The challenge

In past decades, the nation’s traditional industries suffered widespread layoffs and plant shutdowns, particularly in such Rust Belt industrial states as Michigan, Illinois, and Ohio. In the new global economy, corporations are shifting jobs and investment to regions of the world with lower labor costs. The result: As the low-wage service sector grows here in America, workers are losing unionized manufacturing jobs that pay a living wage and benefits.


Seeds of commitment

While attending the University of Texas and later earning his Ph.D. in political science from Princeton University, John Logue studied abroad in Mexico, Denmark, and Germany. He was particularly impressed with the worker-owned and democratically operated Mondragón cooperatives of the Basque region in Spain. With dozens of plants under its control, the Mondragón Co-operative Corporation is, in sales volume and number of workers, the largest business corporation in its region, and the eighth largest in Spain. Several years later, Logue observed similar cooperatives and employee-owned enterprises in Quebec, Canada. Studying these models built his belief that democratically operated companies outperform autocratic companies, just as democratic countries outperform autocratic ones.

Logue’s direct inspiration for starting the Ohio Employee Ownership Center in 1987 came from his involvement in the Ecumenical Coalition, a labor-community-church group that earned its reputation for helping to stop the Youngstown, Ohio, steel shutdowns of the late 1970s and early 1980s. While teaching at Kent State University, Logue researched methods for achieving successful employee ownership. His subsequent essay, “Toward a Model State Program to Encourage Employee Ownership,” in 1986 became the Center’s road map.


Accomplishments

Logue, a professor of political science at Kent State, directs OEOC. Assisted by a small staff, he works to increase the number of employee-owned and run companies and to help their employees build personal assets. When a company considers shutting down an Ohio facility, for example, OEOC shows its owners and workers how employee ownership can save their livelihoods; the group also helps secure funding for purchase. Then, after plants make the transition to employee ownership, OEOC provides ongoing support
to worker-owners through education, connections to consultants, and help organizing democratic structures for decision-making and communication.

In all, OEOC provides 4,000 hours of leadership training per year. Since 1987, the group has helped 438 Ohio companies and plants, employing more than 83,000 people, explore the possibility of employee ownership. Of these, 64 have implemented partial or complete employee ownership plans.

Without the shift to employee ownership, thousands of workers in these companies would have lost jobs to plant shutdowns or corporate downsizing. Instead, the new approach has created 12,825 new business owners—individuals who now share an investment in, and profits from, collectively-owned companies. Approximately a half-billion dollars in assets has resulted, according to Logue. And, since OEOC began its campaign, no employee-owned company in Ohio has pulled up stakes and moved to a lower-wage state or country. Logue has ably demonstrated that direct employee-ownership of companies promotes reinvestment, job creation, and asset-building for workers and their local economies.


His Leadership style

Logue serves as a catalyst for democratic management by building collaborative relationships among diverse groups, from rank-and-file employees to business owners to local economic development officials. He helps unions, trade associations, and citizen groups find common ground. “Employee ownership is one of those rare catalyzing ideas that really pulls the community together,” says Logue. As for his personal style, he explains, “I am cautious about my ‘leadership.’ I am definitely not what the journalists call ‘charismatic.’ I’m balding with big ears; the requisite puff hair-do is missing. Leadership, like beauty, is in the eyes of the beholder.” He adds, “In truth, what I do simply is to help others to achieve things that they otherwise would not.”

Logue further rejects the notion that leadership is a zero-sum game, where one leader grabs power and position from another. Instead his coalition-building style creates sources of power, channels of influence, and new opportunities for action. The transition to employee-ownership, he says, is most likely to succeed when OEOC identifies and nurtures employee leaders. “One of the things that has surprised and pleased me is how many natural, unsung leaders there are in any employee group,” Logue says. “Even if these leaders have never held any institutional leadership position, they’re willing to step up to the plate on behalf of their fellow employees.” Leadership development programs include team effectiveness training, leadership development retreats, and trainer/facilitator development, plus a “supervising owners” program in which employee owned companies explore new styles of management, stumbling blocks, and the development of interpersonal skills.


The future

Logue expresses hope that employee-owned firms will become “motors for community economic development” by doing more business with each other. An economy powered by employee-owners, Logue believes, would result in less inequality and greater personal satisfaction. But there is work to be done beyond simply helping companies shift to employee-ownership, he says. A stronger system of mutual support also must be built. Consequently, OEOC is developing a loan fund, a labor-sponsored equity fund, and a purchasing co-op for existing employee-owned companies.

OEOC further aims to build stronger working relationships with traditional cooperatives in the farm, rural electric and credit union, and mutual insurance sectors, and has offered consulting services to other states and other countries, such as the Russian Federation. With co-author Jacquelyn Yates, Logue wrote the influential book, The Real World of Employee Ownership (Cornell University Press, 2002). In the book, the authors envision a future American economy that focuses on the long haul, not just short-term profits. OEOC is working toward the realization of that dream, one company at a time.


More about John Logue

“John Logue is one of those rare treasures in American public life—a doer and thinker who is literally nurturing a more promising future for the country’s economic system, working with patience and pragmatism and tenacity.”
— William Greider, national affairs correspondent of The Nation and author of One World, Ready or Not and The Soul of Capitalism: Opening Paths to a Moral Economy

“John is the leading figure in on-the-ground, hands-on work to help develop real-live worker-owned firms. Around the country and around the world, Ohio is the leading state example of what can be done.”
— Gar Alperovitz, Lionel Bauman professor of economics at the University of Maryland and author of Making a Place for Community: Local Democracy in a Global Era