T-R PHOTO BY LANA BRADSTREAM Ritchie Industries CEO Robert Amundson shows Lt. Gov. Adam Gregg and U.S. Sen. Joni Ernst the manufacturing operation at the Conrad plant during a tour on Wednesday. The politicians were there to learn more about employee ownership of businesses. Ritchie transitioned to employee ownership 20 years ago.

CONRAD — The benefits of employee-owned companies were explained to Sen. Joni Ernst (R-Iowa) and Lt. Gov. Adam Gregg during a visit at Ritchie Industries in Conrad on Wednesday.

Deb Giarusso, the senior program manager for Advance Iowa, told them about the Employee Stock Ownership Plan (ESOP) program, which Ritchie utilizes. Giarusso said Gregg announced the official launch of the Iowa Center for Employee Ownership in May. The center focuses on employee ownership of company shares, and wants to show how potential employees would benefit from that ownership.

“Our purpose is threefold,” Giarusso said. “One is to build awareness because people in Iowa need to know the value of shared ownership. Two is to educate — once you’re aware, what does that mean? We talk to economic developers in small communities so they know it’s an option for their businesses. The third piece is the connecting, or the networking, to bring parties together to bring service providers in connection with the businesses to facilitate the transition. Ritchie Industries is a perfect example of what the mission is.”

She said by transitioning to an ESOP 20 years ago, Ritchie Industries has remained in Iowa, is sustainable and is increasing the economic vitality of the state.

“Otherwise, this is a business private equity would be looking at,” Giarusso said. “They would come in and offer a great price. They would take the business out of Iowa and then Iowa is the one who hurts. So employee ownership is a method of maintaining businesses in Iowa.”

Gregg said Giarusso explained the possible future scenario of businesses very well as two-thirds of companies in Iowa are owned by baby boomers, and challenges loom in the future as a result.

“If there’s not a true succession plan or if something unexpected happens, that can be a real challenge for a small employer,” Gregg said. “It would be a big deal for a community to lose those employers.”

The ESOP program would help eliminate that risk, he said. As ownership transitions in the two-thirds of businesses, Gregg asked how much of that prosperity will stay in Iowa.

Toward the end of the meeting, the conversation included additional challenges small companies face. Ernst said one of the questions she is trying to answer as the ranking member of the U.S. Senate Committee on Small Business and Entrepreneurship is how to get the federal government out of the way of small businesses trying to grow.

“What are we doing that is hampering you?” she asked. “There is a lot of regulation out there that is not right-sized for the industries we support. Maybe there are programs that don’t work right, too many burdens that don’t fit the size, scale and scope of small businesses.”

Ernst asked the Ritchie employees how ESOP has benefited them. Eric Sieverding, the director of operations and processes, told Ernst about the cancellation of COVID-19 enhanced unemployment benefit programs. As soon as those stopped, he said it was easier to hire new employees.

“We noticed it quick, the change of the number of people looking for jobs,” Sieverding said.

Gregg responded to Sieverding and said Gov. Kim Reynolds took a lot of heat for canceling the programs.

“I think it’s a good thing for our society,” he said. “Iowa is known for its strong work ethic. It’s an advantage we have over other places.”

Another challenge small businesses face is the lack of skilled workers. Ernst said she is concerned about the education system across the country not producing workforce ready candidates when they graduate from high school.

“If we are not ready to get our young men and women into the workforce, we are falling much further behind, and China will eat our lunch if we don’t continue to push,” she said.

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Contact Lana Bradstream at 641-753-6611 ext. 210 or

lbradstream@timesrepublican.com.