Entrepreneurial Answers To Economic Crisis: The Workers BuyOut

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The Workers BuyOut is the entrepreneurial answer to the economic crisis - at least in Italy. Learn how it works and what benefits it holds in store for businesses!

New Entrepreneurship & Occupation

Business transfer to employees and workers can help restraining the closure of industrial companies due to changes in the related market sector or to poor company management. In times of economic slowdown, the Workers BuyOut (WBO) emerged as an efficient instrument for workers, trade unions, and institutional subjects to answer several situations of entrepreneurial crisis, following a development logic which does not merely rely on a social safety net. Practiced in the US until 1956, and known in Italy after the 80’s, WBO recently came to a wider attention because of multiple success stories in several areas. WBO operations are used in particular by companies that must tackle generational change needs, company’s crisis situations, after a case of liquidation or failure. Recipients are mostly SMEs in the form of cooperatives. The requirement for each SME are at least nine workers, each of them must have subscribed a participation which is not inferior to € 4,000 (€ 1,000 for social cooperatives).

The Role Of Mutual Funds In Italy

In this scenario, mutual funds for the promotion and development of cooperation have the social goal of promoting and financing new enterprises and cooperation development initiatives. They operate to promote, reinforce and extend the cooperative presence within the national economic system, sustaining and financing initiatives aiming at programs on technological innovation and larger productivity, as well as business consolidation. These objectives are pursued through multiple intervention modalities, where pool operations often guarantee better availability for cooperatives and minor risks for investors.

In these processes, the role of mutual funds is pivotal. These can cooperative societies, such as Cooperazione Finanza Impresa or Legacoop, which promote cooperative enterprises and the work of social cooperatives. Cooperative societies can take part to the social capital of enterprises and they supply funds finalized to investment plans with the objective of creating value, safeguarding and boosting occupation, promoting the development and repositioning of enterprises with sustainable economic and financial profiles.

Veneto Companies Look Into The Future With Trust

The panorama of Veneto cooperatives is a multiple reality where historical raws and funding values are conjugated with modern entrepreneurship. Thanks to the Workers BuyOut, several cooperatives were born in Veneto Region in these years; The role played by Legacoop Veneto, the regional association of the National League of Cooperatives, was pivotal. From 2008 until today, Legacoop intervened in 30 companies transforming employees into business partners, taking the lead of the enterprise: This is the case for cooperatives such as Italstick, Visual Project, Infissi Design, Greslab, Casa Italia and Textyle Service. Stories where workers decided to take the destiny of companies into their own hands, trying to save not only their jobs, but also to avoid the dispersion of the company’s consolidated professional heritage and market accreditation. This allowed cooperatives coming from different capital-intensive economic sectors to overtake the startup phase.

A New Cooperative Is Born In Venice

Berti Società Cooperativa Lavoratori (Berti Cooperative Workers Society) was established last month in Venice after 22 brave workers of the Venetian historical company Berti Srl, a leader in the sector of glass manufacturing, decided to save their work. The new cooperative society, which will temporarily have its legal seat at the headquarters of Legacoop Veneto, was founded on November 11th with the aim of advancing a formal request for the buyout of Berti Srl. Indeed, the company, which employed 48 workers in total, had been in deep crisis for too long. Its workers did not receive their wage since May 2015 and following to the closure of Berti Srl in July, they decided to start from scratch again, taking the company off.

Conclusion

Like phoenixes, companies can always restart, even after a failure. And they can do it by focusing on their founding values, betting on their future. Adopting an integrated and multidisciplinary approach to the business transfer process would thus allow to understand the improvements needed to ameliorate the legislative environment, making SMEs workers from defaulting companies, professionals and trade unions more aware about the existing normative framework on the buyout. The main problems this resolutive methodology regard the lack of adequate national and European regulations on business transfer and on the cooperative model, as well as insufficient knowledge on the issue of professionals, who are generally involved in the process (i.e. lawyers, psychologists, tax offices, etc). Therefore, wider awareness on the up-scaling methodology of business transfer to employees and on how to improve the know-how on its overall legislative framework should be raised both in Italy and on a European level. A common methodology should be developed to compare the information gathered on business transfer to workers and professionals. Another potential solution for disseminating the best practices and advise companies on Workers BuyOut would include the starting of new training paths and tools for business transfer advisors at the regional level. In future, these professional figures could be hosted by local public institutions, such as the chambers of commerce.

 

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