"According to the Harvard Business Review,employee ownership can reduce economic inequalitybecause the primary beneficiaries of profitable businesses are working- and middle-class people. Also, the businesses act as capital for their employee-owners, which is the first step towards building community wealth, because the employee-owner can use that asset to accumulate more equity, such as buying a house in the community."
As Tom Adams, co-founder of Adams & Chittenden Scientific Glass, started planning his exit into retirement, he knew what he didn’t want to happen. Twenty-six years earlier, Adams was a production manager at a scientific glass blowing company in Berkeley, Calif., when the last of the company’s founders decided to sell the company to an MBA with no expertise in the field. Beyond the new discomfort within the company, the final straw was when the new owner denied Adams’s request for a raise.
Resigning and starting a competing scientific glass company with his partner George Chittenden was a “rapid transition” that has served the glass blower well, but that doesn’t mean Adams wants to force any of his employees into the same choice after his own exit from the company.
“It lurked in the back of our minds for a long time because it was apparent we were getting older,” Adams said. “We were part of that classic position of being part of the silver tsunami.” Adams is referring to the wave of baby boomers who are aging out of the workforce.
With nearly half of privately owned U.S. businesses with employees owned by boomers, Adams and Chittenden were facing an increasingly common problem: Develop a succession plan or close the business, which in their case would mean laying off eight employees and shutting a company they had built from the ground up.
Finding a competent buyer was unlikely because of the niche service Adams and Chittenden provided — artisan-level glass blowing for scientific applications. Even if they did find that magic buyer, the two were concerned about the livelihood of the business after they left; the two founders have nearly a century of glass blowing experience between them.
“You can’t just hand your head to somebody and say ‘here, use this,’” Adams said. “It’s transmittable, but not trivially.”
That’s when Adams and Chittenden started looking into cooperative conversion options.
“Passing it onto a co-op means that we still get to pass that tribal knowledge on,” Adams said.
In early 2017, the pair reached out to Project Equity, a nonprofit organization that helps businesses convert to employee-ownership. That model made sense for Adams & Chittenden, whose employees were career glass blowers, not laborers in unskilled jobs.
Project Equity was at the time finalizing its Accelerate Employee Ownership initiative, a collaboration launched in September with the Shared Capital Cooperative, a national loan fund that provides financing to cooperative businesses and housing in the United States.
The initiative aims to lower barriers for businesses converting to employee-owned models by providing access to individuals and organizations who are experienced in co-op conversions, and to lenders familiar with cooperative business models. The initiative is seeded with $5 million from Quality Jobs Fund, an initiative by the New World Foundation and the Federal Home Loan Bank of San Francisco that invests in projects committed to improving quality job opportunities for workers in historically underserved areas. It aims to perform 30 conversions and maintain quality employment for more than 1,000 individuals over the next 10 years in California, Nevada and Arizona. The initiative also focuses on the positive ripple effects employee ownership can have in a community.
“It’s harder and harder for working people to make ends meet,” said Alison Lingane, co-founder of Project Equity. “We see employee ownership as creating a stable financial situation for people and their communities. This is something that addresses a lot of issues all at once.” ...
Read full report at Truthout