Alliance Material Handling has joined the ranks of employee-owned companies after a final sale of company stock under its employee stock ownership program (ESOP) last December.
Alliance president Thomas Albero tells
Forkliftaction.com News the forklift dealer achieved its goal of becoming 100% employee-owned a few years earlier than planned.
 Hobb Santel |
 Ted Wolff |
In 2004, Alliance adopted a leveraged ESOP by buying 32% of company stock from owners Hobb Santel and Ted Wolff. It aimed to pay off the debt in six years. The company aggressively paid down the debt and was rewarded for its efforts.
"Through strong [company] performance and continued focus on reaching this goal, Alliance was able to pay the remaining debt [for the first loan] by May 2007," Albero says.
Over half of the bank loan was paid down within a year and Alliance revised its goal to become fully employee-owned by December 2008. Last year, one year early, Alliance secured a second bank loan and purchased the rest of the company's stock.
The current scheduled payoff of the second loan is December 2017 but the forklift dealership plans to aggressively pay off this loan and revise the payoff date each year.
"A key point is at the time of closing, the ESOP owns the shares outright and therefore [Alliance] is considered 100% employee-owned," Albero says.
He explains that as the debt gets paid down, shares are allocated to employees' individual accounts. The bank loans are repaid by company profits and secured by company assets and the former owners' pledge of funds they received at closing. Employees get the shares for "free".
 Tom Albero |
Albero, who is a certified public accountant, says longer tenured employees will receive more shares over time.
"Hobb Santel and Ted Wolff [wanted to] reward the employees that have worked so hard for them over the years. The managers agreed this was the best way to make the company stronger. What better way to reward employees than to have them all own a piece of the company.
"The slang term [in the US] for this is 'sweat equity', something that most companies have forgotten about.
"In a time when most companies are laying off employees or increasing health premiums, Alliance is helping to secure its employees' retirement," he says.
Ex-owners Hobb Santel and Ted Wolff now have a visionary role in Alliance as chairman and vice chairman of the board of directors. Their former responsibilities have been passed to Thomas Albero, president and CEO; Warren Ross, executive vice president of sales; and David Judd, executive vice president of operations.
Alliance of Jessup, Maryland was formed after the 2001 merger of MidAtlantic Power Inc, Space Maker Systems Inc and Potomac Industrial Trucks Inc. The original companies are over 50 years old.
It is the exclusive dealer for the Clark, Crown, Mitsubishi and Doosan lines of sit-down forklifts and powered and manual pallet jacks. There are about 1,000 forklifts in its rental fleet and its technicians service over 10,000 customer forklifts. Alliance has 165 employees in Jessup, Maryland and Winchester, Virginia. It aims to expand in the Richmond and Chesapeake, Virginia area in the first quarter of this year. Its 2007 revenues exceeded USD41 million.