Battalion/Page 11
February 25, 1982
national
Rath employee ownership saves company
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United Press International
WATERLOO, Iowa — When
(Rath Packing Co. officials
[pleaded for voluntary worker
[pay cuts in 1979, Lyle Taylor
[foresaw giving up his benefits
[only to be abandoned when the
[meat packing plant closed soon
lafterward.
But as president of the Un-
[ited Food and Commercial
[Workers Union Local 46, Taylor
■vowed his workers would not be
lexploited — even if they had to
[take over the company to save
[their jobs.
Taylor now presides over ab-
lout 2,000 stockholding em-
[ployees. They are happy — for
[the most part — with the com-
Ipany that once lost $22 million
in five years. Although not out
■of the woods yet, Rath has be-
Icome a team effort from its em-
Iployee owners to the Waterloo
■community that is helping sup
port it.
Rath workers, including
12,000 at the Waterloo plant and
11,000 in four other states, have
lagreed to each take 10 shares of
■common stock f rom a pool that
■had never been issued in ex-
thaiige for $20 from their week-
iy paychecks. By the end of this
■year, workers will own 1.8 mil
lion shares, with the remaining
1.2 million shares held by 3,000
private stockholders.
In addition to the stock pur
chase, Taylor said, employees
agreed to defer pay increases
and other benefits such as vaca
tion and sick pay, choosing to
put the money in the special
account that helps secure $7 mil
lion in federal loans and grants
that were used for badly needed
renovations on the aging meat
packing plant.
Rath workers, includ
ing 2,000 at the Water
loo plant ad 1,000 in
four other states, have
agreed to each take 10
shares of common stock
from a pool that had
never been issued in ex
change for $20 from
their weekly paychecks.
“They needed matching
funds to secure the federal
money,” he said. “No bank
would loan Rath any money so
we agreed to defer certain be
nefits into an account that would
be the matching money to reno
vate this plant. It isn’t just giving
up benefits.
“The study made when they
got the federal money predicted
we would lose money five years
in a row. It predicted five years
of losses and five years we
couldn’t pay the pension fund.
“But in the first year, we made
the pension payment and also
made some money. Last year, we
lost money, but we made a par
tial payment —$2.6 million — to
the pension fund. As far as we’re
concerned, we’re ahead of sche
dule. We’re satisfied.”
Black Hawk County Super
visor Lynn Cutler, whose econo
mic development committee
helped obtain a $3 million feder
al grant for Rath, said the
Waterloo plant is a “terrific ex
periment” in employee own
ership.
“It’s been an overall effort,”
she said. “It wasn’t just business
as usual. It was to make some
substantive changes in the way
things are done.”
Taylor said the employee
takeover provided side benefits.
He said the workers now own
stock, control 10 of the 16 seats
on the board of directors, have
two people on the executive
committee, have a profit-
en and ox4
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flitJ Come see us at the PLANT WALK at the
‘MSC All Night Fair” Friday, Feb. 26.
said. "Tfc
romthew!
ell is dead,
is of the
'iciently to*{
o the surfe;
officials, #
ters from If
t Houston,f
g, thenpmtT
? well tote
said.
: of the blot
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pparentl) 1 '
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David Buckland
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vidends.
“We changed some
managers’ philosophies
on the way of doing
business, They were
running from day to
day instead of doing fu
ture planning. In fact,
when we took this over,
there was no future
planning. ” — Lyle
Taylor, president of
United Food and Com
mercial Workers Union
Local 46.
The meat packing company
appears to be doing better
under its employee owners.
3
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Celebrando
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Although the industry is seeing
tough times that dealt another
deficit year to Rath in 1981, the
company has increased produc
tivity. It is grabbing a larger
market share.
“Before the takeover, we were
down to nine ba<^on lines,”
Taylor said. “Now we have 11 on
days and five on nights. That’s
about a 50 percent increase in
production.”
In the hog slaughtering
room, he said, workers are fell
ing about 860 hogs an hour,
compared with 550 before the
takeover. Overall, sales have
risen from $316 million in 1979
to $465 million in 1981.
Compahy president and chief
executive Herbert S. Epstein has
control over the daily opera
tions. But Taylor said the work
ers have much more input into
company decisions through an
employee communications sys
tem and the worker-controlled
board members. Special meet
ings also are held on a regular
■ *.
X
X
basis to inform the workers of
company decisions and out
looks.
“Because of employee own
ership, the feeling they’re part
of the company, I think that’s
been the whole key to it,” Taylor
said.
Some major changes that
have taken place since the
takeover include the firing of
then-President and chief execu
tive Emmet McGuire, who was
replaced by Epstein, and a tur
nabout in some company poli
cies.
“We changed some managers’
philosophies on the way of
doing business,” Taylor said.
“They were running from day to
day instead of doing future
planning. In fact, when we took
this over, there was no future
planning.”
Taylor is convinced the com
pany can succeed if the meat
packing industry itself doesn’t
collapse. With today’s recession,
he said the meat packing plants
are squeezed by both sides. Far
mers are raising fewer hogs,
which means higher prices for
Rath to buy the animals, and
consumers are cutting back,
which means Rath has to cut
prices to sell its product.
“A lot of it depends on the
economy,” Taylor said.
Supervisor Cutler said the
continuation of the business
saved the government from
paying out $31 million in unem
ployment benefits in the first
year .
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