Employee-Management Cooperation Gaining Ground

A rapidly increasing number of capitalists, socialists and communists around the globe are urging acceleration of the trend toward workers owning part, if not all, of the companies that employ them.

The workers-as-owners movement is linked to the growth of cooperation between management and employees who are given a meaningful role in making decisions about the way companies are run.

There still are many authoritarian bosses and some disgruntled, old-fashioned union radicals in this country who rail against cooperation and workers participating in company decision making. They apparently don’t want an end to the historic, costly battles between workers and companies that are sometimes called part of the “class struggle.”

Some of that argument is being heard in Anaheim this week at the United Auto Workers’ convention, where dissidents are denouncing the union’s leaders for pushing worker-management cooperation. The dissidents charge that the effort to end adversarial relations in the workplace is mostly a dastardly plot by scheming employers and weak union leaders to make workers work harder for less money.

The “let’s-fight-’em” UAW delegates at the convention with their badly flawed argument against cooperation have been soundly beaten already, and their long-range hopes for success are pretty dim, as evidenced by the growing support for labor-management cooperation and for employee stock ownership plans.

True, such cooperation is sometimes badly abused by employers who pretend to have a cooperative team system in order to cut labor costs at the expense of workers, as the UAW dissidents charge.

And many employers only give workers company stock to get significant tax breaks from employee stock ownership plans and to reduce pension costs, again often at the expense of workers. But when properly used, labor-management cooperation offers workers a new, more meaningful way of life on the job, elevating them from their traditional status as order-takers. Employee stock ownership offers tremendous advantages to companies, too, and can fundamentally change the way the economic system functions.

The growing popularity worldwide of employee stock ownership was clearly in evidence last month at a Washington conference on the topic.

For instance, representatives from Great Britain noted that Conservative Prime Minister Margaret Thatcher has just pushed through tax incentive laws, similar to ones in this country, designed to increase worker ownership of shares in British corporations.

Also, Jan Mujel, spokesman for Poland’s Solidarity trade union, reported that the union and the communist government have agreed in principle that it is “absolutely necessary” to privatize many government- run companies and that the workers themselves should own the companies as often as possible.

Valery Rutgaiver, director of the Soviet Union’s Center for Opinion Research, which deals with ideological issues in that nation, told the conference that his country’s move toward a market-based economy must include worker-owned companies and cooperatives.

Xu Ji, economic counselor of the Chinese Embassy in Washington, said “one of the most exciting things about the American economy” is the spread of the idea of workers as owners of companies. (His comments were made before the recent turmoil in Beijing and government crackdown against pro-democracy protesters.)

Similar sentiments came from representatives of 13 other countries in Europe, Central America and the Middle East.

In this country, more and more unions are using stock ownership plans either as a way to help increase workers’ income or to protect them from being battered by corporate manipulators in multibillion-dollar leveraged buyout schemes.

Jack Sheinkman, president of the Amalgamated Clothing and Textile Workers, and other union leaders are worried about the impact of the waves of mergers and acquisitions that often mean job losses and wage cuts.

Sheinkman and leaders of many other unions are pressing a drive to get a hefty leveraged buyout pool of money that unions could use in their relatively new roles as major players in corporate takeover games, according to Money Management Letter, a publication of Institutional Investor.

The fund might be used, for instance, in a bid planned by Sheinkman’s union to buy Cluett, Peabody & Co., a men’s clothing manufacturer whose products include Arrow shirts, and in a separate effort to acquire Health-Tex Inc., another apparel company.

Union leaders are meeting frequently these days with financiers, lawyers, LBO specialists and others to learn their way around the corporate world, and they are learning fast.

Sheinkman is working with wealthy, sympathetic business executives such as Spencer Hays of Nashville, who is helping the union plan its acquisition of Cluett.

Unions at Eastern Airlines have first-rate experts helping them make a dramatic attempt to use an employee stock ownership plan to protect workers from being further ravaged by the authoritarian head of Eastern’s parent company, the much-hated Frank Lorenzo.

The outcome of that valiant battle is uncertain. But the fact that several individual unions, aided by the national AFL-CIO, are working closely with major financial investors in the fight against Lorenzo shows how blurred the lines between workers and capital have become.

Corey Rosen, head of the Center for Employee Ownership, estimates that more than 10,000 companies and 10 million workers are involved in stock ownership plans, and workers in about a third of those firms already own or will soon own a majority of their companies’ stock.

Increasing labor-management cooperation and the spreading of the idea of workers owning companies won’t solve all of the economic, physical and psychological problems facing workers in this or any other country.

But the trend already has provided real gains for many workers and has the potential to provide much more for many other workers around the world.