THE WEIRTON STEEL THAT WAS AND MAY YET BE
Williams, Mary
The Weirton Steel that Was and May Yet Be AN ESOP FABLE BY MARY WILLIAMS William Johnson was sitting on a metal chair on the bare earth of his yard, watching a team of roofers pound away at...
...Henwood smiled brightly as he talked, and the smile seemed at odds with his misgivings about the ESOP negotiators...
...But on a rainy May day in 1909, thirty-three-year-old Ernest T. Weir stood on a ridge like this one, surveying quite a different view of the valley...
...The answer was obvious: 26,000 people like William Johnson, whose lives are inextricably bound to the mill, who cannot imagine a Weirton without it...
...it said the new employeeowned mill could compete only if everyone took at least a 32 per cent cut in wages and benefits...
...For generations, tamed, bought-out unionism meant wealth to the steelworkers and their community, which did not even bother incorporating until 1947, when it was the largest unincorporated town in the country...
...When the employees buy them out, they usually spring back, sometimes spectacularly...
...It's a pattern of loyalty to the people on top who have provided for the town, and of resistance to anyone who hints there might be another way of doing things...
...We Can Steel the Mai ket...
...That's true even of worndown plants done in by depressed markets or bad management...
...Behind the sweaty bravado, there were signs of doubt...
...Markets for Weirton Steel's sheet products waned with the auto and appliance industries...
...But they do have some convictions about what the new company ought to look like...
...Kenny Henwood, an electrician at the mill, had seen three batches of pink slips handed out that day...
...ESOP is something for a group of people to make a little money on the side...
...magazine, Lamp, the president of Arrow Metal Products Company, one of the first firms to take advantage of the 1974 Federal laws governing ESOPs, said it all only too well...
...And it may be those things one day, but for now, it's only the site of a test, a test of whether worker capitalism can overcome some awesome economic and psychological obstacles, whether people steeped in acquiescence can demand the kind of democratic plan that stands the best chance of success...
...But I had to make a living somehow...
...I've got a wife and kids and a house...
...That says something about the way attitudes have changed, and about the allure worker capitalism has for business...
...They can tell you about the mill," Cheri Robinson said when asked about the ESOP...
...Steel's then-chairman, Edgar Speer...
...ESOPs are not much of a tool for building workplace democracy...
...They shook salt shakers over their glasses and echoed the softballers' disillusionment and distrust...
...In a recent article about ESOPs in Inc...
...They say the people are buying it, but who's running it...
...The deep-rooted skepticism is matched by a deep-rooted passivity, and a despair...
...And what about voting rights: Does each one vote the number of shares he has...
...My boss told them they couldn't dump me because there's no one qualified to do my job," he said...
...They'd hire people and bring them into the company and tell them to find where it could be cut back...
...All you're going to get is ESOPs, so we should work with them and make them democratic...
...If someone needs help, we help them...
...Some 3,000 of Weirton Steel's 11,500 workers were laid off...
...Cove Field is nestled between the Mary H. Weir Public Library, the Thomas E. Millsop Community Center, and a line of railroad tracks where bell-shaped slag ladles go wheeling by...
...I think the ESOP is a cruel joke," he told me later...
...You've got to get burned...
...They have given birth to something called the Weirton Steel Rank and File Committee...
...In steel- and automaking, more than anywhere else, the push is on for innovative labor relations...
...In the third batch, there had been one for him...
...The lawyers, consultants, and others now piecing together the Weirton ESOP, and a genefic officialdom vaguely referred to as "they" fared little better in the ballplayers' estimation...
...A man from management was at the head of the table, a supervisor named Will McKenzie...
...Who would want the mill badly enough to face up to the ever-mounting pension bill...
...But since they are not letting the people know what's going on, you have a widespread distrust of the company and the union...
...negotiations on the terms of the ESOP are still in progress...
...They're nobody," he said, his face suddenly strangely serious, as if this were the most important point he could make...
