Back 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.

The ink is barely dry on the $13.4 billion in "loans" provided by the Bush administration at the end of 2008, but General Motors (NYSE: GM) is already talking about needing more. CEO Richard Wagoner says the company may look to secure additional government cheese in March -- earlier reports had suggested that GM believed the $13.4 billion would be enough to survive through 2009.

How does GM plan to demonstrate viability? It will need to secure broader concessions from the United Auto Workers union and, hilariously, try to convince bond holders to swap their debt for equity in one of the greater cash-burning machines in history. Good luck with that one!

Wagoner also said that GM is still looking to find a buyer for Saab. The company has denied problems in generating interest in the brand among potential buyers -- I'll believe someone is interested in buying Saab when there's a done deal. Similarly, GM has failed to generate any serious interest in Hummer, despite trying really, really hard to find a buyer.

GM's management has been extremely optimistic in terms of its "forward-looking statements," but so far it's all been bluster. Government officials should keep that in mind when GM brass shows up in March to demonstrate a plan for viability.

Welcome to Way Off Wall Street, a column dedicated to providing Main Street opinions on topics of interest to investors. Each installment highlights the views of Americans who are far removed from the canyons of Wall Street -- and who often see things more clearly as a result.

Now that the dust has settled, it's nice to see that the factory sit-in at Republic Doors and Windows in Chicago was successfully resolved. The fact that the tumultuous event was dealt with in such a solid and peaceful manner speaks well of modern organized labor. It cannot be denied that the United Electrical, Radio and Machine Workers of America union, played a large part in bringing an acceptable resolution to the matter. This raises an important question: can and should America's labor unions find ways to be more deeply engaged in the current attempts to fix what is wrong with our nation's economy? It seems to me, in this time of great economic turmoil, that America's labor unions have stayed conspicuously on the sidelines.

The Bureau of Labor Statistics reported that in 2007 the number of Americans belonging to labor unions totaled approximately 15.7 million. I expect that for 2008 that total has declined a bit, but not much. This means labor unions watch over about 12% of our nation's hourly and salaried workers. Those aren't numbers to be taken lightly. The question is, how much of that union clout exists simply to compel corporate America to conform to it's whims, and how much of it is dedicated to particularly benefiting the overall good of the labor force without deference to what form that good might take? Labor unions exist, in essence, to protect laborers from oppression and exploitation. What is a union's part when that oppression is brought on by the larger global economy, and that exploitation is perpetrated by governments, rather than by a particular employer?

This is a continuation of yesterday's story Auto support fund: foreign governments help.

General Motors (NYSE: GM), Ford (NYSE: F), privately held Chrysler and the UAW are in need, but help is not forthcoming with the same vigor that we have helped other industries or other nations help their industries.

One reason is that we Americans feel very strongly that government should stay out of our lives. We not only believe in separation of church and state, but business and state. Perhaps on both counts we are pretending. Everything is all mixed up. When government allows a church to collect money and not pay taxes that sounds to me like the government is subsidizing the church. When government adjusts the tax structure for cars and insists a certain percentage be made or assembled in the United States, the same is true.

I do not believe the "bailout" is a bailout, I believe it is loan that is being considered so that our leaders, on all sides, will have the time to create longer term solutions. I also believe the amount of money in question while very substantial, it is not so, with respect to everything else that is going on right now.

The American auto industry failure is no joke. There is no consensus regarding a solution and the stakes are very high for all of us. We cannot really fathom the complete repercussions from whatever approach we take to resolve this very difficult situation involving General Motors (NYSE: GM), Ford (NYSE: F), privately held Chrysler and the UAW.

There is still no resolution to the gargantuan task of re-working the U.S. automobile industry. The White House this past weekend said that while the administration is trying to work out various scenarios to rescue the ailing industry, it has not come up with a solution yet and the people involved don't expect to make any announcements for a few days.

I have been following the news about the auto industry like the rest of the nation and I have been writing about many of the issues that we face. Yesterday, I added a bit of irony Sunday Funnies: Feds could buy GM & Ford, but this is no laughing matter.

