Yes to Profit-Sharing, No to Layoffs for 64 Years in a Row!
Worker pushing a table laden with copper coils at the Lincoln Electric Company. Photo by Bob Leavitt/Pix Inc./Time Life Pictures/Getty Images.
Paul Solman answers questions from the NewsHour audience on business and economic news here on his Making Sen$e page. Here is Friday's query:
Paul Solman: We first reported on Ohio arc welding company Lincoln Electric, the improbable Rust Belt success story, in pre-Internet 1992, so long ago that we can't even provide a link. We returned in 2011 to find its unique blend of internal competition and cooperation intact: pay by piecework on the one hand; no layoffs and hefty profit sharing on the other.
Read the full transcript here.
Some viewers extolled our coverage; others thought we were too easy on the company.
A key source of ours was Canadian journalist Frank Koller, who wrote "Spark," a 2010 book about Lincoln Electric whose subtitles tell it all: "How Old-Fashioned Values Drive a Twenty-First-Century Corporation: Lessons from Lincoln Electric's Unique Guaranteed Employment Program."
A few weeks ago, he shared Lincoln's latest results and I tweeted them:
Frank Koller: Rust Belt Lincoln Electric 2012 bonus avg, $34k/worker; no layoffs 64th year in a row. Our 2011 profile to.pbs.org/mXr0hZ
— Paul Solman (@paulsolman) December 15, 2012
Koller sent me this further explanation, reproduced in its entirety below:
Frank Koller: The Motley Fool, the popular U.S. investing website, asked me to write a piece on Lincoln Electric's 2012 bonus and no-layoff stats -- with attitude! Writing just before Christmas, I tapped my inner Scrooge: "A Shocking and Shameful Lack of Imagination".
Here is a short rundown of Lincoln Electric's 2012 stats from that article:
The bonus has been paid for 79 uninterrupted years in a row. This year, Lincoln Electric shared $99.3 million of pre-tax profits with employees. The average 2012 bonus was $33,915 per worker. The average employee earned $82,300 (including the bonus). No one was laid off in 2012.
Meanwhile, the New York Times ran a piece Dec. 21 titled "No-Layoff Company Now Writes Profit Sharing Checks" about Marvin Windows and Doors, a family-owned business based in northern Minnesota, .
I chuckled when I read the story about Marvin Windows (an excellent company, good employer, no question), revealing what the Times considers to be "impressive performance."
Have a look at a graphical comparison between Marvin Windows and Lincoln Electric: