A STEELWORKER SOLUTION

...the announcement came on March 2, 1993, that the Sharpsville plant would close in three days...

...Unfortunately, all of the loans were contingent on a solid business plan which called for $5 million to $6 million...

...I was skeptical about getting the loans," says thirty-two-year-old Mike Zomparelli, "but I knew it wouid all work out...

...We just knew that we would do whatever it takes...

...Their commitment had brought ownership of the plant and control over their jobs back into the community...

...The buyout committee still needed to find $4 million to $5 million...

...By then, Swogger had become president of the USWA local...

...While the sit-in created a willing seller, it did more than just change the minds of bankers and businessmen in Pittsburgh: It solidified the commitment and solidarity of the employees...

...Since 1907, the Sharpsville ingot-mold foundry of Shenango, Inc., had been a stable employer...

...lacking cash for capital improvements, the Sharpsville plant, too, seemed likely to close...

...Under the pressure of the sit-in, publicity, and an argument that their creditors were getting ripped off, the Shenango Group and Mellon Bank agreed to meet with the buyout committee...

...They turned the shutdown into a new beginning...

...And once again, the community turned out on a cold winter day—this time to celebrate as a bottle of champagne smashed onto the first mold shipped...

...If you want good fishing, stay on the lake...

...Disbelief and anger prevailed...

...For example, the workers' compensation committee drastically reduced the number of claims by putting people back to work on light duty and getting rid of frivolous claims...

...But what sort of new beginning is this...

...The family feeling was fostered by the Snyders, the local civic-minded owners...

...it was not being there for him that was the hardest...

...Jeff Burns, now a crane operator, remembers, "I had finally landed a job in a crane that I liked, and then they closed the place down...

...Requests for more concessions quickly followed the bankruptcy filing...

...On April 15, a letter of intent was signed...

...There was no willing seller, the market for ingot-molds was declining, and the new firm was an unlikely candidate for financing...

...People were scared and angry, he says, but "if people see that they can do [the buyout], they can do more and go on to bigger projects...

...But huge barriers remained...

...Everyone on the buyout committee gave up a lot to make the deal happen...

...When William Snyder II retired, the plant was purchased through a leveraged buyout and became part of Shenango Group, Inc...

...Many of their fathers had worked in the plant before them, and the foundry workers had grown up together...

...Fuller and Swogger led the charge, backed up by many of the steel workers, who suddenly became public speakers and fundraisers...

...The employee buyout began in those cold days of March 1993...

...Like a giant gift for the Shenango Valley, the new beginning promised by the buyout committee became a reality...

...Frequent visits from their families helped bind the steel workers together...

...The workers had done it...

...The valley obviously needs life and it can come together...

...Most business analysts would surely rank it as a poor investment...

...To Swogger, the bottom line was: "Our kids should not have to leave Sharpsville to find jobs...

...It was close-knit, like family...

...If your own family wasn't inspiration enough to do whatever it took, the other workers' families were...

...So the steel workers of Sharpsville's local decided it was time to reclaim their plant and community...

...Even after the Snyders moved out of Sharpsville, they continued to maintain the football field...

...Next to the Commitment sign is a handwritten essay titled "My Hero," by Swogger's son...

...On November 11,1993, the bankruptcy judge approved the sale of the Sharpsville Shenango plant to the new company, Sharpsville Quality Products...

...The community support and the ANB Trust were vital to the buyout effort...

...Day after day, they learned how much they all had to lose...

...These guys went to school together, they grew up together...

...We tried all we could, but it wasn't enough," says Swogger...

...The public sector came up with grants and loans enough to meet the purchase price of $1.28 million...

...Tom Croft and Joe Bute of the SVA staff visited the sit-in and were impressed by the workers' enthusiasm...

...The information they gathered would be crucial to their buyout effort three years later...

...In the 1980s, the leveraged-buyout craze reached beyond Wall Street to smalltown America...

