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Lincoln Electric Company's No-Layoffs Policy (Ethikos Archives) Lincoln Electric Company's No-Layoffs Policy (Ethikos Archives) July/August 1988 - By Andrew W. Singer. How a DownTurn Put One Rust Belt Company’s Principles To The Test“Studying ways to improve your company’s productivity?” asked Forbes in a July 1982 article. “Cancel that plane ticket to Japan. Go to Cleveland instead.” The company is the Lincoln Electric Company, the world’s largest manufacturer of arc-welding equipment. Its factory workers are among the most productive and best paid in America—a few have earned as much as $80,000 a year. It has had employee profit-sharing since the 1930s and a guaranteed employment policy since the 1950s. The concern has been analyzed in Harvard Business School’s casebooks; General Motors executives have visited and studied its management incentive policies. Problems in the Rust Belt notwithstanding, the company has turned a profit every year for 54 years.Yet, ironically, when the Forbes profile appeared (“Here’s a company that puts workers ahead of stockholders and yet earns 19 percent on equity capital,” editor James W. Michaels marveled) Lincoln Electric was mired in its worst downturn since the Great Depression.“Energy, farm implements, automotive”—all customer segments—“went down at the same time,” recalls Donald F. Hastings, Lincoln Electric’s President. “We never had anything like it.” The company’s domestic sales plunged 40 percent, from about $370 million to a low of $220 million in the period from 1981-1983.The company faced a wrenching decision. Since 1958, Lincoln Electric had a written guaranteed-employment policy of 30 hours a week for workers with at least two years service. Full Article: http://www.singerpubs.com/ethikos/html/lincolnelectric.html |
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2006 Ethics-Governance.com |
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