When KKR acquired garage door manufacturer CHI Overhead Doors in 2015, they did something radical. Instead of the usual top-down buyout, they granted equity stakes to over 800 hourly workers. When the company was sold in 2022 to Nucor for $3 billion, those workers received average payouts of $175,000 — some walked away with over $750,000. One forklift driver reportedly wept, telling his manager, “This is life-changing. I never thought I’d be able to send my kids to college.”
This isn’t just a feel-good story about a leveraged buyout gone right. It’s a glimpse into a potential future for American manufacturing — one in which equity is not reserved for the boardroom but extended to the assembly line. In that future, factory workers don’t merely clock in and out; they think like owners, act like owners, and — critically — benefit like owners.
To reindustrialize America, we must move beyond nostalgia and subsidy. We need to fundamentally rethink the contract between capital and labor in manufacturing. That means bringing Silicon Valley’s equity model to America’s industrial backbone — and rooting it not in utopian dreams, but in economic logic as old as Adam Smith.
Smith, Specialization, and Stakeholding
In The Wealth of Nations, Adam Smith famously lauded the division of labor. His example — the pin factory — showed how immense productivity gains emerge when workers specialize in discrete tasks. But what’s often forgotten is that Smith did not advocate division for its own sake. He saw specialization as a path to increased output, prosperity, and — crucially — individual agency within a well-functioning market.
Yet in modern manufacturing, specialization has often been decoupled from ownership. A worker may be highly specialized, even indispensable, and yet have no participation in the firm’s upside. That disconnect breeds indifference at best, resentment at worst.
Equity ownership aligns incentives. When workers are co-owners, the pursuit of productivity is no longer something imposed by managers or shareholders. It becomes endogenous to the workforce itself. An equity-owning machinist doesn’t resist automation — they seek it out, because it raises margins, grows valuation, and increases their stake.
The Andon Cord and the Culture of Ownership
Toyota’s legendary Production System introduced the concept of the Andon cord — a physical cord any line worker could pull to stop the entire production line if they spotted a defect or issue. It’s a striking contrast to typical hierarchical systems. Rather than penalize mistakes, Toyota empowered workers to take ownership of quality.
This works because workers on the line aren’t just laborers; they are guardians of the product. They are trusted to act in the company’s interest. It is, in essence, operational ownership.
Now imagine coupling that cultural principle with financial ownership. Equity creates a reinforcing loop: workers don’t just stop the line to fix problems — they seek out process improvements, suggest optimizations, embrace automation. They behave like founders because they have skin in the game.
That’s how a manufacturing business becomes not just more productive, but antifragile.
Lessons from the Luddites
The fear of machines replacing jobs is nothing new. During the early 19th century, the Luddites smashed looms across England, fearing for their livelihoods. Their anger wasn’t irrational. Textile mechanization did render many skilled artisans obsolete. But the structural problem was that they had no claim on the upside.
Victorian industrial capitalism produced immense national wealth — but distributed it narrowly. Workers were paid minimally (literally — before minimum wage laws were introduced), while capital owners reaped exponential returns. In that setup, innovation was a zero-sum game: what efficiency gave to owners, it took from workers.
The lesson isn’t that technology is the enemy. It’s that when gains are shared, the system becomes self-reinforcing. When they’re not, it breeds revolt — or stagnation.
Why Britain Lost Its Factories
By the late 20th century, Britain — the cradle of industrialization — had lost much of its manufacturing base. While Thatcherite reforms made capital more efficient, they also accelerated offshoring. The reason? Owners chased cost savings abroad without regard for domestic capacity. The model maximized shareholder returns but hollowed out the industrial workforce.
This should be a cautionary tale for the U.S. today. If we attempt to reshore manufacturing with the same zero-sum framework — in which workers are cost centers and not stakeholders — we will merely replicate past failures.
From Silicon Valley to the Rust Belt
Equity sharing isn’t charity. It’s strategy. In tech, the idea that early employees should receive stock is foundational. It attracts talent, increases retention, and creates a culture of ownership. Crucially, it turns work from a job into a mission.
Manufacturing has long lagged behind in this regard. But it doesn’t have to.
Imagine a new Detroit where battery assembly line workers earn equity alongside engineers. Or a network of machine shops in Ohio owned by the machinists themselves, incentivized to upgrade tooling, implement automation, and expand into new markets — because they’ll benefit directly.
If we want to win the 21st-century manufacturing race — against China, against deglobalization, against entropy — we can’t simply pour capital into machines. We must invest in people as co-owners. Equity transforms workers from labor inputs into industrial entrepreneurs.
Toward a New Industrial Model
Reindustrialization is a national imperative. But it cannot be business-as-usual. Tax credits and tariffs won’t fix a cultural and economic problem at the root of our industrial decline. Ownership will.
As the KKR-CHI deal showed, it’s possible to build a manufacturing firm where the shop floor is the cap table. If we can scale that idea — through new financial structures, worker-led SPVs, co-ops, or even public-private partnerships — we might not just bring back manufacturing. We might reinvent it.
Because in the end, manufacturing won’t be saved by subsidies or slogans. It’ll be saved when the people who build things have a reason to build better — for themselves, and for the country.
Sources:
- KKR Press Release: “KKR Completes Sale of CHI Overhead Doors” (May 2022)
- The Wealth of Nations, Adam Smith (1776)
- The Toyota Way, Jeffrey Liker (2004)
- “The Luddites: War Against the Machines,” BBC History
- “Why Britain Deindustrialized,” The Economist, March 2020
- “Employee Ownership as a Tool for Economic Resilience,” Harvard Business Review, 2021
George Payne 