Case study: Central States Manufacturing, Inc

• Published in: Journal of participation and employee ownership (Online) Vol. 4; no. 2; pp. 190 - 193
• Main Author: Scharf, Adria L
• Format: Journal Article
• Language: English
• Published: Bingley Emerald Group Publishing Limited 26.11.2021
• Subjects: Case studies; Chief executive officers; Compound interest; Design; Employee ownership; Employee stock ownership plans; ESOP; Liquidity; Manufacturing; Retirement; Wages & salaries; Workers; United States > US
• ISSN: 2514-7641; 2514-765X
• DOI: 10.1108/JPEO-09-2021-0012

Purpose>This case study examines employee share ownership at Central States Manufacturing, where the employee stock ownership plan (ESOP) shares stunning sums of wealth with employees. Central States designs its ESOP to allow participants to access a portion of their ownership wealth while they are still employed at the company, through hardship and in-service withdrawals. This may make the “wealth benefit” of employee ownership more meaningful to lower-wage workers navigating economic challenges. The case study adds to the discussion about how employee ownership can benefit low- and moderate-wage workers and close the wealth gap.Design/methodology/approach>Data were collected via: (1) published accounts, (2) structured qualitative interview with the chief financial officer (CFO), (3) follow-up emails and phone communication with company contact and (4) review of plan document language.Findings>Workers at Central States Manufacturing – including truck drivers and production workers – build large sums of wealth through the ESOP. Central States innovates in its ESOP by permitting workers to access a portion of their ownership wealth while they are still working through hardship and service withdrawals.Research limitations/implications>This is a mini-case study heavily reliant on the information provided by the CFO, in combination with background publications, and plan document language. It does not include employee interviews.Originality/value>This paper lifts up an innovative company whose success and innovative ESOP plan design benefit frontline workers.