The employee-ownership plan didn't work with Sheet & amp; Tube, but publicity helped promote the idea, the speaker said.
AKRON -- A Maryland economist says an unsuccessful 1970s-era effort to revive the old Sheet & amp; Tube steel mill with an employee buyout had an unexpected benefit -- it introduced the world to the employee-ownership concept.
"The people of Youngstown deserve the credit for putting the idea of employee ownership on the map," said Gar Alperovitz, a University of Maryland professor and a featured speaker at the 16th annual Ohio Employee Ownership Conference in Akron on Friday.
Had role in plan: Alperovitz was heading up a Washington, D.C., think tank in the 1970s when the Mahoning Valley's once-thriving steel industry started to crumble, leaving thousands jobless. He was asked to work with the United Steelworkers of America, Youngstown political leaders and an ecumenical coalition to look for ways to save the steel mills.
The group devised a joint community-employee ownership plan for the massive Youngstown Sheet & amp; Tube, a novel idea at the time. Alperovitz said the state and federal governments were supportive, and the Carter administration pledged $200 million in loan guarantees.
"It was a viable, professionally done plan; it would have put that mill on the cutting edge by using the skilled, experienced work force and updating with modern machinery," he recalled, "but it was sabotaged behind the scenes."
What went wrong: He said other large steel companies opposed the buyout. The plan fell apart when the Carter administration withdrew its loan guarantees in 1978.
"It was a disappointment and a tragedy," he said.
There were only about 200 employee-owned companies at that time, he said, but the national publicity surrounding the Youngstown buyout effort gave the concept a boost. Now there are thousands of employee-owned companies in the United States, he said, including 425 in Ohio.