BY DAVID M. KINCHEN
On Friday, Dec. 12, 2014, I received the following email from Frank Koller, author of “Spark”, a 2011 book about Lincoln Electric Co. and other companies with no-layoff policies. (see the link below for my Aug. 14, 2011 review of this ground-breaking book).
“You know of my long-standing interest in Lincoln Electric’s decades-long no-layoff track record in the North American economy. The annual profit-sharing bonus ceremony was held today in the firm’s Cleveland cafeteria. Here are the details:
81 = uninterrupted years of paying an employee profit-sharing bonus (i.e.profitable every year since 1934.)
$ 33,984 = average 2014 bonus per U.S. employee (roughly 3,000)
$ 82,903 = average 2014 total earnings per U.S. employee (= wages/salary + bonus)
$ 100 million (approx.) = total pre-tax profits shared among employees ( 32% of total EBITB)
0 = number of layoffs in 2014 (66 years without any layoffs)
Lincoln (Nasdaq: LECO) remains #1 in the global marketplace for welding technology and materials.
“These figures once again provide convincing and reassuring evidence that it is possible to run a very profitable, very large, technologically superior multinational business based in the USA while honoring your obligations to employees, customers, investors and society at large. This need not be a zero-sum game, a delusion embraced by far too many, especially in the past few years.
“The Guaranteed Continuous Employment Policy remains unbroken since at least 1948. (The no-layoff track record may in fact go as far back as 1925.)
“No one has been laid off at Lincoln Electric for lack of work through the Great Depression, wars and the Great Recession.
“You will likely have read this week’s devastating New York Times article on “The Vanishing Male Worker: How America Fell Behind” which details the individual and social pain generated by the loss of work in the country.
“Keeping people at work through thick and thin as Lincoln Electric does — while remaining highly profitable and innovative — should be a goal for many more private sector firms and policy makers in the public sector at all levels.
“Happy Holidays and all the best for 2015.
* * *
(Excerpt from my review:)
“Normal” in American corporate practice is to lay off workers when times get tough, as they have been for the last three or more years. My own profession, journalism, has seen unprecedented layoffs at such major newspapers as The New York Times, the Los Angeles Times (where I worked from 1976 to 1990), the Chicago Tribune, and many other newspapers.
Since 1948, Lincoln Electric Co., the world leader and innovator in arc welding equipment and supplies, has adhered to a policy of not laying off permanent workers (those with three or more years of service) during slow periods and recessions. Instead, as Koller describes in this page-turning economic thriller — it thrilled me to see humane policies from a publicly traded corporation — the company reduces its bonuses, cuts hours and even cuts the salaries of top management. In the current “great recession,” Lincoln Electric has resorted to buyouts for highly compensated employees — many of them at or near retirement age.
My Aug. 14, 2011 review of Frank Koller’s ‘Spark’
About the Author
Frank Koller covers the workplace for the Canadian Broadcasting Corporation. Over a nearly 30-year career with CBC, he has worked and lived around the world as a foreign correspondent, including seven years in the United States. He and his wife live in Ottawa, Canada. His website and blog: http://www.frankkoller.com.
(The following is from his website):
He has long been fascinated by the ways in which economics, the world of work, family and community intersect to affect how we live our lives. It is the subject of his first book Spark, about Lincoln Electric’s guaranteed employment policy, with more to come. From 2005 to 2009, Koller was the CBC’s specialist on the changing North American workplace.
Based in Washington, D.C. from 1998 to 2005, Koller crisscrossed the US many times – covering Presidential election campaigns, the 9/11 terrorist attacks in New York City, Capital Hill during the Clinton and Bush years, financial crises such as the Enron debacle, environmental battles in New Mexico, hurricanes in Florida, urban sprawl in Oregon and cowboy poets in southwestern Missouri. He also traveled regularly to South America, chronicling economic developments in Argentina and Brazil.
From 1985 until 1998, Koller was on the road in Asia – reporting from Jakarta (where he lived for three years), Seoul, Rangoon, Phnom Penh, Tokyo, Hong Kong, Hanoi and almost everywhere in between. Koller covered the 1989 democracy protests in Tienanmen Square, the Asian economic meltdown in the late 1990s, the fall of Indonesia’s President Suharto in 1998 and Cambodia’s desperate struggle to recover from the Killing Fields. During those years, he also taught journalists in Indonesia and Cambodia on behalf of the Canadian Journalists for Freedom of Expression and the Asian Institute of Broadcasting.
His work has been recognized with awards from the Canadian Association of Journalists, the Asia Pacific Foundation of Canada and the Canadian Nurses Association among others.
Before stumbling into journalism in the early 1980s, Koller was a professional jazz musician, composer and recording artist. His 1980 album Single Malt received rave reviews in Canada: The Globe and Mail praised him as “an excellent guitarist”, while Canadian Musician magazine called him a “session man extraordinaire.” Koller earned a Master’s Degree in Transportation Systems from the Massachusetts Institute of Technology after graduating from Carleton University in Ottawa in Civil Engineering. It is widely acknowledged, however, that he must never be given any hand tools with the hope that he might be able to fix, let alone build, anything.