In the News: Protecting Loyal Employees, Addressing Succession Planning Needs, Focusing on Growth, and Providing Opportunities

Lumber Yard Supply (Great Falls, MT)

Succession plan touted as aid to business discusses the ESOP story of Lumber Yard Supply, a fourth generation family-owned wholesale lumber business based in Great Falls, Montana. Although the majority shareholder was approached by a couple of third-party buyers, the 100-employee company recently opted to establish an ESOP to protect the future of their loyal employees and address their succession planning needs:

Robinson was approached by a couple of would-be buyers for the business that his family established 122 years ago.

"I thought if the business sold to a different company, that new company would need our employees," Robinson said. "I realized, however, that wasn't necessarily the case and that our employees would not be protected."

Robinson, the fourth generation of his family to run the business, says Lumber Yard Supply has loyal workers who have made the company their career.

So he began exploring a different avenue, even though he thought it might be too late to venture down it. As it turned out, creating company ownership among employees was a viable option.

Lumber Yard Supply established an Employee Stock Ownership Plan and recently completed the first buyout. Now employees own about 9 percent of the business' stock through the plan.

"I thought in my case that it was too late to make an ESOP work for my retirement planning," said Robinson, who plans to continue working at least until 2010.

After a lengthy meeting with Ray Wahlert, president of Pacific Steel and Recycling, which is 100 percent owned by employees through their ESOP plan, Robinson learned that wasn't the case.

With the recovery from a catastrophic fire, the establishment of the ESOP, and a succession plan in place, the company is focused on growth and will be expanding the number of branches in the near future:

"Big lumber companies with locations across the Untied States are pulling back and closing locations," he said. "We can go in there with enthusiasm and build strong relationships."

The new branches are providing new opportunities to existing employees and creating new jobs"

"With the new ESOP plan and the expansion, I really felt I wanted to be part of it," Bake said.

UPDATE 9/6/08: Press Release: News Briefs