...The Starlight team lost the game, and a few of the players loitered afterward in the parking lot to have a beer and talk...
...This ESOP is really likely to rip people off unless there is some widespread, public input...
...In answer, Weirton Steel agreed to let the non-CIO union represent the workers...
...First, there's the legal structure of the ESOP...
...Millmen waited in the hills...
...Or should they be able to vote at all...
...You hear stuff like, 'Boy, when we take over the mill, there's three foremen that I want to fire,' " says John Lichtenstein, a graduate student at Yale's School of Organization and Management who has been doing on-the-scene research on the Weirton buy-out...
...With employee ownership being proposed here and there as a building block of economic recovery, it's a good time to examine the concept...
...We pour out our hearts...
...We put in our eight hours...
...People suddenly came to realize that even if the ESOP worked, some of them would still be out of a job...
...You could marry a schoolmate, build a house on one of the heights around town, buy a couple of cars, take regular vacations...
...We haven't got anything to be afraid of now," he said...
...Everybody's in a state of depression and they're going to grab at anything they can get...
...What is the Left to make of Weirton...
...cigar smoke hung in the air...
...They could pick up odd jobs...
...So the vigilantes trooped back into town, where they ferreted out some troublemakers from a hall and lined them up on the sidewalk...
...They were not meant to be...
...An industry-wide strike had been called, and Weirton Steel, a baby among the grown-up producers, said it would go on as always, smoking, rumbling, spitting out steel...
...And many of them have concluded that the chamber of commerce had something when it boasted in brochures that Weirton was a "great cooperative enterprise...
...None of them claims to have all the answers—no one has rushed to enroll in a management course at the nearby community college, for what it might be worth...
...It grew into the Independent Steelworkers Union, a body that exists to this day nowhere but in Weirton...
...The cooperation it would create, the productivity it would encourage, and the sense of participation it would foster, all could unleash a tremendous outpouring of energy and creativity...
...Now that representatives of the union have entered the ESOP negotiations, some workers are warily schooling themselves in their union's none-too-glorious record...
...But over the next months," he says, "characteristically we find growing dissatisfaction, sometimes accompanied by severe conflict...
...I cannot see building a skyscraper 100 per cent out of plastic...
...We go out to the mill...
...the fluorescent lights were harsh...
...National Steel, Weirton's parent company and the nation's fourth-largest producer, might have simply closed the gates at that point...
...You've got to work there...
...Second, they expect immediate changes in shop-floor relations...
...So Weirton grew up hard and sweaty and prosperous, like the other factory towns that line the Ohio River and its tributaries...
...Who would pay up to $1 billion in refitting costs over the next ten years to make the plant pollution-free and competitive...
...Five thousand firms in the United States—from hole-in-the-wall restaurants to Fortune 500 monsters—now have ESOPs in place...
...At the softball diamond, Jack Arango, whose views on wealth and power so closely followed the Rank and File "line," had been angered at the sound of the Committee's name...
...ESOP structures are as many and varied as the firms that set them up, but they fall into two basic types...
...The players were young men, men without much seniority...
...But the group stayed on for hours, sweating, outlining legal options, discussing a democratic ESOP, and dreaming even bigger dreams...
...They were, as Johnson and anyone else will tell you even today, what made money...
...In the first, a firm doles out stock to its employees to reward them, to motivate them, or to hand the whole place over to them when the owner wants out...
...The thing of it is, it's not a laughing joke...
...The Congress of Industrial Organizations—the CIO—offered another way in the 1930s when it tried to organize Weirton Steel...
...He's lying," Arango said...
...And Weirton Steel is a good place to take a look...
...One such outfit is the Industrial Cooperatives Association of Somerville, Massachusetts...
...For better or worse, he said, the tangle of metal below his front door was a home, and a life, to him and 26,000 others in Weirton...
...Should everybody get the same thing...
...To Kelso, it meant diffusing the nation's wealth through the population as a baker might sprinkle raisins in a pudding...
