover the damages.
The Diamond V manufacturing plant and headquarters were two of the 1,049 commercial and 84 industrial parcels damaged in the 2008 flood. A year later, 459 businesses had reopened in the city.6
The chamber of commerce’s President Shannon Meyer told me in February 2009 that more than 700 businesses in downtown Cedar Rapids alone were impacted by the flood and some 8,000 people dislocated from their jobs. Another impact on business had been the rise in the cost of energy. An antiquated steam power plant was destroyed during the flood and replaced with natural gas generators. As luck would have it, the city’s eight largest businesses in downtown Cedar Rapids, as well as 200 smaller businesses, relied on steam energy. As a result, downtown businesses saw their energy costs rise by a factor of five. The chamber of commerce saw its December bill rise from $900 in 2007 to $5,900 in 2008. Meyer said that hindered an already difficult recovery.
“Not only do we have the challenge of the flood and the typical economic loss that goes with that—businesses not being open, the construction costs of getting back up and running—but you also have unforeseen costs.”7
Sara Mentzer, vice president of public affairs for the chamber of commerce, added, “Steam [energy] is not regulated. The cost of repairing that plant cannot be shared across all Alliant Energy users. It has to be just the users from that steam system. It really makes it a smaller group that has to deal with [the repair costs], but it’s so impactful because it’s the core of downtown and the size of the companies affected.”8
That February Shannon Meyer cited positive signs of recovery. Meyer’s office is the local administrator of Jumpstart, a program that helps businesses get back on their feet with cash grants. The program is funded by the State of Iowa and the U.S. Department of Housing and Urban Development. The funds are part of a $40 million pool for both businesses and individuals affected by all natural disasters that occurred in 2008. The monies are distributed at the local level by the Cedar Rapids Area Chamber of Commerce. As of February 2009, Jumpstart had awarded more than $12 million to 502 businesses.
Meyer said that when the owners come in for their checks, they often have tears in their eyes. “There are small businesses coming back every day. That’s the Iowa mentality. People here are absolutely resilient. They will not fail. They want their businesses to come back and to come back better than ever. We’ve got commitments from our large industries here. They are not going anywhere. They love the Cedar Rapids area.
“And we’ve got large [local] corporations such as Rockwell Collins and AEGON that weren’t flooded but have really stepped up and contributed significant amounts of dollars and professional experience.” Volunteer hours from Rockwell Collins and AEGON total in the tens of thousands.
Meyer said the nation cannot afford for Cedar Rapids to become economically depressed like so many other Heartland cities. “The nation needs Cedar Rapids to succeed. People don’t realize the amount of industry and the grain processing and what that means to their everyday life. What’s going to happen to your oatmeal in the morning? We say that jokingly, but not really. It’s significant.”
When I met with Christian Fong in February 2009, he had just been appointed chair of the chamber’s Small Business Task Force. His usual infectious optimism was waning.
“The most difficult point in the recovery from the business side is actually going on right now. It started right after Christmas, because all these businesses hoped a strong Christmas season could keep them afloat. Banks were willing to extend credit through Christmas. Beginning a week or two after the new year, we began to see businesses that were holding on after 2008 close on a daily basis.
“We estimated that we’ve lost about 1,250 jobs since the flood. And at the pace we’re going, we anticipate we’ll lose another 1,800. These are [job losses] that we think we can attribute just to the flood.”
“So the 1,250 figure you’re giving me is pure flood job loss?” I asked.
“Yes, flood job loss. It’s hard to break out. Does business not recover and their line of credit contract because of the flood damage or the flood recovery wasn’t going well? Or was it because banks were reducing credit lines everywhere? You’re never going to be able to strip those things out.”9
Christian did note, however, that downtown had started to revive and that he had trouble finding a parking place during a recent lunch hour.
Mayor Halloran told me later that those cars and trucks that Christian was competing with for parking were probably “construction recovery vehicles. Those are the carpenters, plumbers, and electricians and all the people who have been hired to help get the commercial space operational again.”10
A month and a half before the one-year anniversary of the flood, the Small Business Task Force released the following numbers, based on predictions from the U.S. Department of Labor:
357 businesses will fail by [the] 3-year anniversary of the Flood due to added debt load.
6,500 or more jobs will be lost.
$130 million or more in annual wages will be lost.
The report also stated that 77 percent of Cedar Rapids’
flooded businesses had self-reported that they were open, but with these caveats:
Many are shells, not back in viable locations and most with cash problems.
The average business had $370,000 in physical “hard cost” losses.
The loss of over 60 businesses had already cost CR about 1,200 jobs.
Progress has stalled in the last 2 months, as pace of business closure is accelerating.
The report then lamented that the $20 million Cedar Rapids had received from the state’s Jumpstart program and local grants and forgivable loans “pales in comparison to $131 million in new debt.”11
Even with such dire economic figures, business leaders such as the chamber’s Shannon Meyer still believed in the city’s future.
“I think [it’s] very easy to paint that grim picture, especially in these tough economic times, but anyone who would come and talk to community leaders, residents, and business leaders here will see there’s a will that is much stronger than anything else. That this community won’t die. That this community will be better than it ever was.”12
A handful of new commercial construction projects were touted as reasons for hope in summer 2009. Archer Daniels Midland was constructing a $543 million ethanol plant in southwest Cedar Rapids, one of seven permits issued by the city for new industrial construction. And of course, in the same part of town (far from future 500-year floods), work was being finished on Diamond V Mills’ new $25 million manufacturing plant.
