Steelworkers in this western Pennsylvania town are trying to buy a foundry they helped put out of business.
Their attempt to become employe-owners through a proposed Employe Stock Ownership Plan (ESOP) is winning federal, state and local support.
Nearly 200 of them are highly skilled metal craftsmen who have been jobless since March 1978, when they started an eight-month strike that led to the closing of the 73-year-old Fort Pitt Steel Castings plant.
The strike was prompted by contract language disagreement. No one here seems to remember much beyound that, or to care.
"All of that stuff is past history,' said James Spresser, caretaker manager of the closed plant for its present owner, Condee Inc. of Greenwich, Conn. "Labor and management had an unfortunate relationship and everybody's sorry."
Body now Spresser and about 200 of the plant's former 325 production workers are waiting to start the factory operating as the new McKeesport Steel Castings Co.
Employe ownership of failed and failing companies is a nostrum that has been much in the news in recent months.
The Senate Banking Committee wants the stockholders of Chrysler Corp. to give part ownership to the employes. In return, the employes would forgo all or some of their scheduled wage increases over the next three years. Only after owners and workers made these concessions would the federal government step in and help bail out the company.
Employe ownership also was discussed for a time as a way of reopening a large steel plant shut down in Youngstown, Ohio. There the idea failed when the government declined to put up the necessary money.
On a smaller and less publicized scale, however, employe ownership is more common than many people believe.
There are about 2,000 U.S. companies with ESOPs of one type or another. Most of these, however, have fewer than 500 employes.
The McKeesport effort may if in this category.
In its simpliest sense, the ESOP is designed to give workers a vested interest in production and efficiency by giving them a guaranteed share of the profits.
"It's capitalism in its purest form," said William Cochenour, vice president of Kelso & Co., the San Francisco-based financial consulting firm that pioneered ESOP and is pushing the program here.
Cochenour said ESOPs correct a basic flaw in capitalism by allowing nearly everyone to become a capitalist.
"Only a few people can be capitalists under the current system. Most of us are allowed to be workers and nothing more," Cochenour said.
He and like-mined evangelists want ESOPs and other forms of corporate co-ownership programs installed both at ailing giants like the Chrysler Corp. and at financially healthy companies like IBM.
But so far, efforts to use the plans in larger operations have been disappointing. The most notable failure came last March when the federal Economic Development Administration refused to give a $245 million loan guarantee to the civic coalition that tried to reopen the Campbell works of the Youngstown Sheet Tube Co.
The Campbell plant closed its door in 1977, throwing 4,100 steelworkers out of jobs. Federal officials said the plant was too large, too old, and its market too uncertain to back the Youngstown employe ownership proposal.
Here in this steelmaking town of 33,000, where unemployment runs close to 6.3 percent and where blighted neighborhoods abound, few people pay attention to the Youngstown at the success of the South Bend Lathe Co., an Indiana manufacturer of machine tools that has increased its productivity and profits significantly since reorganizing under an employe ownershop program four years ago.
The Indiana firm employs 450 people.
"If they can do it, we can do it, too," said Frank Sari, 59, a Fort Pitt worker for 37 years. "All we have to do is pull together."
However, like South Bend, the McKeesport group has more going for it than enthusiasm. Though the Fort Pitt plant is 73 years old, its technological innadrds have been kept up to date.
"We can reopen tomorrow with little difficulty," says Spresser, the caretaker manager.
Also the steel valves produced by the old firm are still in demand by electric power generating companies and other firms.
Basically, the McKeesport plan would work like this:
The new company would assume $8.5 million in various debts and liabilities now carried by Condec Inc.
The Economic Development Administration would guarantee 90 percent of a $2 million operating capital loan, which the employe group would obtain from a local bank to get the plant restarted.
Profits from the operation would be contributed to an employes' trust fund at a rate equivalent to 25 percent of each employe's average annual salary (expected to be $16,000).
Money from the employes' trust would be used to buy McKeesport Steel Castings stock.
The money the company gets from selling stock to its employes would be used to retire debts and improve plant operations.
Funds contributed to the employes' trust would be tax deductible under federal law.
Things seem to be falling into place. The regional office of EDA has approved the McKeesport group's application for the federal loan guarantees. Final approval in Washington is expected soon. The county and city governments have agreed to put up $300,000 in seed money. The united Steel-workers of America, through not satisfied that the new firm would provide its employes with the pension, insurance and wage benefits they once had, has said it would not oppose the plan.
"I don't know of a single in instance were one of these things has been implemented without the workers working for less," said the union president, Lloyd McBride.
"But we won't try to discourage it. We just want the people going into a program like this to be aware of certain realities."
The onetime union members pushing the MCkeesport ESOP say they have no fear of reduced salaries and inferior pensions. They say they expect to receive an average hourly pay increase of 75 cents, though about 25 workers who had been earning as much as $11 an hour would be earning $2 an hour less in the new company.
The difference is that the entry level Salary formerly paid by Fort Pitt -- $4.75 an hour -- would go up to $5.50 in the new firm. The former top salary of $11 an hour would come down to $9.
Benefits provided by the employes' trust would far exceed current union pension benefits, paid on the basis of $9 for each year of service, the pro-ESOP workers say.
As for the union:
"We've always been union people and we expect to have the union back in the plant," said Bernard (Ace) Curran, who worked at Fort Pitt for 36 years and served in various local union leadership positions.
"But I think we'll have a closer relationship," he said with a wry grin. "We probably won't ever close down again because of a strike. Nobody wants to go on strike against himself."