...The steel industry, after all, has more than half its productive capacity in dead storage now, and more than 100,000 steelworkers are out of work...
...he owns a haberdashery on Main Street...
...Up sprang Weirton like the back of a jittery cat...
...underfoot, the weeds were a sickly pale...
...We can just tell you how depressing it is...
...They've watched the petitions and parades go by, and the merchants band together to contribute to the stricken workers...
...That's what they used to call them...
...They've taken our jobs, our unemployment—what are they going to take away now, our birthdays...
...Down Main Street from Cove Field, past the place where the road becomes a bridge over the mill, where, if you are on foot, you can feel hot metal glowing below, is Marino's Cafe, a windowless, reddened, cinderblock hulk, long and low...
...Having the ESOP eventually become majority shareholder doesn't bother me as long as voting rights aren't involved," Lamp told Inc...
...And those now laid off should have recall rights once jobs are open...
...Other towns make other things, but Weirton makes steel Until the mid-1970s, few would have dreamed of an employeeowned steel mill—or an employee-owned anything, for that matter...
...Attempts have been made on two levels, says Lichtenstein...
...But in the past five years, the foundations have started to sag...
...In 1978, when a coalition in Youngstown, Ohio, was trying to buy Youngstown Sheet and Tube's Campbell works from the faroff Lykes conglomerate, their effort was called "nothing short of a communist takeover" by U.S...
...Some companies, sensing trouble, have tinkered with their ESOP structures, trying to make them more democratic...
...Corey Rosen directs the National Center for Employee Ownership, an organization that promotes ESOPs and other forms of worker capitalism...
...The test is dead serious: The future of a town depends on the outcome...
...On a September day in 1919, the Industrial Workers of the World, the Wobblies, challenged Weir's version of the "authoritarian model" and the prosperity it had brought to his young town...
...George Kondik isn't a steelworker...
...He warmed to the conversation, voicing a bluff, workingman's populism...
...Bang, bang, bang...
...But if being "almost a scab" was sickening, Weirton Steel poured on the salves and sweeteners...
...Often, though, he gets neither...
...The security is gone now...
...The plans make business sense for yet another reason: Employee-owned firms tend to do well...
...It's a roundabout way of—it's a shame," he sputtered...
...Most important, though, they believe the employees should have the right to vote on decisions that directly affect their lives...
...But the night I sat in on the Rank and File Committee meeting, these views, which with charity and economy might be pared down to the practical and the pure, seemed just so much armchair political science...
...And they'd do it...
...confided...
...But in Weirton, where the shadow of Ernest T. Weir, "Big Business in person," looms large, the proposition that workers might help manage is strange and threatening...
...What National's doing, they're forcing us to buy our jobs...
...That is unfortunate, though, because workers who buy into their companies often have twin expectations...
...Researchers at the New York State School of Industrial and Labor Relations, working with William Foote Whyte of Cornell University, studied the small percentage of all ESOPs that have taken shape in a climate of threatened plant closings...
...But the experts telling Weirton's steelworkers these things—lawyers, accountants, consultants, and, most important, a 14-member Joint Study Committee guiding the effort—are asking them to go along with the people on top as if nothing had changed...
...The feasibility study that the union helped pay for came out in August...
...Employee ownership offers a new way, really, for the free enterprise system," he says...
...He saw an integrated steel mill, so advanced that one day people would dub it The Mill of the Future...
...He wasn't one to languish in the lower echelons of the world's first billion-dollar trust...
...I think the ESOP committee is just a bunch of professional hatchet men...
...You've got to get hurt...
...Overhead, the sun was a dull ball...
...ESOPs may turn an employee into a capitalist, but nothing about the plans automatically gives the working stiff the rights normally associated with capital ownership...
...They've poked around Main Street beneath the catwalks and the smokestack spires and the giant blackened chessmen of the basic oxygen plant...
...Quit.' I don't have a vote...
