Maintaining competitiveness through Employee Ownership in the Forest Products Industry
Overview
There is a growing need to provide stable employment in rural forested regions of the United States. The forest products industry has provided these employment opportunities for many years; however, globalization and foreign competition have disrupted many rural communities. In many cases, mergers and consolidations by large and often foreign owned forest products companies place the interest of the shareholders above the interests of the local community. In Wisconsin alone, 25,000 forest products manufacturing jobs have been lost since 2000. The Employee Stock Ownership Plan (ESOP) offers a more stable alternative. By definition, an ESOP is an employee benefit plan which makes the employees of the company owners of stock in that company. By its design, an ESOP is managed for the long-term sustainability of the company, thereby serving the best interests of its employees. Quick financial gains made to please stockholders at the expense of the long-term company sustainability do not fit within the parameters of the ESOP model. This long-term management philosophy fits well within the forest products industry. Consider the following parallel: long-term sustainable forest management serves the greater good of the forest, while the long-term ESOP management philosophy serves the greater good of its employee owners. In addition to an ESOP’s inherent long-term management philosophy, more tangible benefits such as tax and investment incentives give ESOPs an advantage over other non-employee owned company structures.
Downloadable Manual and Webinar
Employee Ownership: Keeping Wood Manufacturing Local (Webinar in WMV format)
Acknowledgments
The work upon which this publication is based was funded in part through a grant awarded by the Wood Education and Resource Center, Northeastern Area State and Private Forestry, Forest Service, U.S. Department of Agriculture.
Authors
Scott Bowe, Associate Professor, Department of Forest and Wildlife Ecology, University of Wisconsin-Madison
Troy Brown, President, Kretz Lumber Co., Inc., Antigo, WI
Terry Mace, Forest Utilization and Marketing Specialist, Wisconsin Department of Natural Resources, Division of Forestry
Robert Govett, Professor, College of Natural Resources, University of Wisconsin-Stevens Point
Updated: 2009.03.17