...Similarly, Jeff Burns says, "I haven't been there for [my youngest son]," adding, with a wince, "and it hurts...

...As Swogger had said ten months before, "If you do what's right and you do what's in your heart, never quit, and persevere, Shenango is gonna be running again...

...Like so many other shutdowns, the impact of the closing went far beyond the unemployed workers...

...To some Shenango employees, this was the final straw...

...First, the parent company pursued increased market share by cutting prices and purchasing other ingot-mold foundries...

...The SVA staff helped the buyout committee locate and make use of state programs...

...By summer's end, though, Burns's fishing boat had still not hit the lake, and Swogger's new job as vice president of operations was taking almost as much time as the buyout...

...It was your kids' future...

...It's tough swimming upstream," remarks long-time Shenango employee Vic DiGiacamo about the buyout, "but the salmon have been doing it for years...

...A Rally for the Valley brought out thousands of people, demonstrating support for the sit-in despite the cold weather...

...and Ronald Anderson, an acquaintance of Swogger's who had read the extensive news reports, offered to help...

...At the time of the buyout, most of the 300 local employees were represented by the United Steel Workers of America...

...It wasn't the financial instability...

...So, taking a page from American labor history, the local staged a sit-in and organized community rallies at the plant gates...

...Even with the ANB's $250,000 behind them, financing was still very questionable...

...To Jeff, his greatest accomplishment is not the buyout...

...But he has spent more time recently with the buyout than with his family...

...He saw the buyout effort as an opportunity for social, economic, and spiritual renewal...

...These funds would sustain the buyout committee over the long haul to reopen the plant...

...But the valley is also home to small, quiet, middle-class towns where most citizens aspire to a simple life: raising a family, holding down a good job, and the occasional chance to hook and land some of those famous crappies...

...But if you want to see a community that took control of its future, go about six miles south of the lake, past well-kept homes, green lawns, churches, and sweet-corn stands, to Sharpsville, Pennsylvania...

...Their children were taught by the same grade-school teachers who had taught them, and both generations played street football and little-league baseball together...

...But in the late 1980s, the steel industry turned around, and the Shenango Group began making money, precipitating two crucial changes...

...Bute rated them "a ten on the motivational Richter scale...

...The steel workers thought of an employee buyout...

...But with single-minded determination, the union local and the Sharpsville community began the long struggle to finance the deal...

...Sustained by the support of their community and families, eating donated pizza and discussing ways to make the new company successful, the workers steadfastly remained...

...Employee participation, concessions, and the union's creative money-saving ideas were not enough...

...The community rallied around the workers' efforts and together they resurrected Sharpsville Quality Products from the ruins of bankruptcy...

...The final deal included financing from fourteen separate entities...

...Art Fuller, pastor of the First Baptist Church, had been looking for a way to instill hope in the "whole atmosphere of decline" in the valley...

...What makes the Sharpsville story different is that the workers used every tool they could, including a forty-two-day plant occupation, to save their livelihoods...

...it's being the hero of his thirteen-year-old son...

...It sucked Sharpsville's largest employer into its vortex, choked it of capital investment, and then shut it down...

...Wide publicity attracted two important new allies for the buyout group...

...Commitment, says a big sheet of paper taped to the wall behind Swogger's desk, is what transforms promises into reality...

...In addition, Bute says, "We were most impressed by the degree to which they had thought about their business in practical terms, and how they would be able to turn a profit...

...Speaking of his early days as a laborer there, Jeff Burns says, "It was a good place to work—good money, good benefits, and a good bunch of guys to work with...

...Still short of cash, the buyout committee sought three separate employee-stock-ownership-plan loans, a line of credit, equity investments, and bridge financing from an equity investor who was impressed by the the community's and the employees' efforts...

...The Sharpsville foundry, however, remained competitive, thanks to labor-management participation and shop-floor cost committees...