Recovery started in earnest for Diamond V at 7:00 a.m. on June 19, the same day President George W. Bush toured Cedar Rapids and nearby Iowa City. On that day a structural engineer and the Paul Davis National Recovery team assessed the damage at both the plant and headquarters. John gathered his employees together an hour and a half later. He promised them that their jobs were secure and that they would not miss a single paycheck throughout the recovery process. Vicki Goble, wife of employee Mike Goble, began providing home-cooked meals for five straight days to the cleanup crews. The six employees whose homes suffered significant damage were told to take care of what they needed to on the home front first. Their jobs would be waiting when they returned.
By 10:00 a.m., recovery operations were in full swing. Four days later the temporary headquarters opened. And on June 27, eight and a half days after gaining access to the flooded facilities, the first postflood batch of Diamond V XP yeast culture was made. The plant was operating at only 25 percent capacity and would not be fully operational until July 3.13
Mayor Halloran recalled that John was a tireless advocate for his company during those first days of recovery. “As the water receded, John was in everybody’s face—in a very nice way. ‘I need electricity. I need this. I need that.’ He just was pleasantly persistent.
“Eight and a half days after the police told him it was safe to go back to his facility, he was back in production. That to me is almost astonishing. He told each of his employees, ‘Take care of your home and your family. When you got that under control, come back; we have plenty of work for you to do—cleanup and everything else.’
“So they did that, and then they came back and cleaned out the manufacturing facility and went back to work. Sometimes they had to use makeshift packaging for the product because the rest of it had gone away in the flood. But they kept moving; they kept getting things done. None of his employees, not a single one, went without a paycheck.”14
Something else occurred on June 19. That was the day John and his wife ventured into the flooded neighborhoods— down the muddy streets where fifteen-foot-high stacks of destroyed personal items and housing materials waited to be hauled away to the landfill—to the damaged houses of four of the six flood victims (two of the houses were completely destroyed) that worked at Diamond V and handed each homeowner a personal check for $5,000. “We were trying to get money in their hands as quickly as possible.” (On July 10 additional checks were issued to the six families from the DV Employee Assistance Fund.)
When I asked John what the employees’ reactions were, he teared up and then said, “Those of us that went through this, we have a special bond. No matter what your job was, those of us that went through this, . . . the feeling we have for each other—it’s family. It really is family. It’s unbelievable.”
One employee thank-you note said the following: “Words cannot describe how we felt after receiving your gift. Our overwhelming emotions has [sic] kept us from making the thank-you call you deserve. With the turmoil going on in both our lives right now, your personal devotion to the affected employees is the reason I’m proud to be part of the Diamond V family!”
Another employee was so shaken that he had a neighbor write his note for him: “My mom’s next-door neighbor was moved to tears by your personal act of kindness and gift to him. I just want to personally thank you for gracing our neighborhood with your kindness.”15
Not surprisingly, a year later those six employees are all still working at Diamond V Mills.
After our interview and a tour of the Time Check manufacturing plant, where it was obvious that the employees held John in high regard—and that the yeasty odor is better experienced at a distance—we got into his black BMW and rode across town, far away from the river, toward IA 30, where the new manufacturing plant was under construction.
As we drove south through the city, John reiterated how grateful he was to all his employees, “how hard they pitched in and never complained.”
I interrupted John’s good news story by bringing up Frank King’s theory that the city of Cedar Rapids saw the flood as an opportunity for economic cleansing, to rid itself of middle-class neighborhoods like Time Check.
“In regards to Mr. King’s comment, I don’t believe there is any kind of motivation to do that. But do we need to really look at very serious flood protection so this does not happen again? Absolutely. The Army Corps of Engineers got the funding approved to do their flood plan study. The only problem is, [it’s] probably going to be another ten to twelve years before the recommendations of the study are implemented. The study will take three years to get done, and then they’ll have to get congressional funding to do the work.
“What the city wants to do is, basically, flood protection. Most of [the land] around here will become green space, with some floodwalls and new dikes built. And they’ll have removable floodwalls to protect Quaker Oats and the downtown area. We’ll probably have to sell this building [corporate headquarters] and get out of here.”
John said that the manufacturing plant, with its location farther away from the river, would probably be safe from a buyout.
The new 64,000-square-foot manufacturing plant is in a part of the city without a definable neighborhood. There are no houses around, nothing to relate to except the plant that is situated on seventy-seven acres. As we idled in John’s air conditioned BMW, I thought of Grandpa driving down each morning to the bus garage in Time Check. What would he think of this new “industrial corridor”?
One month and a day later, Iowa’s Governor Chet Culver and Cedar Rapids’ Mayor Kay Halloran cut the ribbon and officially opened the plant.
On that September day John said, “The completion of this second manufacturing facility demonstrates our commitment and leadership to the industry. Words cannot express the appreciation we feel for our employees, our vendor partners, and most importantly, our customers.”16
No one was surprised that John expressed his appreciation for his employees first.