Falcon Industries Gets ESOP

Congratulations to Falcon Industries, which established its ESOP as a 30% buyout from owner and President Don FitzGerald on October 3, 2000. Falcon's 40 employees are located in two identical plants - one in Medina, Ohio and the other, in Cosmos, Minnesota. Falcon manufactures flighting and conveyer screws. For the uninitiated, these are the metal helix (spiral-shaped) elements which have a broad range of applications in moving materials from small metal chips in machine tools to steel billets in high-temperature furnaces to moving earth in massive drilling and boring equipment. The owner wanted to create the ESOP as a reward for the employees who helped develop and grow it into a business with multi-million dollar sales. With a small workforce, Falcon Industries does not have a complex organizational structure, but they do have a three-person communication committee in each plant to educate the employees about the ESOP, hold quarterly meetings of all employees, and meet on the shop floor on a daily basis. Although there are no nonmanagerial employees on the board of directors, the firm practices employee involvement in that all unusual orders and problems are reviewed and discussed down to the operator level, according to Vice President Robert Taylor. And management is on the shop floor daily. Employees participate in current success through a quarterly incentive program based on quality, timely delivery, and productivity. The owners at Falcon Industries have a lot to be proud of. Their company's sales have grown by 30% in the last year; they have earned very high quality ratings, and over 90% of products are shipped on or before the day originally promised at the time of sale.

Kraft Fluid Systems hosts Lt. Governor, meeting of employee-owned companies

Ohio Lt. Governor Maureen O'Connor helped eight northeast Ohio employee-owned companies celebrate Employee Ownership Month at Kraft Fluid Systems in Strongsville. All of Kraft Fluid's employee-owners joined representatives from the Chilcote Company, Falcon Industries, Fastener Industries, Gallo Displays, Joseph Industries, The Mosser Group, and Patio Enclosures. The Lt. Governor shared her views on employee ownership and acknowledged the positive attitudes, camaraderie and enthusiasm at Kraft Fluid, and the other companies as well. She also recognized the direct correlation between employee-owner productivity and employee-owner compensation.

Also in attendance was Strongsville Mayor Walter F. Ehrnfelt and the OEOC's Director John Logue. At the conclusion of the Lt. Governor's remarks, Mayor Ehrnfelt presented Kraft Fluid with a plaque and a key to the city in recognition of the success of Kraft Fluid's 2-year old ESOP.

McIlvaine Trucking Goes 100% Employee-Owned

Congratulations to McIlvaine Trucking which is now 100% owned by its employees. The $14 million dollar leveraged transaction was completed at the end of July, with owner Gregg McIlvaine taking a personal note to make the deal succeed. McIlvaine's approximately 125 employees are spread over six states, with main offices in Wooster and Huber Heights, and additional support centers in Pennsylvania, Indiana, West Virginia, and Kentucky. The company also contracts with about 100 independent haulers. With about 250 tractors and up to 300 trailers, they specialize in hauling propane, asphalt and chemicals. The firm also services retail distribution centers with approximately 75 vans. Last year McIlvaine had about $25.5 million in sales, and they are projecting $28 million for this year.

"Business is good," states President Gregg McIlvaine. He established the ESOP for his employees in 1997, when the ESOP purchased 26.5% of the stock. McIlvaine plans to serve in his current position for at least the next four years, and he and his father Joe constitute the board of directors. "I hope I'll be here for a long time," says McIlvaine, even while he is planning to shift more responsibility to the firm's managers, who are also owners. With multistate operations and many employees on the road, even simple communication is a challenging task. McIlvaine Trucking has a newsletter which includes financial information, and it supports an ESOP education roundtable for about 25% of its employees, with the expectation that the participants will educate the rest of the employee-owners. McIlvaine's goals include expanding the Board of Directors by adding representatives from management and non-management as well as outside directors. The current agreement projects retirement of the ESOP loan in 17 years.

Ford Foundation Funds On-line Think Tank

The Capital Ownership Group, with its Virtual Think Tank, has been refunded by the Ford Foundation for two years. This online discussion about spreading ownership worldwide continues to attract activity and provide an information exchange for scholars and practitioners. The new funding will provide for a major conference and publication of the results and findings of the group. Check it out at http://cog.kent.edu.

Congress Passes Aid for Employee Ownership in Import-Battered Steel and Aluminum Industry

With the support of Rep. Tom Sawyer, the OEOC has received a $275,000 appropriation from Congress through the U.S. Department of Labor to assist companies in the steel and aluminum industries adversely affected by imports. The National Steel/Aluminum Retention Initiative grant funds studies of the feasibility of employee ownership. The appropriation allows the OEOC to aid companies anywhere in the country. It was part of a $109 billion appropriation for labor, health and education passed on December 15, 2000.

Employment and Graduate Study Opportunities in Employee Ownership

The OEOC expects to advertise one or more additional professional staff positions within the next months. If you would like to receive the job description when the position is advertised, please send a letter to that effect to Karen Thomas, Associate Director, Ohio Employee Ownership Center, 309 Franklin Hall, Kent State University, Kent, OH 44242; fax 330-672-4063.

The OEOC expects to have a vacant graduate assistantship for the 2001-02 academic year for a student enrolled in the graduate program in public policy in the Department of Political Science at Kent State University and who is interested in employee ownership. To obtain an application, please contact Beth Wilson at 330/672-2060 or email your request to "public.policy@kent.edu". Please mention your interest in this assistantship in your letter of application.