Over the years, Owners At Work has written about many employee-owned companies. More often than not, the occasion is their going employee owned. But employee ownership is not the end of the road: it's just the beginning.

How have they fared?

Unlike Bliss which went into liquidation during the steel crisis of 1998-99, most have done well. As a matter of fact, of the 51 firms which the OEOC has assisted in establishing ESOPs since 1987, only 2 have failed -- although more than a dozen of them were bought to avert shutdown. Employees have sold 5 of them and 1 has terminated its ESOP. Forty-three remain partly or wholly employee owned. Here's an update on four Ohio firms we covered in past issues of Owners At Work:

Producers Services
When Dan Pottmeyer called the OEOC in June 1994, he was a few days into a frantic effort to rescue Producers Services, a Zanesville, Ohio, oil field service company, from shutdown. With the decline in oil and gas drilling in the state over the previous decade, the company's CEO and largest stockholder had put its surplus equipment up for sale and had received an offer from a Canadian company that was too good to refuse. The trouble was, it was for all the company's equipment and the Canadians didn't want to run the company in Zanesville; they wanted to shut it and ship all the equipment to China.

While it was an attractive way for the shareholders to exit profitably from a marginal business, the employees were less pleased. Their protests at the May 23 shareholder meeting got them 60 days to raise about $2 million to match the Canadians' offer.

"Ever heard of anyone doing an ESOP buyout in 60 days?" Pottmeyer asked. "That will put you in the Guinness Book of Records," we replied, "but we have frequently seen deadlines get postponed when you are making good progress."

Over the next weeks, Pottmeyer and OEOC staff kept the phone lines buzzing looking for investors, seeking lower interest loans with state support, and working to restructure the deal to make it possible to keep some of the selling shareholders in and to reduce the tax liability for those who were getting out. On September 2, just 100 days after the May shareholder meeting, loan papers were finally signed and employees acquired 85% of the company. The Producers Services buyout was the subject of our Winter 1994/5 cover story.

Since then, Producers Services has done well under employee ownership. While its first year was grim, the last four years have been much better. Even during its strapped first year of employee ownership, Producers Services sought to reduce the cyclicality of its employees jobs and regular layoffs by instituting the policy of rebuilding its equipment in-house during the slow winter season, instead of outsourcing repairs. That policy has paid off by providing more work for employee owners and saving money as well.

Producers Services paid off its initial purchase debt in 1999 and bought out the remaining outside shareholders. Employment is up from 14 at the time of the buyout to 18 today. The average employee, who rolled about $20,000 in profit sharing money into the ESOP in 1994, now owns ESOP stock worth about $100,000.

"Our ESOP helped us save our company," said Pottmeyer. "Employee ownership allows us to do a lot of things well. If you talk to our customers, I think they'll tell you that it shows."

Shortway
Employee ownership put IBT Local 20 Chief Shop Steward, Willie Mays back in the driver's seat in 1995 when the 25 employees bought Shortway, US Transportation Service's Toledo-based charter bus company to avert shutdown. Mays became the company's first president. (Owners At Work, Winter 1995/96)

Today, Shortway President Ed Gilroy says that overall, employee ownership has worked. "We increased our fleet and employment. Morale is good, and the outlook for the future is positive."

Fastener Industries
In 1980, employees led by CFO Rich Biernacki bought Fastener Industries—the Ohio Nut and Bolt, Buckeye, and Modern Fastener facilities on Cleveland's West Side—from the Whelan family. It's the oldest 100% ESOP company in the state, and it was featured in Owners at Work's Spring 1990 and Spring 1992 issues.

Today, Fastener is a national model for what employee ownership can achieve. It is one of the most productive and profitable companies in its industry.

It combines the best of modern corporate and employee ownership practices. Organizationally, the company is virtually flat: machine operators report directly to the plant manager. Quality is built into the production process. Hourly production employees work a 35 hour week. There is a full tuition reimbursement program for further education (up to $2,500 annually), and Fastener has sent the overwhelming majority of employees through one or more of the Ohio Network training programs. Fastener promotes virtually entirely from within, creating career ladders for employee owners who use their educational opportunities. The five-member board of directors is elected every second year by employee shareholders, and anyone who can get ten signatures from Fastener employee owners on a nominating petition is eligible to run.

Fastener has bought two other companies -- Joseph Industries in Streetsboro and Brainard Rivet in Girard -- and included their employees in the Fastener ESOP.

It has paid off for employee owners. The company's profit sharing bonus in recent years has typically amounted to a month's pay, and dividends on ESOP stock for machine operators who have been at Fastener since the beginning of the ESOP approximate another 3 months pay. Despite these heavy payouts, Fastener stock has appreciated an average of 14½ % annually since 1980. The consequence is that machine operators who were there at the start of the ESOP are retiring 20 years later with ESOP stock accounts worth roughly $350,000.

Making fasteners—nuts, bolts, levelers, weld fasteners—is a tough, grubby and highly competitive global industry. A lot of the jobs in this industry—including many that used to be in Cleveland—have gone overseas, chasing ever lower wages. Fastener Industries has stayed on the West Side, reinvested, and prospered. It's prospered not only because it's been well managed. It's prospered because the men and women who work there own the place, know they own the place, and know that they are working for themselves.

Quincy Castings
Quincy Castings, bought by the employees from Warren Tool in 1990, is a grey and ductile iron foundry in Quincy (population 687), Ohio. We wrote about it in Spring 1992, Spring 1993, and Summer 1995 issues of Owners at Work.

Quincy Castings was a marginal operation for Warren, but it has flourished under employee ownership. Quincy has focused on involving employees, building trust, opening communications, and redesigning supervision to fit employee owners. It has undertaken two plant expansions. Employment has grown from 80 in 1990 to 100 in 1999.