Gillibrand Celebrates Ward Lumber’s Transition To A Worker-Owned Cooperative At ‘Board’ Cutting Ceremony; Gillibrand’s Main Street Employee Ownership Act Was Instrumental In Ward Lumber’s Ownership Transition
Ward Lumber Employee Ownership Will Preserve 50+ Jobs And Generate $15 Million In Annual Sales
Today, U.S. Senator Kirsten Gillibrand joined Ward Lumber to celebrate their successful transition to a Worker-Owned Cooperative. This transition was inspired by Senator Gillibrand’s Main Street Employee Ownership Act and will preserve over fifty jobs and generate $15 million in annual sales for Ward Lumber. The bipartisan Main Street Employee Ownership Act, became law in 2018, supports small businesses that invest in their workers and transition to an Employee Stock Ownership Plan (ESOP) or a cooperative (co-op). While the Small Business Administration (SBA) was primed to lead this federal effort, they needed new authority and tools to achieve the goal of supporting employee ownership. This vital new law improved the Small Business Administration’s (SBA) ability to help small businesses transition to employee ownership by increasing their access to capital and technical assistance. Employee ownership supports New York State’s local economies by keeping jobs local and businesses, many of which have been built over generations, in the hands of surrounding communities.
“No one has more insight or more dedication to a company than the people who work there. I applaud Jay Ward and the Ward Lumber team for securing their future through employee ownership, and ANCA for their excellent work supporting innovative economic development,” said Senator Gillibrand. “The Main Street Employee Ownership Act rewards workers and communities for transitioning to employee ownership – and we’ve seen it work firsthand right here with Ward Lumber. Employee-owned businesses help workers share in the success of their employer and have a strong track record of keeping jobs local and producing better pay and retirement benefits. I am proud to have passed this bipartisan legislation that is producing results for New York’s workforce and for workers across the country.”
“Ward Lumber is a 130 year old 4th generation company and I didn’t want to see our business end. We have 50 wonderful men and women I wanted to honor and continue this business for them. We need Ward Lumber to continue to serve our community,” said Ward Lumber CEO Jay Ward.
“We’re so pleased for all of Ward Lumber’s new worker-owners,” said Dani Delaini, leader of the Adirondack North Country Association’s Center for Businesses in Transition. “They are leading the way to what we hope are many more worker-owned cooperatives in the North Country.”
There are more than 2.3 million companies, employing one in six workers nationwide, with owners who are at or near retirement. This includes an estimated 181,370 businesses in New York, which employ 1.6 million workers. As these business owners retire, local economies will experience a massive shift that could trigger the closure of small businesses and loss of jobs and investment. This offers a unique opportunity to strengthen small businesses, reward workers, and invest in our Main Street economy by helping these companies transfer ownership to employees.
ESOPs and co-ops have demonstrated that employee ownership is good for businesses, workers, and the local economy. Companies that transition to employee ownership see an increase in productivity by 4 to 5 percent the year that the businesses become employee-owned. Employee ownership also rewards workers, paying 5 to 12 percent more and providing workers with 2.2 times more in retirement savings, as well as greater job stability. Furthermore, employee ownership helps prevent layoffs and creates locally rooted jobs. ESOPs are less likely than comparable businesses to lay off workers in economic downturns, and employee-owned companies are less likely to go bankrupt and tend to stay in business longer. Main Street Employee Ownership gave the SBA new authority to help small businesses transition to employee ownership by doing the following:
- Updated the agency’s lending practices to better serve employee-owned businesses;
- Facilitated SBA lending to cooperative businesses;
- Empowered the SBA to assist small business owners in converting their companies to employee ownership
Ward Lumber has been operating since 1890 and is owned by four generations of the Ward family. Ward Lumber’s journey to employee ownership began in May 2018 when Senator Gillibrand met with local business owners and economic development leaders at a local event hosted by the Adirondack North Country Association (ANCA) to discuss the benefits of the Main Street Employee Ownership Act. This historic transaction marks the first employee ownership transition of its kind in the North Country region of New York State. With locations in both Jay and Malone, N.Y., the employees of Ward Lumber made history by purchasing the 130-year-old business, which will preserve over fifty jobs and generate $15 million in annual sales.
Following Senator Gillibrand’s push, the bipartisan Main Street Employee Ownership Act was included as a provision in the FY 2019 National Defense Authorization Act (NDAA). The House companion to Gillibrand’s legislation, introduced by U.S. Representative Nydia M. Velázquez, was also included as part of the House-passed version of the NDAA bill in 2018.
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