Longtime Moses Lake business goes to employees

by Matthew Weaver<br>Herald Staff Writer
| April 20, 2007 9:00 PM

MOSES LAKE — The meeting Lad Irrigation Company held Tuesday evening was a big one.

Held at the Best Western Lake Inn and Conference Center, it was threefold in purpose.

It was the company's annual business meeting, during which employee-stockholders heard from financial appraisers.

It served as the kickoff for the company's 50th anniversary year.

It also marked the first meeting since Lad founders Arlie and Aurora Updegrave gave their remaining 49 percent of the company to the employees.

The Updegraves first sold 51 percent to employees in 1994, said General Manager Randy Gubler. The loan was paid off in about 2003 to pay for the purchase, and the employees have been working on the process to purchase the remainder ever since.

"It's sort of sweet one way and sad another way," Arlie Updegrave said. "I've spent most of my life working and building this company. Then to sell it, it's tough. It's hard. It's like when I quit working down there, it took me a couple of years to get to the point of not going to work. It was my little baby. And now I've sold it, and I like things, more than money. It's theirs now, and it's wonderful. They're the people that made it possible."

Randy Gubler has been general manager of Lad Irrigation since 1980. He becomes president of the corporation with the Updegraves selling the last half of the company.

"When Arlie hired me in 1980, one of the things he told me was he had a dream of being able to sell the company to the employees," he said. "I don't think he knew exactly how he was going to do that, or in what fashion, but that was a goal he had. So he has worked for it. That was always one of the reasons I came to work, was to be part of that process."

For Arlie Updegrave, selling the company to the employees is a sign of the business' success.

"If we're not successful, why work?" he said. "The success has been developed because of individual people doing what we've hired them to do."

"There aren't that many business owners that are that generous," Gubler said.

Arlie Updegrave remains as chairman of the company's board of directors. He and Aurora intend to remain in Moses Lake.

Owning the company serves as a retirement plan, Gubler explained. The employees don't put money into the Employee Stock Ownership Plan, or ESOP, but receive stock based on their earnings. The stock is valued by an independent appraiser every year, who examines the organization and the economy.

"As our profitability increases, as we get stronger and stronger as a company financially, of course the value of the stock increases," Gubler said.

When an employee reaches the age of 65 to 67 and decides to retire, the company has to buy the stock at the appraised value.

Washington Trust Bank Vice President Brien Godfrey, who has been involved in the process, said there are not many privately owned companies where the employees want to buy the company when the founder decides to retire.

"Very rare," he said. "People want to go work and they've got a job. They don't want to actually own part of the company. They can't mess up, because they own part of the company."

The company has proven itself with profitability and earnings, so it can sustain the employees taking the risk and buying the company, Godfrey said.

Gubler said the company management is not changing, but noted employees are part owners of the company.

"Your attitude about coming to work and your efficiencies of the way you work probably are going to change a little bit," he said. "The harder you work, the more efficient you are, the more sales you get, the better you put the installations in, all of that improves the value of our stock. And so we all have a real true part in building the value of Lad Irrigation."

Lad is headquartered in Moses Lake, and also has locations in George and Othello.