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Wednesday, July 28, 2010

Weld Done: Equipment Maker Arcs up its Profits

News OK

In 1895, after John Lincoln was laid off from his manufacturing job, he decided to start his own company. The sting of a layoff hit home.

The company Lincoln founded doesn't do layoffs, no matter how bad things get. Lincoln Electric sometimes cuts hours or salaries or suspends its yearly bonus — which in 2008 was more than $28,000 per employee. But for the past 60 years, the Cleveland, Ohio, company hasn't laid off a worker. The company has existed through many changes in the welding industry, and has seen such innovations as welding gas regulators.

A maker of welding equipment, Lincoln was featured this week in an episode of "Religion & Ethics Newsweekly” on PBS. Lincoln is the worst nightmare of organized labor: It's a non-union manufacturer that doesn't offer paid sick leave, among other atypical practices.

Lincoln is the antithesis of behemoth manufacturers such as General Motors, which have so succumbed to union pressure that they have trouble competing. When GM's Oklahoma City assembly plant was closed, its dislodged workers were basically paid to do nothing for 18 months. Such a notorious "jobs bank” doesn't exist in most of America. It certainly doesn't exist at Lincoln Electric. But then Lincoln doesn't lay off workers, either.

In 1934, in the midst of a depression, Lincoln began a profit-sharing program. The company has been profitable ever since. Last year, Lincoln had to temporarily reduce its work week to 32 hours and cut wages across the board. Ten percent of the work force took an early retirement buyout. But those who stayed helped Lincoln earn yet another annual profit — and employees got yearend bonuses averaging $17,000 each.