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425 at Ohio conference focusing on ownership
By Marilyn Miller
Beacon Journal business writer
Published on Saturday, Apr 19, 2008
The idea of an employee ownership business is attracting more interest these days in a shrinking job market.
At least 425 people registered for the 22nd Ohio Employee Ownership Conference Friday at the Akron/Fairlawn Hilton Inn to learn about Employee Stock Ownership Plans, or ESOPs.
The one-day conference on ESOPs, which make the employees of a company owners of stock in that company, focused on job retention in a global economy.
According to the Ohio Employee Ownership Center at Kent State University, during the past 10 years, the rate of ESOP growth in Ohio has been three times that of the United States as a whole.
John Logue, director of the Ohio Employee Ownership Center and a political science professor at Kent State, said ESOPs anchor capital locally, increase the rate of reinvestment, increase job security, build family assets and stabilizes the tax base in the community.
Logue talked about the loss of one of the nation's traditional industries — manufacturing in Ohio — and how layoffs and plant shutdowns shifted those jobs to lower-wage states and countries.
He said that since January 2000, Ohio has lost 317,000 manufacturing jobs, and more than 29 percent of the manufacturing base was replaced with service jobs, which pay 20 to 30 percent less and carry health benefits that aren't as good.
He said ESOPs would have been a way to save jobs and increase employment.
Logue said ESOPs can be considered a way of financial survival because they retain jobs and expand the local labor market.
ESOPs have outperformed their conventional competition and there is far less outsourcing, he said. They are two times more likely to reinvest in local businesses and more likely to have training.
The number of ESOP firms in Ohio grew slightly from last year. In 2007, there were 337, compared to 322 in 2006.
According to the governor's office, there are about 400 partially or wholly employee-owned companies in Ohio, with about 480,000 employee owners.
Joseph Cabral of California, retired president and chairman of Chatsworth Products Inc., gave a national glimpse of the growing number of ESOPs.
He said there were 7.75 million participants in 1995 with assets of $226 billion; in 2007, there were 11.2 million participants with $928 billion in assets.
Where to get ideas
David Heidenreish, chairman and chief technology officer of EBO Group Inc. in Sharon Center, named several places to find ideas, including universities, venture capital conferences, economic development groups and the program JumpStart, which helps accelerate the growth of early-stage ideas and businesses into venture-ready companies.
''NASA sometimes is just looking for someone to commercialize ideas they come up with, so that's a good source, too,'' he said.
''And don't overlook the people who work for the company, because often that's where the best ideas are coming from.''
Heidenreish said some of the funding can come from employee/owners, venture and angel capitalists as well as grants from the state and federal government.
Other panel discussions included the basics of ESOPs, how to compete with China, the responsibilities and benefits of ESOP participation and strategies to avoid a have/have not culture where older employees have all the shares and newer employees are not accumulating many shares in their accounts.
Marilyn Miller can be reached at 330-996-3098 or 800-777-7232 or mmiller@thebeaconjournal.com.
The idea of an employee ownership business is attracting more interest these days in a shrinking job market.
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