Employees On The Way To Owning Quirk Wire Co.
West Brookfield manufacturer keeps local control
In 2002, after 24 years making high-temperature wire and cable in West Brookfield, Quirk Wire began fielding buyout offers from larger corporations. So the company's owner, Harrison "Hoddy" Quirk, did what he thought had to be done: He sold the family business to its employees.
Now, the employees own 49 percent of Quirk Wire, and beginning on Dec. 21, they'll start paying Quirk for the remaining 51 percent.
Quirk sold the company he started in 1978 to its employees in an ESOP, an Employee Stock Ownership Program.
The employees should own the company entirely in four or five years, the 75-year-old Quirk estimated, and what they're buying is a wire and cable manufacturer doing about $12 million in sales annually.
Today, Quirk operates 24 hours a day, and produces 2 million feet of high-temperature wire and cable each week. Quirk's biggest customer is Boeing, and the company also does a lot of work for the military. About 20 percent of Quirk's business is in the Middle East.
And Quirk is not alone in Central Massachusetts as far as ESOPs are concerned. Clinton-based international plastic molding company Nypro was sold to its employees in 1998. In January, machined component-maker Lampin Corp. of Uxbridge was bought by its employees. And their reasons for selling to their employees were similar to Quirk's.
Quirk said acquisition "overtures" from wire and cable manufacturing giant CDT either didn't acknowledge Quirk's profit sharing plan or didn't make any provisions for Quirk's managers. Also, Quirk's employees "don't want someone to come in and buy the business and just move it away."
Now, that won't happen unless such a proposal makes it past the company's employee/owners and its ESOP committee. Quirk is preparing to retire, and when he does, he's sure the company will be in good hands.
According to the Massachusetts Office of Employee Involvement and Ownership, most employee-owned companies in the U.S. use an ESOP to achieve that status. The office also says ESOP companies outperform similar non-ESOP companies by about 2.3 percent measured by sales and employment growth; and in the year it adopts an ESOP, the average company sees a productivity increase of between 4 and 5 percent.
Sticker Shock
Most of Quirk's 38 employees are typical manufacturing sector employees. Quirk said they don't need degrees in mechanical engineering or loads of experience in industry. "We just want people who want to work," he said.
Quirk laughed as he remembered the looks on the faces of his employees, most of which have been at Quirk for more than 15 years, when he announced he was selling the company. "You should've seen their reaction," he said.
"We're selling the company," he told them. "You're buying it."
In an ESOP, the sellers of a company can sell the business with a minimum tax liability and the employees are able to buy the company "without spending a dime." He said Quirk employees squawked at first.
"'We don't have any money,'" Quirk recalled them saying.
"You don't have to," he told them. Quirk borrowed from the Bank of Western Massachusetts, and through their wages, the employees paid off the 12-year loan in four years. As the loan was paid down, the company distributed stock to the employees.
These days, "they seem to have a lot of enthusiasm for it, and a lot of them are finally coming around to understand it," Quirk said of the ESOP.
End Of The Line
Retirement and employee ownership of Quirk Wire is a long way from where the company started. The building at 146 E. Main St. in West Brookfield had been home to a wire manufacturer run by the Poti family, which had sold the business "to two guys who went bankrupt, and took all the equipment with them. Poti ended up with a business with no inventory," Quirk said.
Quirk, a mechanical and electrical engineer, had been a paper mill manager in Michigan, where he attended the University of Michigan, and at Ludlow Paper in Ware. But working for Ludlow wasn't Quirk's cup of tea.
"I hated it," he said. "I am not cut out to work for a large corporation. No one wants to make a decision. Everyone wants to cover themselves."
Quirk remembers Massachusetts' unemployment rate being a whopping 13 percent in the late 1970s. Still, he was able to convince four former Poti employees to leave their jobs and to work for him at Quirk. One of them still works there. Two retired from the company, and one who was elderly at the time, has since died.
With those four people, Quirk had the four basic areas of the plant covered, and he could "go out on the road and call on customers."
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