Could 10 or 12 economically conservative Republican Senators prevent a Big Three auto rescue and the cessation of domestic auto manufacturing operations?

Indeed they could. Many of the conservative Republicans come from states where General Motors (NYSE: GM), Ford (NYSE: F) and Chrysler do not have a large manufacturing presence. Hence, there's likely to be little home-front pressure.

That fact, combined with the filibuster era - - whereby lawmakers routinely abuse the Senate's unlimited debate power to oppose any legislation that does not have 60 votes - - the total need to invoke 'cloture' or cut-off debate - - means a dedicated cadre of Senators has the political and procedure power to defeat any legislative item below the 'sweet 60.' Hence, in that sense a dedicated, numerical minority can undermine the will of the majority, the will of the people.

Now the real auto rescue debate begins

What's more likely is that the economic conservative Senators will use the filibuster weapon as a means to extract additional concessions from Big Three stakeholders - - primarily the United Auto Workers. And their goal is obvious enough: a UAW defeat will drive labor costs lower and represent another victory for those who believe the lower wages fall for the typical person and worker, the better. In this argument, wages are merely another cost in the production machine, and the less money allocated for this expense category - - as with any expense category - - the better.

Conversely, the UAW will argue that any attempt to weaken them - - or bypass them - - will hurt/eliminate the only organized power that the typical person and worker has at the bargaining table and in the American economic system. They'll also argue that a living and decent wage for all working Americans is the foundation for a strong, stable U.S. economy, with sustainable GDP growth.

Each side is likely to offer exaggerated business and economic statistics in favor of their arguments, in a Washington process known as 'rhetoric for dollars' that frequently accompanies appropriations bills and government loans. The economic conservatives are likely to argue that UAW total compensation costs are 'wildly above' those for auto workers in Japan and Germany. The UAW will likely argue that it's already made 'major concessions' in previous contracts, without noting that work rules haven't changed that much.

There has been much made of how well United Auto Workers (UAW) members are paid. One figure often used is $73 an hour. And it's also claimed that this pay level puts the U.S. auto manufacturers at a big competitive disadvantage. But that number is inflated and labor costs are not even that important a reason for the loss of U.S. auto market share. The real problem is that U.S. automobiles sell for a lower price but their quality is relatively poor, so consumers prefer the more expensive Japanese models.

The auto industry has used the $73 an hour figure in discussions about its UAW negotiations. But the New York Times points out that this number includes three things that don't all belong together -- wages, overtime, and vacation pay ($40/hour), health care and pension benefits ($15/hour), and retiree pension benefits ($15). That last thing does not belong because it's a fixed cost. If you compare the salary and benefits of a UAW worker to those of a Japanese one who gets less generous benefits, the numbers are much closer -- UAW ($55) vs. Japanese workers ($45).

The more important numbers are the ones that help explain why the U.S. auto manufacturers have lost so much market share and are now at death's door. Labor costs account for 10% of the cost to produce a U.S. vehicle so cutting UAW pay to $45 an hour would not make much of a difference. That's because U.S. labor costs are a mere $800 per vehicle higher than Japanese ones -- yet the typical U.S. vehicle sells for $2,500 less than the comparable Japanese model.

From an industrial standpoint, few companies symbolize the United States' decade of descent more aptly than Ford.

Ford. The mere name conjures up images of deeply-flawed auto market assumptions, an inability to cope with intense foreign auto manufacturer competition, inertia, and an inability to identify what's considered 'cool' among young adults.

As an example: how many young professionals do you know who want to 'run out and buy a Ford today?' These are the main reasons Ford's (NYSE: F) shares have plunged to about $2 per share. Its market cap is down to about $4.55 billion. In 2000, Ford's shares traded above $30.

Ford: it can't get any worse

Well, to paraphrase a song by The Beatles, Ford's stakeholders, including parties who are sitting on large blocs of stock, 'have to believe it's getting better, because it can't get any worse.'

