Anchoring Jobs in Ohio's Communities

IS A PLANT IN YOUR AREA IN DANGER OF SHUTTING DOWN? CAN ANYTHING BE DONE TO KEEP IT OPEN?

Employee ownership might be the answer to continued operation of the facility. It is certainly an option worth checking out and it may be the only alternative to a plant closure and the loss of jobs to the community.

HOW DO YOU FIND OUT?

If the employer is willing to sell to the employees and if the employees are interested in buying the operation, the next step is to have a professional conduct a preliminary feasibility study to determine if the plant in question can survive competitively, under what conditions and whether employee ownership is a workable alternative. After all, everyone should enter such an arrangement with their eyes open and all the options and chances for success laid out.
Prefeasibility studies cost money, something that is likely to be in short supply for a group of workers staring at a plant closure or massive layoff. That’s where the prefeasibility study grant program can be of valuable assistance.

WHAT IS THE PREFEASIBILITY STUDY GRANT PROGRAM?

The federal Workforce Investment Act of 1998 (WIA) continues the prefeasibility study grant program originally authorized by the Job Training Partnership Act (JTPA), to provide monies for such studies. The Ohio Department of Job & Family Services (ODJFS) has contracted with the Ohio Employee Ownership Center (OEOC) at Kent State University to administer prefeasibility study grants in the State of Ohio.
Ohio is a national leader in funding prefeasibility studies and has funded 30 such studies since 1991. Seven led to ESOPs, eight shut down anyway, three were retained by existing ownership utilizing the findings of the prefeasibility studies, seven were bought by outside buyers, two showed that an ESOP was not feasible and three are pending.
Saving jobs is a smart thing to do. It can expand the local labor market and the local economy while saving the State many thousands of dollars by eliminating the need for unemployment compensation payments and other social services.

HOW THE PROGRAM WORKS

Monies are available to buyout committees that are exploring whether employee ownership makes sense in their company. The prefeasibility study is expected to determine whether further feasibility work and a business plan are warranted and to do so rather expeditiously. In shutdown situations, time is of the essence and swift action usually improves chances for success.
To be eligible for a grant, there has to be a clear threat of job loss or shutdown. There also needs to be an established buyout committee to act on behalf of the employees as buyers and the committee generally needs to raise some matching funds.
The size of the prefeasibility study grant is typically in the $10,000 to $20,000 range, but larger grants are possible when there is particular justification.

The application process is simple and quick. Click here for the application form. Or contact us at:

Ohio Employee Ownership Center
Kent State University
113 McGilvrey Hall
Kent, OH 44242-0001
Voice: 330.672.3028
Fax: 330.672.4063