...But after three generations of silent compliance, the people don't know what to do with their anger, their newfound distrust...
...It is now up to entrepreneurs and employees...
...Never has a plant as big as Weirton Steel been bought by the people who work for it...
...His friends laughed, and Arango's spirits picked up...
...A study by the University of Michigan's Insti...
...You're the first person to talk about them...
...Best of all, they say, would be a system that would give everybody a single vote, no matter the size of an individual stock holding...
...I'm telling you I'd rather work than loaf...
...They identified about sixty such firms, and found that most of them had prospered under their new owners...
...What mattered was steel...
...They're just saying, 'Give up all your concessions, give up all your wages.' "But what can I do...
...You've got to get crushed...
...Someone had tipped over the fan...
...By year's end, laborers, foremen, machine operators, guards—all may be worker-capitalists, owners of a share in Weirton Steel...
...We're at the foundations, the people of Weirton say...
...On our time off, we spend money...
...There's a lot of signs that a worker-owner is not going to put up with the same shit from a manager that he used to...
...They've watched the people tear down the old "National Pride" bunting and buy their beer in steel cans...
...There's always going to be a need for steel...
...Richard Boulis, president of South Bend Lathe, set the tone of the company's notoriously troubled ESOP early on with a similar comment: "We tell our people that they have all the advantages of ownership without any of the headaches of management...
...But now, National Steel was not only tolerating this "communism"—it had sparked the takeover movement...
...That may or may not happen...
...Didn't you...
...People perched their homes on the hillsides above the smokestacks, watched the housepaint turn red, watched the curtains disintegrate from the fumes...
...Another spoke of staging a conference on steel...
...It is eerie to drive through Weirton, to see the hopeful little green bows attached to posts and trees and car radio aerials and sense what Lichtenstein rightly calls despair...
...They say, 'You don't like it...
...They've seen the handlettered signs playing on the "can" theme: "We Can Do It...
...Blind trust in their leaders' judgment in the past brought them today's massive lay-offs and a stricken mill, they say...
...For one thing, they say, workers at the new Weirton Steel should be represented by a strong, independent, democratic union...
...History books don't talk about Ernest Weir the way they describe the Carnegies and Rockefellers of this world...
...Well, then, sell the mill and unload the pension liability...
...We'd be called back in the spring...
...In the second, known as a leveraged ESOP, an ESOP trust is set up...
...It was a bit sickening to me...
...Even blacks like Johnson, brought to Weirton for the "bull jobs," the worst jobs, didn't complain much when their wooden shoes caught fire on dashes into out-of-service furnaces, or when their teeth rotted from the sour air of the old pickler...
...The Committee is pressing the ISU for data and a chance for all employees to take part in the ESOP negotiations...
...And waited in vain, because the Wobblies thought better of their resolve and never marched...
...One by one, they made the agitators kneel and kiss the American flag...
...Weir, the Pittsburgh-born son of Northern Irish immigrants, had gone to work at fifteen as a three-dollar-a-week errand boy, become the manager of a tin-plate company, and jumped ship when the United States Steel Corporation bought it out...
...With its core of about twenty people, the Rank and File Committee is touchingly small, dwarfed by the enormity of the mill, the union, and the questions it is raising...
...The whole system's going to be the same, but our money's going to be running it, and we're taking the cuts...
...The capitalist revolution...
...Firms the size of AT&T and Pan Am have set up ESOPs, but have given employees only small slivers of equity...
...The disillusionment of workers and the resulting conflicts arise out of a failure of management to recognize that an employee-owned firm cannot be managed by following the authoritarian model...
...Should everyone just get one vote...
...The JSC refused to let anyone go over the calculations justifying the 32 per cent wageand-benefit cut...
...Companies that pass up the chance to make such changes tend to founder when workers start wondering what employee ownership means if it doesn't mean employee control...
...It had been edging away from steel for the previous decade, after all, putting its money instead into aluminum and the acquisition of savings and loan associations...
