The ICA Group Inc.
James D. Megson
20 Park Place, Suite 1127
Boston, Mass. 02116
(617) 338-0010

The red-brick three-story building that houses Market Forge in Everett, Mass., looks pretty much like any other older factory in this industrial town. But a bold yellow sign on the wall just inside the factory's front door makes it clear that this is no ordinary factory. "OWNERS AT WORK," it reads, and this is a statement of literal truth: All 140 employees of this bustling plant that makes commercial kitchen equipment for restaurants -- the union workers, clerical staff and administrators, from the janitor through the president of the company -- own equal shares in 100 percent of its stock.

During the autumn of 1993, the plant's workers and management, with the technical advice of a Boston-based non-profit organization called the ICA Group, bought their own company, a century-old Everett firm, in a complicated deal that made them all partners in an Employee Stock Ownership Plan (ESOP). This is no dreamy commune or hippie-style arrangement in which workers debate each morning and vote on what products they'll make that day, but a hard-headed business arrangement, a unionized plant with professional management -- in fact, President Hal Hamilton and his staff survived the ownership transfer and remain at their posts. The distinction between this and the more customary capitalist arrangement is simply that the stockholders are not distant and anonymous individuals and institutions but the people who work in the plant. This approach, known as the "Mondragon model" after a movement encouraging worker-owned businesses in the Basque region of Spain, is making inroads in America, primarily because of the efforts of the ICA Group, a non-profit organization that "saves and creates jobs through the development of worker-owned and community-based businesses," as its Executive Director Jim Megson says.

Opened as a metal forge in 1898, Market Forge was originally a metal-working forge in Boston's Quincy Market area. It thrived through the World Wars and moved into manufacturing commercial kitchen equipment in the late '40s, Hamilton said. Beatrice Foods Corp. bought the company in 1968, and it continued as a major force in its rather specialized field until 1985, when it fell victim to a typical malady of the times. Market Forge and four other Beatrice subsidiaries were taken over in a leveraged buyout by "Specialty Equipment," a consortium of banks that announced up front that it intended to sell off or close the plant. The business was viable, but "it wasn't in Specialty Equipment's long-range plans," Hamilton said.

The plant's United Steelworkers' union local approached The ICA Group, presenting it with a situation ready-made for its mission: A going concern with a sizable workforce, marked for closing but with the potential of being saved through an ESOP buyout. "It would take years to create that many jobs," ICA's Megson said. "If you can save that many in situ, you've done something remarkable."

Specialty Equipment had given the union 90 days' notice of its plan to close the plant when union President Dave Slaney approached Megson and asked for help. They flew to Chicago the next morning and persuaded the company president to give them four weeks to come up with a preliminary study proving that the buyout could work. That report (with ICA waiving half of its usual $20,000 consulting fee) led to a letter of intent, which began a 2 1/2-year negotiating process involving such threatening shallows and shoals as pension-fund arrangements, disputes over who'd be responsible for health benefits for retirees before the sale, and environmental permissions required for the plant.

On Oct. 31, 1993, however, the deal was done, the sale going through for an undisclosed multi-million dollar price financed by a combination of traditional bank loans and personal sacrifices by the workers, who agreed to take pay cuts to make the transaction work. Market Forge's 140 workers took possession of their own plant. "We've done well," Hamilton said six months later, looking over the plant floor from his pleasant but decidedly not ostentatious office. He declined to disclose specific figures but smiled when he said, "We've become profitable. We're well past the break-even point."

This kind of deal is getting to be routine for ICA Group, a non-profit but thoroughly professional consulting firm that thrives on the kind of plant closings that are commonplace with leveraged buyouts: Sound plants with potential for profit-making success, being closed or sold because they don't fit the short-term profit plans of their new owners.

Funded by a combination of earned income from its fees (which covers about half of its $500,000 annual budget) and grants from foundations and religious institutions, the ICA Group was organized in 1978 by a group of activists, angered by the closing of Youngstown Steel in Ohio, a move that devastated the factory's company town. ICA (originally "Industrial Cooperative Association") was initially an advocacy group with the mission of publicizing the Mondragon model in the United States to encourage the development of worker-owned companies as new industries and buyouts. During the 1980s, it moved into nationwide technical assistance and consulting because its organizers found that publicity alone wasn't enough to make things happen.

In addition to negotiating the Market Forge buyout, ICA has helped hundreds of workers save their jobs -- 600 jobs during 1991 alone -- through employee buyouts and similar creative efforts in situations as diverse as a high-tech maker of optical filters in Vermont; a plastic mold-maker in Massachusetts; a jewelry maker in Oregon; and a new worker-owned company, Valley Care Cooperative, a home health-care agency in Waterbury, Conn.

"The Mondragon model works," Megson says. "We can point to some of these things, show people what's available and say, 'There! Copy this.' We're able to offer people a hopeful message: 'There are some solutions. Some things are working, and here they are, folks.' We want to create jobs for people who don't have them, and we want to save jobs for people on the verge of losing them. If we can save these jobs, these people won't be on welfare."

All the feature stories on @GRASS-ROOTS.ORG's pages are reported and written by Robin Garr, a prize-winning journalist who has visited more than 500 innovative grassroots programs in all 50 states since 1990.

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