ack in June, the National Center for Employee Ownership published a list of the top-100 employee-owned companies in the United States. To be considered for the rankings, companies had to have at least 50% of their stock owned by "an ESOP, a stock purchase plan in which most full-time employees can participate, a profit sharing plan or other trust, or some combination of such plans."You might be surprised by the number of household names that made the list: Publix Supermarkets, Price Chopper, Hy-Vee, Lifetouch and Amsted Industries, just to name a few.
I wonder: Could that business model work for the beleaguered Detroit auto industry? General Motors (NYSE: GM) and Chrysler are being crushed under the weight of enormous obligations to current workers and retirees, along with long-term debt and government loans. Both companies still need more government money, and one option that's being considered is a bankruptcy filing.
Here's my plan: Have the government assist in restructuring the company into one that is employee-owned, with workers receiving stakes based on the benefits they've accrued. Then allow the shares to be freely-traded on a stock market so that workers who need cash can sell a chunk -- but provide strong penalties for workers who do so before the age of 65. Publix has stock that can be traded by employees, but GM and Chrysler might need a more liquid market.
The beauty of this plan is that it would align the interests of the UAW with the long-term health of the company. The workers would be the owners of the mess that they've created in partnership with the company's incompetent executives. The value of their stake in the company would depend on their ability to make it competitive again: Gorge on inflated wages and benefits and destroy the value of your stake. Move from the current model that pits GM's employees against its owners into a wonderful collective operation.
Would this actually work? Of course not. It's too late and even an employee-owned GM would require tens of billions in government financing, putting us back in essentially the same position we're in now. But if more had been done to align the interests of the auto industry's workers with the fortunes of the companies they punched the clock for, we might have been able to avoid this meltdown.











Reader Comments (Page 1 of 1)
2-23-2009 @ 11:39AM
Bob said...
I followed your plan for 31 years (buy GM stock) so did the majority of my co-workers. Now my 31 years worth of GM stock is worth crap. I have lost every thing. What do you want the new workers to do? The same thing ???
2-23-2009 @ 12:24PM
monty said...
My father worked foe Westinghouse Electric, East Pittsburgh Plant for 35 years before he retired. The AFL-CIO union went out on strike and stayed out for 1 year. They then went back at the same wage as when they walked out. Dad almost lost everything. He was reduced to taking free government cheese, flour, powdered milk and working as a cashier in a grocery store that year. It was humbling. My opinion then as well as today is UNIONS SUCK! They kill good companies and good workers with their GREEDY DEMANDS.
2-23-2009 @ 12:59PM
bitasno said...
I you hand he keeys to the union then what next ? they alreasdy run the company , getting a wonder wage , i mean everyone every where else wonders how they get so much for doing no more than they do and bitchin so much . then when the company says were closeing they scream what about me ! well when you live by the sword you die by the sword . unions were at one time a good thing they were needed and still are in some cases but if the money isnt thee it isnt there couldnt they see this when the the cars came here from over seas and kicked butt on all three american car companies . damn im sorry to see them go but , dang folks they cut open the golden goose to get "all the eggs " and well you all know the story .
2-23-2009 @ 1:24PM
Jim said...
Evidently you don't understand a thing about the auto industry probably because you never worked in a factory for one of them. You say the employees created this mess with the incompetent executives. Your half right, that is the incompetent executive part. They have made all the buisness decisions not the employees. I have 32 yrs. with GM as an hourly employee and have never had made one decision for them. I sure wouldn't have paid Ross Perot 350 million for his company then 700 million to leave because I didn't like his criticism of the company, or I definetly wouldn't have lost my butt by buying Fiatt. And I definetly wasn't in favor of buying Yatchs, Jets, and Helicoptors when I am supposed to be an automotive company. And to take the enourmous salaries and bonuses that management has been taking wasn't the employees idea. If you hire into GM today and work production you are going to make $14.00 per hour. If you are in skilled trades you are going to make $30.00 per hour. Tell me how that is being over paid. Let me know of a Doctor, Dentist, or Lawyer who works for $30.00 an hour, or better yet let me know of a repairmen or plumber or electrician who will come to your house for $30.00 an hour. We have given up parts of our raises over the years to put them in funds to pay for our own insurance and reitrements. So we are not over compensated or are guilty of making bad decisions. We just have been so poorly managed over the past twenty or thirty years. If we would have been a Japanese company most of the upper management people would not have recieved bonuses. They would have recieved a Hari Kari knife.
2-23-2009 @ 1:02PM
william lindblad said...
I was part of management, but feel that unions have some use, but only when both entities work together. Like it or not, in today's union environment, they are also big business. Management could avoid unions altogether by treating employees fairly and keeping them abreast of market conditions and competitors. Companies that follow this principle usually do not have unions as the employees are not motivated to unionize.
In this blog you say "this is my plan" and a few para's later state that "it won't work". ?? Why propose this premise in the first place? By the way, you are correct, it does not work. Hyatt roller bearing is a good example.
2-23-2009 @ 4:20PM
TX CHL Instructor said...
UAW doesn't *want* the keys to the company. What unions really want is all of the benefits and privileges of ownership, without any of the responsibilities.
--
www.chl-tx.com
2-23-2009 @ 4:36PM
babyraymond8 said...
I wish you all could see these thing through my eyes but I know that nothing I say will change your closed minds. I am a proud UAW worker. I do not make 70 dollars an hour or even half as much as Fox news (The GOP Channel) would have you believe. I do not have gold plated heath benefits. I pay 65-80 dollars every time my family or I walk into a doctors office. I do not or do not want to own the company. I just want to go to work everyday, make a decent wage to support my family and live in my very modest house. Anybody who says that I dont work hard has never spent one day on a assembly line building 65 jobs per hour. Give it a try someday. You would not believe how many people quit on their first day! Be American!! Buy American!! Drive American!!
2-24-2009 @ 9:38AM
genesis68ba said...
Great comments by Babyraymond. - Dead on if only people would listen. I dare anyone to find me one person, working on the shop floor, that makes $65 - $75 an hour - There are not any!
And remember, the author of this article (Little Zachy boy) is only a sophomore in college. His whole experience in the working world is running a kool-aid stand on the streets of Boston.
2-24-2009 @ 10:39AM
kevinisler said...
genesis - first of all they are not saying UAW workers actually make $70/hour... they are saying with benefits, helathcare, time off, etc, it COSTS the company $70/hour per employee!
and to JIM - I too am a UAW employee, and I see the waste of the UAW! Incompetent workers who should not be employed get to keep their jobs because of the union! I feel they should be fired, and let somebody else who would appreciate that $28/hour and actually work for it! I can walk by the cafeteria in the GM PowerTrain plant in Defiance at any given moment and find 2 dozen of my buddies playing cards ON THE CLOCK! There are a handgul of them! And the skilled trades workers are what arekilling the company... By UAW contract they have to hire so many skilled tradesmans, even though there is no work for them to do.. and then they him-haw around all week just putting their 40 hours in and not fixing a dog-gone thing, so that when the weekend rolls around the work still needs done, and now they get overtime ($32/hour for skilled trades plus Sat OT= $48/hour) for doing what they should have done in the 40 hours they were playing cards! They know how to work the system as protected by the UAW!