Australian manufacturing company C-Mac Industries (Aust) Co-operative Ltd, the first worker’s co-operative under the new Australian legislation, delivered to the company’s 30 staff a direct financial stake in the business and an equal say in how it’s run, commenced trading on 1st July 2017 - International Co-operative Day .
After more than five decades of proud family ownership, from humble dirt floor factory beginnings 51 years ago in Ryde, C-MAC has achieved more than commercial success.
“It’s much better than closing it down,” C-Mac general manager Rob McMaster said.
Preservation of his parents’ legacy hasn’t been easy, Mr McMaster said, but “the staff’s aim the whole time has been to secure their jobs. And that’s also a lot of expertise that would otherwise have disappeared.”
The path to employee ownership started in 2008 when, as a family business owner, Mr McMaster realised that succession would be a challenge as there was no family to succeed him.
Initially, as an alternative to closure, he came across a Federal Government program that assisted businesses restructure using an employee buy-in scheme, but a manufacturing industry downturn led to the plan falling.
It did, however, introduce him to employee ownership authority Dr Anthony Jensen (Faculty of Business and Law, Newcastle University), the then general manager of the Australian Employee Buyout Centre scheme. His international research had identified the obstacles to staff ownership occurring and how these could be overcome.
Mr McMaster credits the idea of an employee co-operative solution to both Dr Jensen and “my Christian perspective on life and business,” he said. “At the start, it’s not uncommon for there to be fear and trepidation,” said accountant and business coach Frank Webb of Business Clarity in Blacktown, mediator and mentor to the C-Mac team in registering the co-operative.
He said the biggest hurdle was encouraging staff to think differently. “A cultural change has to happen in the business. The staff need to start thinking of the business as their own,” he said.
Steve Grlyak, now the General Manger and previously the Factory Manager says the co-op model was perfect to secure the enterprise’s long-term future.
He stated “Jobs were the motivator for the staff to overcome their reluctance of becoming entrepreneurs and step into business ownership. This brought about a Win-Win situation with the owner. It is important in this type of transition for there to be an independent arbitrator to negotiate with the owners - someone who has the confidence of the staff. It’s important the owner does not try to negotiate directly with the staff.
To aid the transition from employees to owners, Dr Jensen and Mr Webb introduced staff to principles that guide successful co-operatives including democratic control, ownership culture, networking with other co-operatives and training to become a learning organisation. Mr Webb, a keen backer of co-operatives, described employee ownership as a “terrific model that creates huge value.” Dr Jensen said research shows that employees who have been in a staff co-operative like it- they see it an important way to transform manufacturing companies.
On July 1 2017, C-Mac Industries (Aust) Pty Ltd commenced operating as C-Mac Industries (Aust) Co-operative Limited.
To help C-Mac grow and pass on his experience to his once employees, now fellow owners, Mr McMaster will stay on; “I will become an employee working one day a week. It gives the customers and the staff a feeling of continuity,” he said.
The C-Mac co-operative example is a guiding light of how to establish a staff co-operative, overcome obstacles and reach the point where productivity and efficiency benefits become manifest. This leads the way to a new breed of owner-employees, meeting the market demands of agility and social relevance in the business world.
Would you like to learn what C-Mac Industries Co-operative are working through to transform the business into a "High Performing Manufacturing Workers Co-operative"?