...Nothing can stop this process except the capitalist revolution...
...We thought we were going to have a good time...
...elsewhere, employees own every last share...
...They didn't put much hope in the company men who had always provided for the town...
...That is the state of West Virginia: coal miners and steel workers...
...You've got all the makings of a participatory venture right here, if employees are involved in setting it up...
...they smiled red-toothed smiles...
...You don't run a mill on blueprints...
...And when the new city was born, its contented citizens promptly elected thencompany president Thomas Millsop mayor by a landslide...
...These guys are telling you they'd rather loaf than work," argued Nick Marinacci, a crane repairman...
...One man said they ought to compile a labor history...
...They drove with headlights in broad daylight...
...Here are the foundations...
...Employee ownership might even be called something of a trend today, and its most common form is the Employee Stock Ownership Plan (ESOP...
...It is a human right, a personal right to manage our workplace and share in the benefits of our work, and this has nothing to do with the ownership of capital or any other right of property...
...To make matters worse, the ISU will not let any of the 3,000 laid-off workers vote on the plan...
...None of this sits well with the Weirton mill hands...
...National doesn't care about us...
...In fact, Weirton provided some real-life settings for a darker film vision—The Deerhunter...
...In the past, you'd always get called back," he said...
...But people here think that by asking questions we're trying to derail the whole thing...
...Others in the Ohio Valley make radios, appliances, glass, ceramics, people will say—but it is here that they make steel...
...Democracy in the workplace is like any other form of democracy," ICA director Steven Dawson told the Association for Workplace Democracy at its annual meeting last spring...
...For now, they could get by, they agreed...
...By seniority...
...So monstrous, so dominant is the plant as it rambles south from Johnson's neighborhood through the town that it's all but impossible to picture this stretch of the Ohio River Valley without it...
...And for all their reservations about the ESOP, most people seem to share that view...
...He was happy too...
...Moreover, Weirton Steel would be the most ambitious ESOP ever tried...
...This is the mill...
...continued trust in the ISU might only perpetuate a failed system...
...Everything has changed for the town...
...And waited...
...enclave of—yes—a kind of homespun socialism...
...And the valley would be called Weirton, Home of the Mighty Tin Can...
...That struck a pattern in Weirton that has held on for sixty-three years...
...If anything could test out the older immigrants' dream of hard work and prosperity, it was steel...
...He wanted to be the kind of man who "typifies to 'the man on the street' Big Business in person," as Business Week would say of him a quarter of a century later...
...Weirton Steel saw to local services...
...He gazed out on the valley, given over then to wheatfields and apple orchards and a sprinkling of houses, and saw land for his own sheet steel mill, land for a new tin works, land even to process the raw materials...
...At first, industry response was chilly...
...While people may be fast losing confidence in the mill town's old-line leadership and the ISU, they are not ready to cede anything to the "dissidents" in their midst...
...But well they might, for his life had the same Markthe-Matchboy plot, and his presence here left the same kind of indelible imprint...
...tute for Social Research found that 73 per cent of ESOP-run companies would never let their employees vote their stock...
...But then Arango turned earnest...
...Some of them involve the transfer of mere token percentages of stock...
...These latter-day Wobblies are going against the very thing that has won generations of prosperity in the valley: faith in management and the union...
...He wanted to climb, to compete, to make his own steel...
...With ESOPs, as with so many of the strategic choices the Left believes the country must soon make, there are a number of credible views...
...Worker capitalism is held out as a cornerstone of Weirton's recovery, but the workers are accepting it sullenly, and only then because they have no choice...
...We worked right through all those other [USW] strikes...
...It's a good question...
...The population of the valley stood at fifty when Weir rattled up in his buggy in 1909, but by 1921 it had vaulted to 19,000...
...These people, they can tell all about how this mill should be run, but it's all blueprints...
...All talk of homespun capitalism aside, ESOPs are not much of a tool for building workplace democracy...
