Nypro Inc. long has been a shining light among plastics processors — a leader in improving worker training and a high-profile example of how to expand internationally.
Now President Gordon Lankton is taking another step that other company owners ought to consider. After 37 years, he's turning over the Clinton, Mass.-based injection molder to its employees.
Some 2,500 U.S. Nypro employees will participate in the employee stock ownership plan. Lankton still is looking for a way for foreign-based workers to participate, too, although complex tax laws make the deal difficult.
ESOPs aren't for everyone, but they offer a lot of attractive features. They preserve the company's identity, provide former owners with a way to cash out and diversify their investments, and offer a boatload of attractive tax incentives.
Most important, they give employees a share of the company, a great tool to recruit and retain workers. It's a nice benefit, and one that can contribute to the company's bottom line.
There's a generation of owners — like Lankton — that soon will reach retirement age. In many cases, they don't plan to keep the business in the family. Either there's no heir interested in running the company, or the owner prefers to sell for estate planning reasons.
These owners have plenty of options to consider. Right now, many strategic buyers are interested in plastics processing companies. Larger companies can consider cashing in via an initial public stock offering (although these days it helps to have a ``dot-com'' in the company's name).
Lankton deserves a pat on the back for choosing an ESOP, because Nypro clearly is a company that had other options. We hope other owners will consider the same route.