I was a bit disappointed to go in search of the Labor/Class Tuesday diary and find an open thread instead. So a day late, heres my two cents worth:
Food for thought from my local paper:
A New Standard
With sale of Windsor manufacturer to employees, company joins trend popular with both owners, workers
By STEVE HART
THE PRESS DEMOCRAT
Windsor's Standard Structures Inc. has been in business for 60 years, riding the boom and bust of the North Coast's wood products industry.
The family business survived by developing a unique line of products -- laminated wood beams, trusses and joists used for heavy construction.
After six decades, the founding Caletti family has decided to sell. But the $60 million enterprise won't be gobbled up by a big corporation or investment group.
Instead, Standard Structures is being sold to its own workers through an Employee Stock Ownership Plan, or ESOP.
http://www1.pressdemocrat.com/...
Now ESOPs might be abusable (Enron or the tax-free Chicago Times purchase jump to mind), but they are a cool economic tool that changes the relationship of capital vs labor when used as intended. Workers own a majority stake in the company and manage that through a trustee. Some companies like to claim employee ownership because they have stock plans. Only ESOPs let the employees pool their ownership and restrict quick sales for personal gain. The focus is on sustaining the company.
Suddenly instead of the union negotiating for the best severance package when management decides to move jobs somewhere cheaper, the owner-workers weigh the benefits of keeping themselves employed at slightly lower profits. The company described in the article is in beautiful wine country, where the median price for a home is still over 1/2 million. Everywhere else is way more practical and profitable for the company, and surely they would move if it weren't for those pesky sentimental ties to the community.
Don't have a few million dollars in your bank account to buy your company? Well, just as a bank will give you credit, if the company has a profit the workers can borrow against the companys future earnings. And the tax benefits of this type of loan are pretty good.
Never heard of an ESOP? Ever wear Gore-tex or had a Round Table Pizza? Both widely successful companies owned by employees. Puts Round Table's advertising motto, "The Last Honest Pizza," in context.
As the world becomes flatter, even the pensions and retirement plans owned by workers and unions demand higher returns. You may be the heartless owner calling for offshoring of your job and not even realize it.
Anyhow, its just good to see that sometimes the system works and a founder can find a way to ensure a legacy in his community.