Good News About Manufacturing in America - From Cleveland!

Good News About Manufacturing in America - From Cleveland!
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What's the hardest part to grasp in the above headline?

Good news about American manufacturing has been awfully scarce on the ground these past few years - and Cleveland is hardly where most people would think to look for an exception.

Try telling that to the roughly 2,500 American employees of Lincoln Electric who each received a share of $ 61 million from the company's annual profit-sharing bonus this afternoon. Each employee received a check for 51 % of his or her base earnings in 2010: the average check was for $24,000. Workers also benefitted from a formal guaranteed employment policy that has meant no layoffs since 1948.

A Fortune 1,000 / Forbes Most Trusted manufacturing multinational, Lincoln Electric has remained the largest producer of electric arc welding technology in the world since the 1930s.

This Rust-Belt company has paid a bonus to workers every year since 1934 - and 2010 was no exception. (In case this needs emphasizing, that means the firm has made a profit for 76 years in a row - through the Great Depression, many wars and now, the Great Recession.)

The company distributes 32 % of gross profits among employees through a performance merit-rating system that has been studied at places like Harvard Business School for many decades.

There's more to Lincoln Electric's success than those big checks, however.

The no-layoff policy is a promise to employees from management that as long as they meet the firm's admittedly-rigorous performance standards, they will never be laid off for lack of work. That promise has never been broken.

Under the terms of the company's formal no-layoff policy, hours were reduced (for some, to a guaranteed minimum of 30 per week), people were re-assigned to different jobs while executive and white-collar salaries were cut. Like many employers, Lincoln offered some senior workers incentives to retire early. But once again this year, no one was laid off, exposing families to the risks of devastating financial and personal ruin.

(True confession time: earlier this year, I published a book about Lincoln Electric's no-layoff policy and the sad addiction so many American CEOs seem to have for laying off workers in tough times.)

More impressive still has been that even as Lincoln Electric has steadily expanded overseas - now with 35 production facilities in 18 countries - the firm has continued to invest in its home base in Cleveland.

In recent weeks, there has been extensive reporting about the steady build-up of cash by many large American corporations who, even as their coffers fill, refuse to hire back workers and are even contemplating more layoffs.

Lincoln Electric has lots of cash, too. Plus leading-edge technology that keeps it out front in a rapidly-expanding and demanding global industry. (Welding? Think pipelines, wind towers, passenger jets and cars.) What it doesn't have is a track record of callously dumping workers out into an economic system which has proven woefully ill-equipped to help those in need through no fault of their own.

And all this in Cleveland, too.

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