...ICA members ask how, with proponents like these—a conservative Southern Democrat and a lawyer-banker—employee stock ownership could truly serve the interests of the worker-capitalists it seeks to create...
...The Weirton Steel that Was and May Yet Be AN ESOP FABLE BY MARY WILLIAMS William Johnson was sitting on a metal chair on the bare earth of his yard, watching a team of roofers pound away at his small hillside house in the West Virginia panhandle...
...Believe me when I tell you, they're nobody...
...How will the shares be allocated...
...I'm on a week-to-week basis...
...I think they'll cut wherever they want...
...By ignoring that distinction, as ESOP advocates tend to do, he warned, workers would make employee ownership "just a high-risk profit-sharing scheme, just one more shell in corporate America's productivity game...
...What I understand about the Rank and File Committee is they're a bunch of people who don't even work in the mill," said Rudy Nagy in the cafe's comforting gloom...
...They've seen the union devote half a million dollars out of its strike fund to a feasibility study to learn what might still be possible at Weirton Steel...
...It hasn't translated into anyone doing anything, though...
...To one side is a parking lot, to another a weedy vacant lot...
...Already, it has filed suit against the ISU, demanding voting rights for laid-off union members in any ESOP...
...Forty, forty-five thousand...
...The company comes into the loan money through the trust, uses it, and repays the lenders, deducting both the interest and the principal from its tax liability on the strength of favorable new tax laws...
...We all thought it was funny when we first got laid off," remembered Jack Arango, an eighteen-year steelmaker who had worked in the pickler...
...Ordinarily, if a worker-owner dislikes his boss, he doesn't have any more rights than the outside shareholder—unless changes in workplace relations are built into the ESOP...
...Others, like the ICA people, believe tinkering with ESOPs and trying to make them seem democratic only skirts the central issues and extends the life of some of capitalism's core evils...
...Witness Jack Lamp...
...It didn't matter...
...The ISU, whose officers' salaries are paid by the company, hasn't called a strike in all its history...
...Steel had brought the town through the Depression with 1 per cent unemployment...
...I'm one of the guys that said, 'Stick it in your ear,'" he said...
...Their wives worked...
...We'd worked five or six years without getting laid off," Marinacci said...
...The Mighty Tin Can, which accounts for about half of Weirton Steel's production, began to lose ground to aluminum, glass, and plastic containers...
...And if there was a place where it could happen to anyone, it was Weirton...
...Steelworkers swarmed from Italy, from Poland, from Greece...
...If Weirton Can't Do It, Nobody Can/" They cannot have missed the hopeful green ribbon "Go Bows" tied to car antennas and taped to doors and street signs...
...But their unemployment money had run out, and their confidence was flickering...
...All of it came from Weirton Steel, and from agreeing never to strike, never to get out of line...
...To appreciate what that means is to sound out the generations who have been born, schooled, married, and buried here...
...Weirton Steel still overwhelms Main Street today, as it has for generations, and you can still hear it clanging between the storefronts that rim it like a rind of lichen...
...We sort of benefited from their suffering...
...The attitude in the mill was that we were a little bit better than they were because we were using our heads and making more money...
...This closeness, this trust they've had over the years is advantageous, in a way, for setting up an ESOP," Lichtenstein said...
...Workers who buy into their companies are apt to think-mistakenlythey'll get normal ownership rights Second, there s potential tor change on the shop floor," Lichtenstein says...
...Marino's used to be busy all the time, said Hilda Fox, who was filling in behind the bar that day...
...The laws needed to encourage it already exist...
...You get the feeling a lot of people in Weirton would agree with Nagy, Henwood, Marinacci, and Arango if they all came together in the same room to talk...
...First, they count on receiving the usual voting rights of ownership...
...But only a few people actually have come together to pool their energy and frustration...
...It could pay its workers better money than even members of the United Steelworkers union got, and USW members were the best-paid industrial workers in the country...
