Nearly a century of Guttman family ownership transitions the PA energy business to its employees

Founded in 1931 with a single gas station in McKeesport, Guttman Energy Group has grown into a $4 billion fuel distribution and transportation business that includes Guttman Energy, Source One Transportation and Guttman Renewables. Last week, those companies were united under one vehicle, Guttman Holdings.

The transaction closed on Nov. 30. That’s when Guttman broke the news to its 220 employees, most of them assembled at a big meeting at the company’s headquarters in Belle Vernon.

On Monday, Chief Financial Officer Joe Lucot and Chief Operating Officer Mark Harper drove around to meet with the employees who weren’t there last week — some 70 regional drivers — to explain what an ESOP is and how it will impact their employment.

“It’s essentially a long-term pension plan for the benefit of the employees,” Mr. Lucot said.

The Guttman family sold the business at its current valuation to the ESOP, which will repay them that value over an undisclosed amount of time.

As the company’s value grows over time, the increase will accrue to the employees.

Mr. Lucot said the new arrangement won’t give employees an increased say in the direction of the company. But some workers have already begun to ask how they can improve profits that will trickle down to them upon retirement.

“Find ways to help us increase the size of the business,” he advised. “Make the business more profitable, [look for] opportunities to save costs and do things more efficiently.”

The stock benefits start now and aren’t retroactive for tenured employees. They will be awarded each year of employment and set in proportion to an employee’s salary.

Advocates of ESOPs, which also carry tax advantages for sellers, say they encourage employee engagement and retention.

“The longer you stay, obviously, the more value you accumulate,” Mr. Lucot said.

He said employees also asked how long the stock would take to vest — Mr. Lucot declined to make that public — and how the value of the company was determined (also not disclosed).

According to the California-based National Center for Employee Ownership, a research nonprofit that supports these kinds of companies, there were around 6,500 ESOPs in the U.S. in 2019, the latest year for which data is available. In Pennsylvania, that number was 262, covering more than 100,000 employees.

Guttman has been growing rapidly over the past decade, Mr. Harper said on Monday. In addition to its bread-and-butter fuel distribution services, it is looking to expand its oil and gas field services business in the Marcellus Shale, where drivers haul diesel fuel, storage tanks and other equipment used in fracking to and from well sites.

Another branch of the company has beefed up its ethanol and biodiesel business, marketing the fuels to other companies and beginning to move ethanol by rail, he said. Guttman even deals in carbon credits, buying and reselling offsets to its clients. 

The fuel transportation business is also broadening its reach east and west of Pittsburgh.

In a statement, CEO and chairman of the board Alan Guttman said Mr. Lucot and Mr. Harper “have been leading the company for the last few years and have set Guttman up for continued growth.”

As seen in the Pittsburgh-Post Gazette and written by Anya Litvak