Book Review: Spark: How Old-Fashioned Values Drive a Twenty-First-Century Corporation: Lessons from Lincoln Electric’s Unique Guaranteed Employment Program

Abstract

At a time when many aspects of American capitalism are being questioned, Frank Koller’s “Spark” puts the spotlight on the US economy's proclivity for mass layoffs. Lincoln Electric, a Fortune 1000 company located in Cleveland, Ohio, has bucked this trend by maintaining a no lay-off policy for decades; nonetheless, it is still standing, prospering in a mature industry in the heart of America’s rustbelt, the last major survivor of Cleveland’s formerly vibrant industrial district, which at the turn of the 20th Century was the Silicon Valley of its day. Why and how this model has worked for Lincoln Electric, what steady work has meant to generations of its employees and by extension to their families and their communities, and whether this business model can be exported to other companies are questions explored in “Spark” through interviews with the company’s executives, its active and retired workers and their families, academic experts, labor leaders, Wall Street analysts, and CEOs of other companies. This book makes an important claim that deserves close attention from government and industry leaders, as well as researchers, namely that it is possible to avoid mass layoffs and thus to mitigate the pernicious effects of economic downturns on workers, their families and their communities, even as patient shareholders are well served in the longer run.

Keywords: Lincoln Electric, Lay-Offs, Labor-Management Relations

JEL Classification: J53, J63