...We're at the foundations of the economy, Weirton people tell you...
...So journalists have flocked to Weirton...
...They're just cuttin...
...Who would be so desperate to keep it running...
...They want the hard facts on the future of their pensions and why they must take the 32 per cent cut in pay and benefits...
...Such compromising sentiments bear out ICA's claim that the ESOP is a conservative device...
...By 1981, Weirton Steel's profit margin was a rickety 1 per cent, compared with about 3 per cent for the steel industry as a whole...
...Either starve or eat, that's what they're asking...
...Everybody figured this was just a big slowdown...
...In the bleachers behind third base, the wives and girlfriends of softball players from the Starlight Bar and the Cove Club watched their men run and pitch and slide...
...Fire, acid, smoke, blood—these were what it took to make Weirton Steel, everyone agreed...
...I'm a firm believer that steel is second to none," he says nonetheless...
...But who, in 1982, would sink anything like the mill's $370 million book value into a dying industry...
...By 1980, that was what the average steelworker made in Weirton...
...So Weir was buying sheet steel, dunking it in tin, competing with Leviathan, and looking for a place to spread out...
...Business people of all stripes—yes, even head cheerleader Ronald Reagan—have had kind words for them...
...Life in Weirton was pleasant, in spite of the mill's endless thunder and the stinging specks of graphite that glittered in the air like snowflakes...
...It was Weirton Steel, the gritty, hissing mill that had put his two children through college, paid his bills for forty years, and now let him put a new roof on the house...
...And the potential to make those changes is there...
...The Wobblies let it be known they would march across the river from Ohio, in protest...
...Kelso's "revolution" found favor with Louisiana Senator Russell Long, who has since pushed laws favoring ESOPs through Congress...
...If you had a relative at the mill, you could probably hire on too...
...The company would deliver steel even when a USW strike paralyzed the rest of the country, so it got a higher price for its output...
...It borrows money and buys some or all of the company's stock for the employees...
...Their years in the mill had earned them pensions that would total $770 million if the plant closed, and National had only $350 million in reserve to meet its obligation...
...I never liked it around here," Johnson Mary Williams, a contributing editor of The Progressive, is studying economics at Columbia University's Graduate School of Business during the 1982-1983 academic year as a Bagehot Fellow...
...He looked around the circle of men and was rewarded with nods of agreement...
...On the basis of compensation...
...It was deer season...
...They just care about how much money they can make for themselves...
...And the Weirton mill, while one of the nation's best outfitted, could not meet Federal clean-air standards without costly modifications...
...It's a potentially explosive situation...
...Immediacy—a sense of the imminence of risk and pain—was paramount...
...We're pariahs here because we're demanding accountability, we're demanding information, we're demanding answers in a town where nobody's ever had to give any," he said...
...Across the street, behind a fence topped with barbed wire, is Weirton Steel...
...On March 2, National Steel broke the news: If the workers wanted to keep the show going, they would have to buy the mill themselves...
...The authoritarian model, he notes, is one that "assumes that thinking will be done by management and that workers serve the organization best when they simply do what they are told...
...It's as if the throb of the mills were the pulse of the country...
...Some say, You're never going to achieve a one-share/one-vote nation of co-ops...
...Weirton is supposed to be a lot of things—the coming enclave of homespun socialism, the little town pulling itself up by its bootstraps, an Eden in the midst of the depressed industrial Midwest...
...In 1958, Kelso was co-author of a book called The Capitalist Manifesto, which argued that "socialism in a variety of ways is coming in by the back door...
...The group was meeting one August evening in the small steambath of a library at the regional Legal Services office...
...None of this surprises John Lichtenstein, who has been working with the Committee...
...That kind of talk is considered about as tactful in Weirton as a dirty joke at Jerry Falwell's church...
...Armed guards took posts on the bridge at the West Virginia side...
...Nothing in an ESOP changes the usual system where shareholders vote in a chief executive officer and the corporate leaders, who then hire the management...
