[Congressional Record Volume 151, Number 1 (Tuesday, January 4, 2005)]
[Extensions of Remarks]
[Pages E5-E6]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       COMPANY THAT DOES IT RIGHT

                                 ______
                                 

                          HON. BERNARD SANDERS

                               of vermont

                    in the house of representatives

                        Tuesday, January 4, 2005

  Mr. SANDERS. Mr. Speaker, I want to bring to your attention a 
remarkable company, located in my home state of Vermont, that can and 
should serve as a model for corporate responsibility in this era so 
unfortunately marked by greed of CEO's, who last year paid themselves 
301 times as much as the average worker in their companies.

[[Page E6]]

  The company I speak of is Chroma Technology Corporation of 
Rockingham, Vermont. It is completely employee owned. The firm has a 
flat pay scale, where no employee makes less than $37,500 and no one 
more than $75,000. Thus no top-level specialist makes more than twice 
what anyone on the shop floor earns.
  Yet Chroma competes in the global marketplace, taking the risks that 
other corporations do. It is a global, high-tech manufacturer of 
optical filters for microscopes used by the world's top biologists. It 
is the major supplier to three of the four major microscope 
manufacturers in the world (Zeiss and Leica from Germany and Nikon from 
Japan). Chroma is also the second source for Olympus of Japan and was 
recently chosen as primary supplier to Motic, an emerging Chinese 
microscope company. Chroma is today a premier manufacturer of high-tech 
products, and expects sales of $16 million in 2004.
  While other companies practice outsourcing, Chroma remains locally 
rooted, with virtually all 68 employees living within a 50-mile radius 
of its facility in Rockingham.
  So amazing is its story--and so important is its lesson to how 
American companies can not only survive but thrive in the international 
marketplace--that I want to tell that story to the American nation.
  When it began, Chroma had a policy of paying everyone the same wage, 
a wage pegged to the local living wage. By the time the firm grew to 17 
employees in the early 1990s, everyone was making an identical $30,000 
per year. ``If we would have changed our wage structure at that point, 
we would have had a revolution,'' says Chroma's CEO, Paul Millman.
  In 1996, Chroma instituted the policy that tenure would determine 
pay. ``The criterion is longevity, rather than job description,'' Mr. 
Millman explains. Today the maximum salary of $75,000 is the same for 
everyone, though new employees can start higher than the minimum of 
$37,500.
  The disadvantage of this flat pay structure, according to Mr. 
Millman, is that some people with graduate degrees or business 
experience won't work there, because they'll be paid the same as 
someone in production. The advantage, he counters, is the cooperative 
atmosphere, the self-direction, and the lack of a managerial class.
  Chroma practices not just worker ownership, but worker democracy. At 
one time the company made decisions through a Quaker meeting format 
where consensus ruled, though that's being revisited now that there are 
more employees. Still, there are no designated managers at Chroma, and 
employees occupy all seats on the board of directors. More than 95 
percent of company decisions are made on the shop floor. ``We call it 
full exposure management,'' says Gabe Capy, a member of Chroma's 
shipping department who has been with the company eight years. ``It is 
peer pressure that then encourages people to perform.''
  Nor does Chroma cut corners on environmental issues to cut costs. 
Chroma recently invested $130,000 to make its new 28,000-square-foot 
factory energy-efficient. The company will recover those costs in less 
than two years through savings in electricity and propane costs. ``They 
have gone far beyond the efficiency measures associated with standard 
building practices,'' says Gabe Arnold, technical coordinator for 
Efficiency Vermont, a statewide energy efficiency utility. While most 
companies focus on lowering costs, he says, Chroma showed an innovative 
willingness to invest heavily up-front in efficiency.
  Because employee-owners intend to pass this company on to future 
generations, it is virtually impossible for Chroma to be sold. After 
the founders leave, no single employee will own more than 5 percent; a 
super-majority is needed to sell the company.
  Employee ownership, worker democracy, environmental stewardship--and 
an all-American work force: instead of being liabilities, these 
practices help Chroma compete in its global, high-tech markets. The 
structures of employee ownership and involvement contribute 
significantly to the high quality products that are Chroma's trademark. 
``Other companies can build these filters quicker and cheaper,'' Mr. 
Millman concedes, but because Chroma has educated the biologists who 
actually use the microscopes about its optics, it has developed strong 
customer loyalty. ``That adds to the romance of our product,'' he says. 
``We now have three Ph.D. biologists on our staff, and that is no happy 
accident. No other optical filter company can say that.''
  While competing internationally, Chroma defines itself by a different 
economics than that touted by most business schools. ``I prefer the 
term `sustainable economy,' or an economy that keeps us living. That's 
what Chroma is all about,'' says Mr. Millman, CEO of what has been the 
fastest growing technology company in Vermont for the past five years. 
He credits the business environment in Vermont for nurturing Chroma's 
value structure. ``Vermont is the prototypical state for the creative 
economy,'' he said. ``This was the first state to abolish slavery. 
Outcasts from the '60s and '70s came here and created communes. This is 
where Ben & Jerry's started.''
  Vermont, I should mention with pride, along with Ohio, boasts the 
greatest concentration of employee-owned companies.
  At Chroma Technology, where committed employees lead naturally to 
loyal customers, being local goes hand-in-hand with being global. 
Chroma Technology shows us all that it's possible to make a mark in the 
global economy and do it in a way that is sustainable and humane.

                          ____________________