Saturday Spotlight: Shining Light Company – Lincoln Electric

Founded in 1895 and headquartered in Cleveland, Ohio, welding-equipment manufacturer Lincoln Electric (Symbol: LECO) has a long history of putting employees first and upholding the values that lead us to recognize them as a Shining Light Company. James Lincoln, whose father was a minister and Abolitionist, wrote, “The program that Christ announced, ‘As ye would that others would do to you do ye even so to them’ is the complete answer to all problems that can arise between people.” The company’s principles are so embedded in practice that there has never been a written ethics policy.

While most manufacturing companies have moved operations overseas to cut costs, Lincoln believes in holding on to its experienced US workforce, retaining human capital and saving thousands of dollars and hours of training time.As a result of this and its policy to do everything possible to avoid layoffs, the company has become known for unparalleled job security. No one has been laid off for more than 65 years. Even during recent recessions corporate leadership understood that sacrifices cannot come solely from the bottom of the ladder. Executive salaries were cut and bonuses greatly reduced as part of overall cost-cutting measures. Employees were reassigned if there was not enough work for them in their current position. That willingness of executive leadership to sacrifice and be involved is also reflected in the company’s open door policy. Any of the company’s employees can meet with the chairman or president on a matter of concern. If uncomfortable with approaching senior management, there’s also the workers advisory board.

Finally, the company has a robust pay-for-performance profit sharing plan.  The incentive system was created in 1934, and bonuses have been paid every year since then to its 3,000 American employees.  This, combined with the practices mentioned above, makes it easy to see why the company has received positive approval ratings among employees on Glassdoor.com and has been named among Motley Fool’s 25 Best Companies in America.

In today’s modern manufacturing culture (and elsewhere) where everything seems to be driven by the bottom line, it’s refreshing to see a company that is willing to stand out from the rest and put its people first. That commitment eventually passes on to customers and shareholders, and demonstrates that doing what is right really does pay off long-term.

 

DISCLOSURE: Shining Light Companies are exemplary companies who live out the Golden Rule in their business practices, demonstrate strong servant leadership and create compelling value through the products and services they offer. This is intended for general information purposes concerning only the values, corporate culture and business practices of the companies being spotlighted. It DOES NOT incorporate any analysis of the companies’ investment merit based on intrinsic value, fundamental analysis, etc. This must not be construed as investment advice or a buy/sell recommendation. These companies may or may not be included in our LightPoint Portfolios at any given time.