At the 22nd annual Ohio Employee Ownership Conference on Employee Ownership in the Global Economy on April 18, 2008, Carbo Forge, Fremont, Ohio, was recognized for 20 years of success with their Employee Stock Ownership Plan. The conference was organized by the Ohio Employee Ownership Center, Kent State University, Kent, OH.
The 44-employee steel forging company (www.carboforge.com) is 100% ESOP-owned. According to company officials, company founder Myron “Mike” Kraak liked the idea of employee ownership as a retirement strategy. He created an ESOP in 1988 with an initial stock contribution and by 1992 the company became 43% employee owned through the ESOP trust. Mike’s vision was to eventually take the company to 100% employee owned.
“Mike did not have any children of his own,” explained President and CEO Jeff Woitha. “All of us were his family.” But declining health did not allow him to complete his ESOP dream and in 2001 he sold his shares in the company to three senior managers including Woitha. “It was always our intention to follow through with Mike’s dream of becoming 100% employee owned,” says Woitha, “and in 2003, our executive management team began the journey to 100% employee ownership.”
“As a company, we were not ready to be 100% employee owned back in 2001. First, we needed to understand more about ESOPs and how they function. We also needed to develop a culture that would allow an ESOP to flourish.”
The company became a member of Ohio’s Employee-Owned Network and took part in the CEO and CFO dinners, roundtables, and annual conferences. “After three years of planning we learned how to better administer our plan, formulate our game plan, and assemble our team,” says Woitha, “and in June of 2006 we became 100% employee-owned.”
Woitha credits the OEOC and the achievement of becoming registered to the new TS:16949 automotive standard for helping them to develop systems for long-term success. As he explained: “An ESOP will not automatically make your company successful. It is not a magic wand. Our recipe for success focuses more on safety, quality, and efficiency and not as much on the ESOP. The ESOP is a vehicle that will allow our employees to participate in the Beneficial Relationship that we share with the company if we continue to be successful and competitive. Through the ESOP, we will all retire as owners — so we all need to help the company grow in wealth.”
Carbo Forge manufactures steel forgings for several markets including ordnance, heavy truck, light truck, automotive, aftermarket, material handling, agriculture and firearms. The company is certified to the new TS16949:2002 automotive standard as well as 1509001:2000.
Woitha attributes Carbo’s success to the employees. “It’s the people that make the difference. You can have all the technology in the world behind you but, if you don’t have the people, you will not be successful.”
For information on the Ohio Employee Ownership Center, consult its website at www.kent.edu/oeoc