The future of capitalism is under threat but employee ownership of businesses can provide the answer to fixing many of its problems, according to the managing director of a leading manufacturing firm.
Sheffield-based Gripple, which makes wire joining and tensioning products, is 100 per cent employee owned.
Ed Stubbs, managing director of Gripple, believes that giving employees a stake can fix the ills of capitalism such as excessive executive pay and pay gaps.
Speaking to The Yorkshire Post, Mr Stubbs said that prior to Brexit a key debate in business was the future of the capitalist model and whether it had failed.
He added that employee ownership is growing in the UK and this trend could well save capitalism.
“Employee ownership is a fantastic ownership model to drive long-term performance in a business and to properly reward and engage employees,” Mr Stubbs said.
He added: “In employee ownership capital is the servant of the worker, whereas in traditional capitalism workers are the servants of capital.”
Gripple is a part of the Employee Ownership Association. The firm’s employees have to buy £1,000 worth of shares within 12 months of employment.
This ensures every employee “has skin in the game”, says Mr Stubbs, and that the business works for them as well.
Mr Stubbs added: “The way in which some large corporations, large businesses are run, they clearly do not serve the people who are working in them and the people who are working in them make up the large part of the population.
“That as a principal model doesn’t look like it will last for the long term.”
Gripple was established in 1989 by current chairman Hugh Facey OBE. In 1994 it turned to employee ownership.
The business is part of the Glide Group, which has over 700 employees worldwide. The group has 550 employees based in South Yorkshire with around 350 of those working at Gripple.
In its articles of association the business can never be sold and it can’t grow through acquisition.
“All of the shareholders in the business today know that it’s do or die,” Mr Stubbs said.
He added: “We either continue to build the business, invest, grow it for the long term or we mess it up. If we mess it up that’s it. It shuts.”
Sales at the business have doubled over the past five years with turnover now standing at £80m. The firm is now aiming to reach £100m turnover by 2021.
Remaining in EU the best option
The business is heavily reliant on exports with 87 per cent of its sales coming from overseas.
Europe and the US account for 70 per cent of its sales.
While Gripple is confident it has the right structure in place, and the business has stocking and manufacturing operations in mainland Europe, Ed Stubbs would prefer it if Britain remained in the European Union.
He said: “If there was a second referendum and I was asked to choose between the Theresa May deal or hard Brexit, I’d vote for the Theresa May deal. If there was a second referendum and I was asked between remain, the May deal or hard Brexit, I’d choose remain.
“Obviously my aspiration and the business’s aspiration is that we do remain.”