IBEW Local 1985 Looks to Buy Hoover Plant from Maytag

	Posted on Sat, Apr. 22, 2006
	EMPLOYEE OWNERSHIP NO LONGER UNUSUAL IDEA Worker-owners aren't alone Hundreds at 20th annual conference in Fairlawn By Jim Mackinnon Beacon Journal business writer In the 1970s, getting people to consider converting a company to employee ownership was a hard sell. No more. Converting businesses to employee ownership, where employees typically own 30 percent to all of a company, is gaining popularity, said Corey Rosen, executive director and co-founder of the California-based National Center for Employee Ownership. The vast majority of the employee-owned firms start out as financially healthy businesses, often with aging owners who want to retire and are looking for a buyer, Rosen and others told about 320 people at a conference Friday in Fairlawn. Employee ownership often includes special tax breaks that make the concept attractive to sellers as well as buyers. While there were as many as 7,000 employee stock ownership plans, or ESOPs, in the United States in 1986, now there are 11,000 ESOPs and as many as 30 million employee-owners, Rosen said. ``It's no longer a weird idea,'' he said. Rosen was one of two keynote speakers at the 20th annual Ohio Employee Ownership Conference, held at the Hilton Akron/Fairlawn and sponsored by the Ohio Employee Ownership Center at Kent State University. The other speaker was Steve Sheppard, former chief executive officer of employee-owned furniture company Foldcraft in Minnesota. ``Participation is a universal need,'' said Sheppard, who now heads the Winds of Peace Foundation, which makes grants and micro-loans to the poor in Nicaragua. But employee-owned companies also need profits, cash flow and the other things that are the lifeblood of any business, he said. Glenn Leppo, 42-year-old president of Leppo Equipment in Tallmadge, was among the conference attendees researching employee ownership. His family-owned construction and building-related business, founded in 1945 by his grandfather, has expanded from one to six stores in the past 12 years and now has 90 employees, he said. ``At this point, we're still in the investigative stage,'' Leppo said. He came to the conference to speak to people in already established employee-owned companies about how they make it work, he said. Leppo said he is interested in the possibility of employee ownership mainly because of the philosophical component: ``that the employees share in the success.'' At one panel discussion, Jim Repace, president of the International Brotherhood of Electrical Workers Local 1985 at the Hoover Co. in North Canton, said his 800-member local began exploring employee-ownership of Hoover in 2005. That decision came after Hoover's struggling former corporate parent, Maytag Corp., said it could close the plant. Whirlpool Inc., which bought Maytag earlier this year, has said it may retain Hoover or sell it. If Whirlpool sells Hoover, the union wants to create an ESOP and buy the company to save jobs, Repace said. ``We don't know what Whirlpool's intentions are. We don't feel Whirlpool wants to be in the floor-care business,'' he said. The union's consultants may finish their feasibility study in the next couple of weeks, he said. While the IBEW is looking to create an ESOP to save jobs, at least 60 percent of ESOPs nationwide are created because the business owner is retiring, said John Logue, director of the Ohio Employee Ownership Center. Fewer than 10 percent of ESOPs are created as a job-saving device, he said. (The Newspaper Guild, which represents some Knight Ridder Inc.employees, including some at the Beacon Journal, is also researching an ESOP involving the Beacon Journal and up to 11 other of Knight Ridder's newspapers.) ESOPs aren't the only form of employee ownership. Conference organizers honored a small Brimfield Township company, Select Machine Inc., for becoming the first employee-owned cooperative in the nation earlier this year. A cooperative is relatively inexpensive, but it has fewer tax advantages than an ESOP. The firm, which makes machined products and equipment, has nine employees, making it financially impractical to become an ESOP, which is better suited for larger companies. The Kent State employee ownership center said Select Machine is now a new model for employee ownership in companies with fewer than 25 employees. About 320 people registered for the conference. The bulk of attendees, about 200, were nonmanagerial employees of employee-owned businesses, Logue said. Others at the conference included representatives of about a dozen companies whose owners are quietly researching employee ownership, he said. Jim Mackinnon can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com

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