U.S. Senator Amy Klobuchar (D-Minn) recently paid a visit to Diversified Plastics Inc. (www.divplast.com), a Minneapolis-based custom injection molder of high-precision, close-tolerance small- to medium-sized components for the medical device, filtration, aerospace industries among others. Senator Klobuchar wanted to learn more about Diversified’s transition to an ESOP (Employee Stock Ownership Plan). Joining Sen. Klobucher during her visit were members of the Minnesota/Dakota chapter of the ESOP Association, two Brooklyn Park city council members, and the city manager.
Sen. Klobuchar is a co-sponser of the Promotion and Expansion of Private Employee Ownership Act of 2013, which would eliminate barriers faced by businesses and their owners when setting up a new S corporation ESOP. Klobuchar said that she is trying to make sure rules are fair to allow an even playing field with other types of entrepreneurial businesses.
Diversified Plastics employees took ownership of the company on Sept. 30, 2011. (www.plasticstoday.com/articles/taking-stock-diversified-plastics-employe...) Five years earlier, Jim Dow, president, CEO and founder of the company, began planning his retirement. Working with Roger Vang, the CFO for Diversified, he started exploring the possibilities of an ESOP strategy. After a few more years of substantial growth, Dow was ready to move ahead in making Diversified Plastics an employee-owned company.
Recently, Vang learned that Sen. Klobuchar was visiting ESOP companies in Minnesota and he invited the senator to visit Diversified Plastics, meet with employees and learn more about their transition.
Annette Lund, VP of Diversified Plastics, led Klobuchar and others on a tour of the company’s facilities where they had an opportunity to speak with employees and learn more about the effects of employee ownership. “Even though it’s been two short years, we’ve already seen the benefits,” said Lund of the ESOP. “The employees are more empowered, morale has risen and productivity has increased. It has proven to have been a sound investment.”
Sen. Klobuchar commented, “We, the senators involved in this effort, think we can up the ante and start having people within government understand the value of this kind of business ownership where employees actually get some skin in the game. This is a company that has proven that employee ownership is a successful business model that leads to more jobs, higher wages, increased productivity and higher retirement security.”
Diversified Plastics is a 36-year-old company that offers full-service capabilities including design assistance, mold construction, high-tech molding and cleanroom assembly. The company is ISO9001:2008 and 13485:2003 certified, ITAR certified, and UL registered.