Lincoln Electric, which I profiled in my book SPARK, just announced its 2015 employee profit-sharing results, backed by the firm’s now 67 years-long unbroken no-layoff promise.
2015 details (2014 in italics) with my comments further below.
82 = uninterrupted years paying an employee profit-sharing bonus (Lincoln has been profitable every year since 1934.)
$ 26,291 = average 2015 bonus / permanent U.S. employee (apprx. 3,000) (2014 $33,984 )
$ 73,543 = average 2015 total earnings per employee (wages/salary + bonus) (2014 $82,903 )
$ 80 million (apprx.) = pre-tax profits shared among employees (32% of pretax corporate profit) (2014 $101 million (approx.) )
0 = number of layoffs in 2015 (67 years layoff free)
Lincoln (Nasdaq: LECO) remains #1 in the global marketplace for welding technology and materials.
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 in the US for lack of work through the Great Depression, wars and the Great Recession.
My 2015 comments:
These are tough times for manufacturing globally and that includes Lincoln. The collapse in the price of oil, austerity measures in many countries, etc. have reduced spending on infrastructure and construction (for energy projects and general purposes) almost everywhere. These are Lincoln’s prime markets. The rise in the US $ has also lowered sales and hence profits.
As a result, the average bonus is smaller this year. BUT … no one was laid off.
For a number of months, Lincoln’s US production workers have been on reduced hours: many regularly work only 32 hours per week, the minimum guaranteed under the terms of the no-layoff promise. (Slowdowns in place in other production countries too.) This is a significant and painful sacrifice for employees and their families.
BUT … it still means steady work, no small thing compared with the unemployment office. (Lincoln employees are covered by the no-layoff policy after 3 years with the firm.)
In 2009/10, as the Great Recession dragged on and on, non-production workers (from the President to floor sweepers) saw their salaries reduced and their workloads were often increased. (This may happen again now.) BUT …. there were no layoffs.
A voluntary separation program is also now being offered, as it was during 2009/10.
Lincoln Electric is an American-based Fortune 1000 multinational. In other countries where it has production facilities, it tries – under often very different legislative, labor and regulatory regimes – to treat its workers with the same respect and employment structure that US employees earn. In Canada, Australia and Mexico, profit-sharing and steady work has remained as close as possible to that in the US itself; further afield, local factors have forced many accommodations.
In the past couple of years, Lincoln has purchased some smaller welding tech companies in the US. In several cases, when offered employment under the Lincoln incentive system – with its appealing upsides of large profit-sharing bonuses and an unbroken no-layoff promise – employees in these new acquisitions have rejected the offer – because the new employment structure also requires them to embrace reduced hours in tough times and compulsory overtime when demand picks up.
Their concerns and fears seem to arise from a deep and profound lack of trust (sadly, all-too-understandable!) in modern corporate leaders that shared sacrifices by everyone in a firm in the tough times will be repaid fairly through significant profit-sharing and guaranteed steady work over the long term
Lincoln Electric has done its best to earn the trust of its workforce by keeping its people on the job through thick and thin – while remaining technologically innovative and thus highly profitable for more than a century.
This goal should be embraced by many more private sector firms and by policy makers in the public sector at all levels.