In today’s fast-paced business environment, company owners and workers often do not have the opportunity to develop deep, loyal relationships. These are times when firings are frequently delivered by text message. Algorithms and computer programs curate hiring. The human element is left out.’
A Rare Merger Plan
When the Fibrebond company in Minden, Louisiana, announced that the family-owned business was being bought out, many expected the worst. The company had built a strong reputation based on intense personal relationships with its employees. A merger plan could easily exclude worker interests and maximize profits for the buyer after the sale.
However, quite the opposite happened. Owner Graham Walker had other ideas about who would profit from the deal. He made sure each of his workers received a six-figure bonus as a mark of his appreciation for those who had stood by him through thick and thin. He arranged for all employees, including those without stock options, to receive an average payment of $443,000 as part of the merger deal.
The CEO carefully designed a program that would benefit everyone, employees and the new owner.
Taking Care of Everyone
He did not simply give the workers the payments as a single payout because the taxes on the gifts would significantly reduce the benefits. Instead, he arranged for the payments to be incorporated as bonuses into the employees’ future wages, thereby avoiding the tax penalty.
At the same time, he insisted that employees stay with the company for five years to qualify for the bonus. This measure saved the new employer from the danger of a mass exodus. However, employees nearing 65 were allowed to take the full payment to avoid disrupting their retirement plans.
Loyalty Built Up Through Trials
The story of Fibrebond is a tale of survival over the course of decades. The firm was founded in 1982 as a manufacturer of protective structures for electrical equipment. With the boom in cellular and electronic appliances in the nineties, the firm prospered until a near-fatal fire in 1998 that severely hampered production. The company went through a long period of decline, with its workforce cut from 900 to 320.
The Walker family ensured that those who remained were paid, even when demand for their products was low. They also took over the daily management of the firm, sold assets, paid down debt, and personally sought new clients to keep things running.
Employees responded to the solicitude by agreeing to wage freezes during especially tough times. The company mitigated the impact of these measures by establishing a fund to help employees who had trouble paying their bills. In this way, many preferred the close-knit, family-like atmosphere to seeking a higher-paid alternative.
A Return to Health
The company finally returned to health by producing modular power enclosures for data centers. Demand increased by 400 percent. Profits and orders came flooding in, attracting the attention of buyer Eaton, a power-management company, that saw an opportunity to acquire the firm and proposed the purchase. The Walkers agreed, but the non-negotiable condition for the $1.7 billion sale was a clause that recompensed the 540 full-time workers with the bonuses that shared in the benefits of the deal.
Even though the workers were familiar with the largesse of the Walker family in taking care of them, most employees reacted in disbelief at the size of the payout. They were shocked by the gesture. When they began receiving envelopes detailing the contents of the deal, many thought it was a prank, not to be taken seriously. Others broke down in tears.
The employees utilized the bonus in various ways. Some bought cars and vacations. Others sought to invest the funds to prepare for the future. The large amount of money helped pay down debt and provide extra security from misfortune. Workers expressed a sigh of relief in these challenging times.
Such an example of loyalty in the Walker firm should be the rule, not the exception. When things operate with a family-like spirit, the class struggle dialectic is transcended, and true peace is brought to society.
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