...Never before has a society marched more joyously into ambush," he warned...
...Desperate communities and workers pushed for employee ownership plans, which had been encouraged by Federal enabling legislation passed in 1974...
...I hated it when they came and said, 'You're laid off.' " His friends laughed at him, and he gestured back at them...
...They were people who asked few questions as a rule, who clung instead to a belief in hard work and benevolent management...
...The good life has run out, and all the new ESOP can offer in its place is a job—at drastically reduced pay and benefits levels, in a mill that needs immediate, vast capital improvement, in a market bedeviled by tough competition from abroad...
...Steelworkers are good people," says a preacher-turned-millman over a beer in a local club...
...High wages, good municipal management, and, most important, job security—it was all there in Weirton...
...So they put a hold on me...
...As soon as they get another electrician from another department who can handle my job, I'll be laid off...
...I think it sounds too good to be true," Arango said...
...We're almost like scabs," admits Tony Gilliam, a laborer with twelve years in the mill...
...They can't do anything worse to us...
...Cornell's William Whyte has found that "an atmosphere of euphoria" prevails in the early months when ownership first changes hands...
...That began to change in the 1970s, though, when conglomerates started peeling off marginal firms they had acquired in the merger craze of the 1960s...
...People would say, 'Let them stupid people go out on strike—we'll get everything they do anyway.' We were capitalizing on their suffering and criticizing them while we were doing it...
...Worker-owned companies were not unknown, but they were small for the most part, and counted for little...
...It stinks...
...ICA helps employee groups set up worker-owned, cooperative businesses, and its members think ESOPs are a warped caricature of the goals they promote...
...The plans soon became the preferred method of arranging employee purchases of imperiled plants...
...But I hated it...
...The drive flopped, and the National Labor Relations Board accused management of running a secret police force, setting up a phony union, and bribing, intimidating, and spying on the workers...
...Giving people shares in the companies they worked for was one way to carry it out...
...This means letting them vote their stock in the reconstituted company, whether they own it directly or through a trust...
...Call it homespun socialism, call it worker capitalism—whatever you call it, groups that promote workplace democracy are leery about what's happening in Weirton today...
...Coal trucks howl through town, and you can hear the pride in voices when talk is about the mill...
...ESOPs may strike the likes of Edgar Speer as a mechanism for worker revolution, but in fact, the tax code makes them a sound bet for management as well...
...The land was steeply pitched, and it fell away from his place to an expanse of blackened towers, catwalks, and smokestacks topped with flames...
...Weirton "seems part of a peculiarly American myth—a movie like Frank Capra's It's a Wonderful Life springs to mind," The New York Times has reported...
...But now, just a few knots of beer drinkers were inside...
...But most important, the very stability of the Weirton workforce weighed against a shut-down...
...This suggests that if Weirton Steel's experiment in worker capitalism is to succeed, it had better be an experiment in worker democracy as well...
...Consider the ESOP's origins, they say...
...One might expect him to receive a corresponding say in shopfloor decisions, or at least the right to vote his stock...
...It's a presence felt all the more sharply today, because the people of Weirton are spinning a Mark-the-Matchboy tale of their own...
...San Francisco investment banking lawyer Louis Kelso is generally credited with getting the ESOP idea down on paper...
...The Mill of the Future is forging what some partisan observers call the labor relations scheme of the future: worker ownership, on the largest scale ever tried in this country...
...If the employee buy-out succeeds, Time magazine has predicted, Weirton would be transformed into "the principal U.S...
...And it is set even farther back by Weirton's own history...
...virtually all of them were laid off...
...The local paper responded to the Rank and File Committee's demands with an editorial headlined, "Rank and File Group Could Harm Negotiations...
...The size of the workforce would have to be trimmed, too...
...In walked Rudy Nagy, pretending to stagger to get a laugh...
...The plant had become the biggest single employer and taxpayer in the state...
Vol. 46 • November 1982 • No. 11
