Reluctant Capitalists

The 1983 employee buyout from National Steel of its division in Weirton, West Virginia, prompted an extraordinary response from a whole range of ideological viewpoints on worker capitalism in general and Employee Stock Ownership Plans (ESOPs) in particular. The reason that Weirton stirred up so much interest is no mystery. Although similar buyouts had happened before, none of them matched this one for drama and scale. The Weirton deal was by far the largest employee buyout ever of a plant that would have been virtually shut down by its parent company. The newly created Weirton Steel Company has a work force of more than eight thousand; the company is large enough to be placed among the Fortune 500. And not only does it dominate the economy of the small city in which it is based (which prompted Fortune to write the story up as “A Steel Town’s Bid to Save Itself”), there was also the symbolism of rescuing a steel company, part of the industry that epitomizes both the rise and decline of America’s economic supremacy.

Not surprisingly, Gus Hall of the Communist Party, U.S.A., called the Weirton deal a “capitalist swindle.” Somewhat more surprising was that a long analysis published in the leftwing magazine The Nation generally shared Hall’s opinion. The Nation article implied that despite Weirton’s marginal profitability, National Steel had a moral obligation not just to continue operating the plant but to do so with no concessions from the work force. The article barely mentioned that employees at the Weirton division were among the highest-paid industrial workers in the country, with wages and benefits typically exceeding $40,000 a year. But even if you assume that National acted irresponsibly—or, what amounts to the same thing for The Nation, acted like a capitalist firm— you should still see a lot more good in the way things turned out than The Nation seems to.

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Eugene Epstein

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The 1983 employee buyout from National Steel of its division in Weirton, West Virginia, prompted an extraordinary response from a whole range of ideological viewpoints on worker capitalism in general and Employee Stock Ownership Plans (ESOPs) in particular. The reason that Weirton stirred up so much interest is no mystery. Although similar buyouts had happened before, none of them matched this one for drama and scale. The Weirton deal was by far the largest employee buyout ever of a plant that would have been virtually shut down by its parent company. The newly created Weirton Steel Company has a work force of more than eight thousand; the company is large enough to be placed among the Fortune 500. And not only does it dominate the economy of the small city in which it is based (which prompted Fortune to write the story up as “A Steel Town’s Bid to Save Itself”), there was also the symbolism of rescuing a steel company, part of the industry that epitomizes both the rise and decline of America’s economic supremacy.

Not surprisingly, Gus Hall of the Communist Party, U.S.A., called the Weirton deal a “capitalist swindle.” Somewhat more surprising was that a long analysis published in the leftwing magazine The Nation generally shared Hall’s opinion. The Nation article implied that despite Weirton’s marginal profitability, National Steel had a moral obligation not just to continue operating the plant but to do so with no concessions from the work force. The article barely mentioned that employees at the Weirton division were among the highest-paid industrial workers in the country, with wages and benefits typically exceeding $40,000 a year. But even if you assume that National acted irresponsibly—or, what amounts to the same thing for The Nation, acted like a capitalist firm— you should still see a lot more good in the way things turned out than The Nation seems to.