When employees bought the Bar Division of LTV Steel on November 28, 1989, their labor agreement pledged that "The Management and the United Steelworkers of America have established an ESOP Company named Republic Engineered Steels, Inc. in order to meet the long-term challenge of providing for increased job security and increased value of the company through the investment of approximately $500 million dollars in needed capital."

That was a bold promise for plants where disinvestment seemed to be a law of nature. For more than a decade, the fact of life in the bar plants had been retrenchment and shutdown, not new investment. After LTV purchased Republic Steel in 1984, the hemorrhage accelerated. Strapped for cash, LTV put its limited investment funds into its flat rolled plants, as the bar division bled.

The brave words of the labor agreement proved difficult to achieve. Employees bought the company just in time for the market to head south in spring 1990. Survival was the issue; major investment was out of the question. Instead the union locals and management together pulled the company up by the bootstraps using the employee participation process to cut costs and improve quality without spending significant amounts of cash.

With the end of the recession and recovery of the steel market, employee-owned Republic consolidated its financial situation. The stage was finally set for the long-awaited capital improvement program.

At the top of Republic's list was a new continuous caster to replace its old, vertical caster which had been commissioned in 1969 as one of the early casters in the country.

On a blustery day in April 1994, the company broke ground with a three-handled shovel for a state-of-the-art continuous caster. (If your hardware store doesn't carry three-handled

What sets the new Republic CAST-ROLL facility apart technologically is that it links five separate steps in steel making into a single process which converts molten steel into billets. It combines a new ladle metallurgy facility and a vacuum degasser -- vital to Republic's high quality alloy steels -- with continuous casting, hot charge reheating, and billet rolling in a thoroughly computerized single process. The blooms that come off the caster are immediately reheated and rolled on a new alternating horizontal-vertical billet mill into billets that can be sized down to 4 x 4 inches. What used to take days or weeks now takes hours.

Not only is Republic's new CAST-ROLL facility one of the most technologically modern steel facilities in North America, management and union are implementing a new work system that dramatically alters conventional steel industry work practices. It is built around team concepts, flexibility, multi-task training, and pay for skills -- but uses the existing work force who come from a traditional basic steel work culture of narrow job classification and top-down management. The average employee who bid into the facility had 17 years seniority with Republic.

Consequently, company and union made a major commitment to change. The new work system is anchored in the 1993 contract and a September 1994 agreement between USWA Local 1200 and the company, says Mark John, the hourly co-coordinator for the redesign process. "What we agreed to was pretty important: we agreed to move from an adversarial relationship to partnership. The new work system is to be less authoritarian, safer, more equitable, and it changed the role of supervisor to that of a coach." In practice, that means training. The company put the 125 CAST-ROLL employees through a total of 88,000 hours of education or an average of about 700 hours training each. That's 17 weeks.

At the commissioning on October 20, the new work system was as much a focus of attention as the new technology. "What we are witnessing here today," Republic CEO Russ Maier told the crowd, "is a new Industrial Revolution -- advanced manufacturing equipment linked to space age computerization, operated by highly trained people.... It is a new age, a new economic reality." The new work system would, he pledged, "produce lower costs and high quality products, while creating much more satisfying working conditions for all employees."

Governor Voinovich put it very succinctly: "The new work system here at the CAST-ROLL facility, based on team concepts, flexibility and skill-based pay, is the wave of the future."

How does that future look to Republic's employee owners? Kenny Green, a crane operator in #5 steel conditioning at the 8th Street Plant, is one of the employees who bid into the new facility while construction was underway. Owners at Work interviewed Green about his experience.

OAW: Kenny, the company keeps talking about all the training they did....

Green: "They really did put us through training. That's what we did in February [1995] and in March and in April and in May. There was a week on safety, there were weeks on basic electricity, basic hydraulics, theories of rolling steel, you name it. There was even a week in Italy -- that was nice -- at the Danieli training facility. We got a feel there of the equipment we were buying and went to visit some mills there that had similar equipment in operation.

"What a contrast to when I started at Republic 24 years ago! Then I hired in on a Thursday and started Sunday. Heck, I could have started that Thursday night if I had wanted to. There was no training whatsoever when I started. It was all on the job training then. They gave you your job and showed you how to do it."

OAW: What's the "new work system" really like?

Green: "I no longer have a job in the sense of a job I do day in and day out like I used to when I was a craneman. Instead, every day I perform a number of different functions: I run a crane, drive a forklift, burn steel, ship steel, work on the mill, do finishing, check size...in short, whatever needs to be done.

"We handle the steel from the reheat furnace through the mill and out the door. I am learning to do all the jobs in that end. The biggest benefit I see is pay for skill. After 20 years with the company, I was at 8 points [on the pay scale]; now with less than a year in this system I'm at 20. It's not a great difference in pay, but it is an increase. Besides, the potential is there. Before, you learned your job and that was it. Now I can go higher than that when I learn more."

OAW: This all sounds almost too good to be true. Aren't there any problems?

Green: "There are frustrations from time to time. This is a big change for all of us. It isn't easy to change habits of 24 years overnight. It's a big change for management too.

"The biggest problem I can see is management's reluctance to actually empower the hourly worker to make decisions. It's just like a child learning: mistakes get made and that is to be expected. There shouldn't be any retaliation. But it's hard to let go of that old stuff from the 50s, the 'I'm the boss' stuff. It isn't so much the foremen; they're close to the hourly guys. It's the middle managers. And, you know, the same is true with the union too; there are fears in the Canton union about the new work system...."

OAW: Knowing what you know now, would you still bid into the new facility?

Green: "Sure. We're learning to become more self-directed, taking a bigger say in what is done and how it is done. Sure, I would do it again. It is pretty amazing, too, what the technology does. Punch a button and you can change mill stands. Last night all nine stands were running, and we were running the steel off the caster straight through, taking it down to a 4x4. Do you know how long that used to take?"

Mark John sees the new work system as the culmination of Republic's innovative "H-1" system of employee involvement in decision making. The caster has a special governance structure with six hourly and six salaried members, including the plant manager and Local 1200 representative, the hourly and salaried co-coordinators, and representatives from the work teams. "A lot of the H-1 meetings were just bitch sessions," says John. "The new system takes us a couple of steps down the road to real problem solving.

"We have a facility where people come to work every day in a hurry to try something they woke up thinking about the night before, where people go home from work wanting to talk about what they did that day, rather than trying to forget about it."

Perhaps the most commonly heard argument against democratic employee ownership is that employees will choose consumption -- short-term gratification -- over investment. Hence employee-owned companies will always suffer from underinvestment and, in the long run, succumb to wiser, autocratic competitors.

The people who hold this view ought to visit Republic's CAST-ROLL facility.

The truth is real simple as tens of thousands of Ohio employee owners can tell you: Workers reinvest when they own the business because that's the route to long-term job security with high wages.

Besides, reinvestment raises the value of the business they own.

When LTV's Bar Division was up for sale, it was the Wall Street wizards who proposed to continue draining the mills and to downsize the division to a finishing operation. They would have made a lot of money -- short term -- while slashing jobs and undermining Stark County's economic base.

It was the employees -- hourly, salary, and management -- who pledged modernization, putting capital back into the mills, preserving jobs for the next generation and anchoring capital in the community. And they'll make money too, they hope, in the long run.

Who are the better stewards of our economic resources?

If you want to see the answer spread out over 450,000 square feet, come down and have a look at Republic's new CAST-ROLL facility.

It's too big to miss.