Ford said it will re-hire 1,000 laid-off workers to assemble the company's most important product, the F-150 pickup, The New York Times reported Friday, with the company adding that it expects consumer demand to increase for the product. As a result, Ford says it doesn't need to merge with anyone to survive.

This is part of a weekly series about the car business. The auto industry plays an important role in the global economy, and record-high oil prices and a global slowdown have contributed to a crisis in the sector. This column will highlight some of the interesting stories that emerge as that crisis plays out.

Last week, I suggested that the auto industry was ripe for consolidation (Car Biz: Look out below!). The very next day the potential merger between General Motors (NYSE: GM) and Chrysler hit the news.

I can't claim that I'm clairvoyant. I just read the news like everybody else. And overcapacity is old news in the car business. Even in good times, there are too many factories producing too many cars and trucks for too few consumers who can afford them. Some estimates put overcapacity in the industry in the tens of millions of vehicles per year. The burgeoning recession just makes this basic fact impossible to ignore any longer.

Now Chrysler CEO Bob Nardelli is joining the chorus. He recently said that the rapid and dramatic decline of sales in the American auto market "certainly creates an environment for consolidation." He also spoke about "synergies of productivity" but of course he has to say that. CEOs involved in merger talks always talk about 'synergies' even though they are rarely generated in practice.

Ford Motor Co. (NYSE: F) will be handing out employee buyout offers next week at plants in Michigan and Ohio. Just as the automaker continues grappling with a declining market share and lower sales, it needs to trim its workforce to match.

The automaker has already given employees at plants in Ohio and Kentucky the option of leaving the company with a payoff, so this is nothing new. Offers will be made to employees at 14 sites throughout Ohio and Michigan, with possibly more buyout offers coming to more facilities in August.

As expected, the buyout offers are for five assembly plants in addition to supporting facilities that make engines and transmissions. It's a pretty good guess that all those plants and parts come from the large truck and SUV world, as Ford said it is slowly trending away from building so many of these vehicles. What's amazing is that the automaker warned of slowing truck and SUV sales way back at the end of 2005. It's just now seeing the fruits of it not paying much attention pay off.

Ford's Way Forward plan to return to profitability won't come in 2009 as expected, and will probably show progress in 2010. If gas prices stay near current levels into 2009 and Ford still hasn't rearranged its product portfolio to be as flexible as the U.S. customer needs it to be, it may be beyond 2010 for Ford to see a consistent profit.

MAJOR PAPERS:

• The Wall Street Journal reported that Ford Motor Company (NYSE: F) CEO Alan Mulally isn't done cost-cutting. According to people close to the situation, Mulally is considering more job cuts, selling its Volvo brand and closing the troubled Mercury brand.
• BHP Billiton Limited (NYSE: BHP) CEO Marius Kloppers strongly criticized Rio Tinto Plc (NYSE: RTP) and its CEO yesterday, the Financial Times reported. BHP Billiton has outperformed Rio Tinto in several areas, including share price appreciation and EPS growth, said Kloppers, adding, "On every metric I can envisage they [Rio] have been beaten."

OTHER PAPERS:

• According to the Economic Times, AT&T Inc (NYSE: T) is reportedly in preliminary talks with Malaysia's Maxis Communications about buying its 74% stake in Indian cellular phone company Aircel, sources said.
• The United Auto Workers union has rejected several "generous" benefit and wage proposals, according to American Axle & Manufacturing Holdings Inc (NYSE: AXL). In a statement yesterday, the Detroit News reported that American Axle said while tentative agreements had been reached on several issues, the UAW "repeatedly rejected" other proposals that were "considerably higher than the market rate."

MAJOR PAPERS:

• What Countrywide Financial Corporation (NYSE: CFC) knew about its mortgage borrowers, and how it handled that information, is under review by Federal investigators, according to the Wall Street Journal. Some of their findings reveal that Countrywide had questionable information, which it then put together many of those mortgages into securities, and sold them to investors.
• The Air Force's award of a $40B contract for aerial refueling tankers to Northrop Grumman Corporation (NYSE: NOC) and European Aeronautical Defense & Space, will be protested by The Boeing Company (NYSE: BA), reported the Wall Street Journal.
• The Financial Times reported that News Corporation (NYSE: NWS) CEO Rupert Murdoch dashed the hopes of Yahoo! Inc (NASDAQ: YHOO) executives seeking an alternative to Microsoft Corporation's (NASDAQ: MSFT) $40B offer after Murdoch endorsed the view of analysts and investors that it could not match the value offered by Microsoft.

