Six weeks before Donald Trump was elected, the Pew Research Center found that Springfield was the most devastated of Rust Belt cities. Between 1999 and 2014, the median income of the city fell an astounding 27 percent, more than any metropolitan area in the country. WYSO contributor Tom Stafford
Tom Stafford: In 2020, 50 employees of Valco Industries, which fabricates metals, and A&E Coatings, which coats them, were called to a meeting. With owner Ed Leventhal in his early 70s, it seemed a safe bet that the company’s future was on the agenda – and with it, the employees.
Dave Denney: There were a lot of people nervous.
Tom: That’s Dave Denney.
Dave: I’m in shipping, 16 years.
Tom: Sales Engineer Bob Wilkerson wasn’t worried at all.
Bob Wilkerson: I knew Eddie was too loyal to the employees and to the community to sell the company or move it out of town.
Tom: Employees gathered at Mother Stewart’s Brewer in Springfield recently as the company celebrated its first anniversary under an Employee Stock Ownership Plan – an ESOP. Here’s why Ed Leventhal made that choice.
Ed Leventhal: It ensured that the people working there would continue to work there and provided a vehicle to increase their wealth by becoming owners of the company.
Tom: Leventhal had other reasons as well. He has seen local companies sold and either relocated or closed by out of town owners. He also saw Springfield lose 20,000 people – one fourth of its population – when manufacturing moved overseas.
Megan Watson: Put it in the blue cup, please. Fold it up and put it in the blue bowl.
Tom: At the party, Megan Watson was telling people how to enter prize drawings. Most days, she is responsible for accounts payable and receivable, and her Human Resources duties put her in regular contact with all the employees. She calls the attitude toward the ESOP positive.
Megan: I think it’s exciting for all of us. It’s certainly a benefit for our future and our families’ future. A lot of people see it as an additional retirement savings program.
Tom: Employee owners accumulate company stock with years of service – stock that will supplement their Social Security and a continuing 401 K program upon their retirement.
Megan: You know, the better we do, the better we perform, the better we are in the long run financially.
Tom: People were split over that incentive’s overall appeal. Soon to retire, Senior Fabricator Michael Hughes said that retirement was the last thing on his mind when he was young.
Michael Hughes: I look at it like younger people don’t see the future, as I didn’t, when I was young.
Tom: That difference introduces an element of potential conflict spelled out by Don Briggs.
Don Briggs: You pay attention to what everybody else is doing around you because if someone’s goofing off, they’re taking money out of your pocket.
Tom: Cody Evans, a 30-year-old press brake operator, says buy-in tends to come with age.
Cody Evans: For a lot of us that have families, we see the real value in that. I’m grateful that Eddie decided to go that route.
Tom: For the new owners, 45-year-old Joe Guinn represents the many people who work to live rather than living to work. Asked if his 10 years on the job have gone quickly, he said.
Joe Guinn: Sometimes yes, sometimes it feels like I’ve been there 30 years already. That’s probably going to be anywhere.
Tom: He’s nonetheless a versatile asset.
Joe: I’ve done millwork, the break press, the stamping press, assembly, shipping, I’m training on the laser.
Tom: Adrian Woodson, 42, grinds and sandblasts metal parts every week with his children’s futures in mind. When it comes to the ESOP, he says so far, so good.
Adrian Woodson: Ain’t nobody in here thinking like we’re bosses, like telling people what to do or whatever. We just make a little more money on the side that don’t see until the end of the year.
Tom: Because the industry and its work will change, Megan Watson said the company will need to communicate more regularly and thoroughly with its new owners.
Megan: If there’s new machinery, how are we going to work more efficiently or do we have new customers that’s going to benefit ? I think there’s more questions being asked.
Tom: Future managers might also note what Leventhal has been doing: To make the long term benefits of an ESOP more apparent, he put a year’s worth of stock earnings into employee accounts up front. He’s also explaining to young workers how much retirement money they sacrifice if they leave for a pay increase $1 or 2 an hour before they’re vested. Both are part of an encouraging, management style developed over the years by a guy they all call
VOICES: “Eddie,” “Eddie,” “Eddie.”