...Second, management at the Sharpsville facility embraced the new trend of employee participation, which allowed shop steward Jeff Swogger and his co-workers to learn the business...

...With their first victory behind them, the steel workers moved on to the next obstacle, confident they would find a way over, under, or around...

...it was one more economic blow to the struggling Shenango Valley, and it tore at the community...

...The Steel Valley Authority (SVA), a Pittsburgh-area labor-community development agency, got involved with the buyout effort...

...Undaunted, the steel workers dove in, determined to do "whatever it takes" to make the buyout happen...

...Gradually, the steel workers' local found itself leading a valley-wide movement of faith and determination...

...Within a few months, the community, local churches, and the steel workers had pledged more than a quarter of a million dollars to the ANB trust...

...On February 9, 1994, less than a year after beginning their sit-in, the employee-owners of Sharpsville Quality Products poured their first ingot-mold...

...It was not just your job on the line here, it was your lifestyle— the lifestyle handed down by your parents...

...Sparks flew like long-overdue fireworks as the molten steel flowed...

...They had done their best to make the plant profitable for the owners...

...On Christmas Eve, 1993, the deal was complete...

...To give the community a chance to help out, Fuller, other local ministers, and Swogger decided to set up the ANB— which stands for "A New Beginning"—to collect contributions and loans from the community to help the buyout effort...

...Shenango's debt load and the 1990 industry downturn led to the closing of many plants...

...Company officials said the give-backs would keep the plant open during the corporate reorganization...

...The Snyders provided new goalposts for the high-school football field, in an area where the sport is almost a religion...

...The employees own 53 percent of the company, but the company is in a declining market...

...With the promising results of the study in hand, Swogger, Anderson, and the SVA began arranging the public, commercial, and private financing...

...According to Trailer Life magazine, "If you're interested in bragging-size crappies, Shenango is the place to go...

...For forty-two days, through the blizzard of 1993, the employees occupied the plant...

...The goal was to stop the removal of equipment and to force the Shenango Group, its bank, its secured creditors, and the bankruptcy court to take the employee buyout seriously...

...Negotiations followed...

...Ronald Anderson, who was experienced in turnaround situations, offered his assistance, and the steel workers' international union financed a feasibility study...

...The sit-in became a focal point for the community, which had lost more than 10,000 industrial jobs in the previous decade...

...These additional concessions were granted despite the fact that give-backs amounting to $11 per hour had been granted in the previous year, according to Swogger...

...While union leaders in many communities would have prepared to fight for severance pay, the leadership of this union local sought alternatives to a shutdown...

...There was no hope in the community...

...Even these concessions were not enough...

...But first the local leadership understood that if the machinery was moved out, there would be nothing left to buy...

...It took visits to five lawyers, but Swogger and Fuller finally found one who would set up the trust...

...No one was doing anything with young people," Fuller says...

...They figured the new owners would scrap the plant for cash and leave the hard-hit community with yet another wound to lick...

...As the plant started up again, both Burns and Swogger said they hoped to spend more time with their families...

...Mel Jordan, whose father and two sons had worked at the plant, summed it up: "We just believed...

...If the determination demonstrated in the buyout continues, however, Sharpsville Quality Products will achieve economic stability, and the employee owners will once again have the chance to work hard, enjoy their own homes and families, and go fishing on the nearby lake.B Stephen Clifford is technical assistance coordinator for the Northeast Ohio Employee Ownership Center at Kent State University...

...The Sharpsville workers were not surprised when Shenango Group filed for Chapter 11 bankruptcy protection on December 14,1992...

...Shenango agreed to sell to the employees, ending the sit-in...

...Maybe they ought to close the whole damn thing down and let the guys get on with their lives," said one fifty-nine-year-old employee...

...A STEELWORKER Solution When all else failed they bought the shop BY STEPHEN CLIFFORD The Shenango Valley, which hugs the border between Ohio and Pennsylvania, is perhaps most famous for Shenango Lake...