OTHER PAPERS:

• According to General Motors Corporation (NYSE: GM) president and COO Frederick A. Henderson, the New York Times reported that the auto maker will not intervene in the dispute between parts supplier American Axle and Manufacturing Holdings Inc (NYSE: AXL) and the United Auto Workers union. Given that the strike has not yet hurt the company's ability to sell vehicles, Henderson said company officials "just have to keep to our own knitting."

The head of the United Auto Workers union expects 15,000-20,000 workers to accept General Motors' latest buyout offer, The New York Times reported Friday.

UAW President Ron Gettelfinger said the latest buyout group would be smaller than General Motors' (NYSE: GM) 2006 buyout, when about 34,400 workers -- or one-third of GM's unionized workforce -- accepted deals, The Times reported.

GM's shares were virtually unchanged Friday on the news, rising about 10 cents to $25.92.

Too few taking buyout?

GM's plan is part of an ongoing effort to substantially reduce operating costs. GM lost $38.7 billion last year, and analysts say another successful buyout program is critical to the auto giant returning to profitability in 2008. Independent stock analyst C. Leonard Bauer, formerly of Prudential, told BloggingStocks Friday a potential 20,000-worker buyout is "a decent number" but he wants more.

General Motors Corp. (NYSE: GM), which today reported an auto industry record loss of $38.7 billion in 2007, is offering its unionized workforce of 74,000 a buyout package. The automaker, along with rivals Ford Motor Co. (NYSE: F) and Chrysler LLC which have offered similar deals, better hope that too many workers don't take it up on its offer.

There is going to be a steep learning curve for even the brightest of newly hired GM employees who under a new UAW contract receive half of the old wage of $28 per hour. Moreover, the last thing that Chief Executive Rick Wagoner wants is for GM's assembly lines to be staffed by inexperienced or overworked employees. The results of that could be disastrous.

Many workers, though, are going to take GM's offer and who can blame them. Workers with 10 or more years service can opt for a one-time payment of $140,000 to leave the company and those with less service could take a $70,000 pay out. These employees may be able to squeeze even more money out of the automaker in the coming months by being hired back as consultants at wages that are much higher than they are getting now.

But I doubt that GM and the rest of the U.S. auto industry can grow its business through cutting costs alone. At a time when global competition is becoming brutal, The Big 3 can't afford to lose too many workers who know how to build cars that people want at prices they can afford.

Ford Motor Co. (NYSE: F) may cut additional 9,000 U.S. factory jobs via its latest buyout offer, sources told Bloomberg News Monday.

The cuts, on top of 33,600 union workers who left through buyouts / early retirement in 2006 and 2007, would speed Ford's return to profitability as it would replace them with new workers who would be paid half as much.

Ford's shares gained 5 cents to $6.13 in Monday morning trading on the news.

Necessary cuts

Independent stock analyst C. Leonard Bauer, formerly of Prudential, told BloggingStocks Monday the cuts are part of painful, but necessary changes Ford must make to survive.

"Ford has done a good job in the initial stages of it restructuring, closing useless plants, increasing efficiencies at existing assembly lines, and lowering legacy costs. But the really big savings will come from getting a lower-wage workforce in place," Bauer said. "Because of global competition, auto makers must reduce labor costs by about 30-50%, just to survive. This is another step in that process." Bauer added that he does not have a rating on the company, nor own Ford's shares.

Further, Bauer said he expects the cuts to speed Ford's return to profitability, arguing that if the U.S. recession is mild, or lasting two quarters or less, Ford will earn a profit in 2009. Bauer expects Ford to lose about 15 cents in 2008 and earn about 60 cents in 2009.