AUGUSTA — Kennebec Technologies employees have known for a while that company President Charles “Wick” Johnson has been thinking about retiring.

“I had always expected I would put the company up for sale,” Johnson said. With no clear succession path to pass the company on to a family member, Johnson said he looked at the possibility of putting the company, a manufacturer of precision parts, on the market a year ago.

But last summer, Johnson started to consider a different option.

In recent years, an increasing number of companies in Maine, including GAC Chemical Corp. and Sargent Corp., have been taking a different succession path: an employee stock ownership plan.

On Monday, Johnson announced to Kennebec Technologies’ 65 employees that rather than selling to an outside entity, he is, in effect, selling it to them.

Johnson has been working with members of the company’s senior management on the conversion, which will take effect Jan. 1.


Production manager Shawn Arbour, of Chelsea, has worked for the company since 1989 and said the ESOP is a big deal for the employees.

“It gives you a piece of ownership in a company,” Arbour said. “I think it’s everybody’s dream to own a company, and this was an easy way to do it.”

After the changeover, company operations should look essentially the same to both employees and customers. Johnson and his senior management will remain in place.

“If we pull this off, these shares could become quite valuable,” he said.

The employee stock ownership plan will own 100 percent of the company’s shares and will allocate a portion of them to employees every year. On their retirement, employees can sell the shares back to the plan. This program enhances the existing retirement offering that includes a 401(k) plan.

“I expect this development will give our workforce a greater than ever sense of pride, investment and incentive to be productive, innovative and dedicated,” he said.


Kennebec Technologies makes parts for a company that produces flap actuators for airplanes.

“If you hear whirring when the flaps are deploying, some of our parts are what’s going around,” Johnson said.

Arbour and engineering manager Brent Duncan, of Jefferson, said that owning a piece of the company provides an added incentive to employees to work harder than they already do because when the company makes more money, so do the employee owners.

“It’s a nice additional incentive to bonus plans that we already have in place,” Arbour said, citing the sales bonuses the company already provides employees.

The company also makes thrust reversers, which slow the engine down and brake the plane.

The company has a history of helping employees succeed by paying for a large portion of educational expenses and rewarding performances through quarterly bonuses. Johnson said those bonuses have been paid out without interruption every quarter for five years.


During Johnson’s presentation to employees Monday, questions were asked about the future of the company, and one employee, machinist Ron Harris, of Oakland, said it was an “early Christmas present” knowing that Johnson didn’t just sell the company to an outside buyer.

“It’s a whole lot better than somebody coming in and buying the place because the chance of that turning out good would be slim,” Harris said. “I was concerned because you’ll never get an owner or boss better than Wick, but hopefully it continues on the way it is.”

From an economic perspective, a manufacturing company like Kennebec Technologies is highly sought after.

“I like to think of us as a 100 percent exporter,” Johnson said, because all the parts the company makes are sent outside Maine and every dollar that comes as a result is, he said, “from away, and that circulates two or three times through the economy.”

Ross Cunningham, president and CEO of the Kennebec Valley Chamber of Commerce, said the precision manufacturing sector is poised for substantial growth in the coming years.

“Kennebec Valley is a better place because businesses like Kennebec Technologies are making it clear that this kind of business can succeed here,” he said.


Bart Haley, Kennebec Technologies vice president for sales and marketing, said if the company had been sold, the alternative could have been a new management team with a new set of goals for the company and its employees.

“In Maine, what you see happening sometimes is that a buyer acquires the book of business and the jobs go out of state,” Haley said.

But to Johnson, perhaps as important as the economic impact is the role in the community that a company like Kennebec Technologies and its employees can fill.

“If I sell to an investment bank or engage in a strategic buyout, the whole civic leadership piece goes away,” he said.

“Wick has had a tremendous sense of stewardship over the years,” Haley said.

He has served on the University of Maine System board of trustees, including time as its chairman. He has also been involved in a number of civic and business organizations, and has served as co-chairman of the Friends of the Lithgow fundraising campaign.


Patrick Mirza, communications director for the ESOP Association, said the conversion can be a complicated process, and one of the challenges is educating employees about their new role as owners. But the move also carries with it a number of benefits.

“If you do it well, you’ll find over time that as an employee, you are much more likely not to be laid off and to keep your job longer,” he said citing industry research.

Kennebec Technologies got its start as Kennebec Tool & Die in 1972 in the garage of Ed Prendergast. By 1980, the company had started making aerospace parts for the space shuttle fuel cells. Johnson bought the company in 1984, and the company moved to Church Hill Road in Augusta and expanded in the decade that followed the purchase. The company continued to grow and invest in itself. In 2009, the company changed its name to Kennebec Technologies.

Both Johnson and the company have earned recognition for their work from government and industry officials. In 2013, the company was named Manufacturer of the Year by the Maine Manufacturing Extension Partnership.

Staff writer Jason Pafundi contributed to this report.

Jessica Lowell — 621-5632

[email protected]

Twitter: @JLowellKJ

Only subscribers are eligible to post comments. Please subscribe or login first for digital access. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.