When pressed at a congressional hearing to name other companies whose employees received pay as large as the bonanza bonuses of his own workers, Bill Jack of Jack & Heintz (Fortune, January, 1944) could think of only one. It was not a war-created enterprise but the forty-seven-year-old Lincoln Electric Co., located like Jack & Heintz in Cleveland, Ohio. Through a remarkable bonus system started in 1934, Lincoln Electric pays what it believes are the highest industrial wages in the world for normal hours. In each of the last three years, bonuses have exceeded salaries, and for 1943 the average annual earnings for all employees were announced as $5,539. As a consequence of Jack's mention of the company, it now has the distinction of being the first to oppose in court, with $3,250,000 at stake, the much debated Renegotiation Law. Lincoln Electric is also battling the Treasury, which wants $1,600,000 more in taxes.
The company is the world's largest maker of equipment for arc welding, the art of fusing metals in the 6,000° Fahrenheit inferno of an electric arc. As the most effective merchandiser in the fiercely contested arc-welding field, Lincoln Electric has for years led its many rivals, including giants like General Electric and Westinghouse, in precipitate price reductions. Unlike its big competitors, Lincoln sticks strictly to its specialty, and concerns itself with neither gas welding nor other forms of electric welding. Fifty-five per cent of Lincoln's business is electrodes. These are the metal rods, around fourteen inches long and of various diameters, that melt in the arc to join pieces, fill holes, or add to the metal being welded. They are sold by weight, and prices are figured to the hundredth of a cent. Forty per cent of Lincoln's business is welding machines, which are mostly motor- or engine-driven generators that produce current for the arcs. The remaining 5 per cent is accounted for by helmets and other accessories.
