Layoffs are a fact of life for anyone working in corporate America. But one company has managed to avoid them for over 70 years despite the “towering inflation of the early 1980s, the stock market plunge of 2000-2001, [and] the Great Financial Crisis of 2008-2009,” writes Fortune’s Geoff Colvin. That company is Lincoln Electric, one of the world’s largest producers of welding equipment and supplies.

Lincoln Electric CEO Christopher Mapes tells Colvin that the company’s ability to dodge layoffs is the most visible element of an overarching philosophy of management that guides the business through financial booms and busts.

Here’s a snippet of how it works: 

“The Lincoln Electric system, known internally as ‘the program,’ is radical and deceptively simple. Production employees agree to let Lincoln increase or decrease their standard 40-hour workweek within limits based on customer demand. They get paid by piecework instead of the hour and receive a year-end bonus reflecting each worker’s performance. The company, in turn, pledges not to lay them off for lack of business.

When CEOs visit Mapes to learn more, he first asks them why they want to install the Lincoln system. If it’s just to increase productivity, he says, ‘That may not be enough, foundationally, for it to survive.’”

Read the full story here.

Amber Burton
amber.burton@fortune.com
@amberbburton

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