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[Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index] RE: Virginia Privatization and Employee Ownership
Tim, Nothing about rail, power or water -- only transportation, alcohol beverage control, social services and bookstores. > -----Original Message----- > From: Tim Mitchell [SMTP:pentim@netspace.net.au] > Sent: Sunday, October 10, 1999 12:12 PM > To: EOpriv@cog.kent.edu > Subject: Re: Virginia Privatization and Employee Ownership > > Rafaella > > Does the Virginia report say anything about rail, power or water? > > If it does I'd be interested in obtaining a copy. > > Tim Mitchell > > -----Original Message----- > From: Chuahy, Rafaella B. <rchuahy@fed.org> > To: 'EOpriv@cog.kent.edu' <EOpriv@cog.kent.edu> > Date: Friday, 08,October, 1999 00:32 > Subject: Virginia Privatization and Employee Ownership > > > >Hi all, > > > >If you want to find out more about Virginia's efforts towards employee > >ownership, a good source is the report entitled "Secretary of > Administration > >and the Commonwealth Competition Council on Methods to Privatize > Appropriate > >State Government Functions through the Development and Promotion of > >Employee-Owned Companies." > >Copies of the report can be obtained by writing the Commonwealth > Competition > >Council, P.O.B. 1475, Richmond, VA 23212. > > > >-----Original Message----- > >From: Timothy Regnitz [mailto:tregnitz@bcigroup.com] > >Sent: Thursday, October 07, 1999 9:33 AM > >To: 'EOpriv@cog.kent.edu' > >Subject: RE: unions, EO & privatization > > > > > > > >Did you get this? > > > >Tim Regnitz > >Principal > >BCI Group > >1-800-705-4964 > >tregnitz@bcigroup.com > > > > -----Original Message----- > >From: Timothy Regnitz [SMTP:tregnitz@bcigroup.com] > >Sent: Thursday, October 07, 1999 8:20 AM > >To: 'EOpriv@cog.kent.edu' > >Subject: RE: unions, EO & privatization > > > > Unions have large pension plan that invest in assets not limited to > >large publicly traded U.S. corporations. Why not use some of that cash to > >fund employee buyouts in companies where unions are present or have union > >membership a requirement for the loan? What's best for employees in the > 21st > >century is ownership......most likely at the majority level. > > > > Tim Regnitz > >Principal > >BCI Group > >1-800-705-4964 > >tregnitz@bcigroup.com > > > > -----Original Message----- > >From: Dan Bell [SMTP:dbell@kent.edu] > >Sent: Wednesday, October 06, 1999 12:25 PM > >To: EOpriv@cog.kent.edu > >Subject: Re: unions, EO & privatization > > > > Hello fellow EOPRIVers! > > > > I would like to add a thought to the discussion going on > >about the role of unions in companies with employee ownership. > >From my point of view, this is relevant to the discussion on > >Employee Ownership in Privatization, because state-owned > >enterprises often have employees represented by unions and > >this can have an impact on the process. > > > > The union role can be divided into two areas here. > >1. Union role vis-a-vis the process of privatizing > >2. Union role in the employee-owned company after > > privatization has taken place > > > > Regarding #2 (the post-privatization role), the union > >role is no different than in any other company making a > >transition from conventional to employee ownership. > >A. Protect the individual members: Unions are the > > judicial branch which protects the rights of individuals > > before the awesome power of the executive branch > > (management). Even where management is accountable > > to the workers as shareholders, as are our government > > officials to the voters, an individual worker or > > voter still needs judicial protection. > >B. Organize the workers' ownership into a coherent > > voting block. Where workers are merely individual > > and unorganized shareholders, their interests can > > be divided and conquered. > >C. Develop an ownership culture among workers: Together > > with management, union leaders can oversee the > > establishment of an employee involvement structure, > > and an ownership education and training program, > > which helps workers develop the new skills and > > knowledge to act as owners. > > > > Regarding #1 (privatization process role), the union's > >role is to protect its memberships' interest, and seek > >the outcome which is best for its membership. > >At a macro-level, the union should influence laws which > >establish the ground rules for privatization which give > >employees the opportunity to participate in the new > >ownership structure in a meaningful way. > >At a micro-level this could be: > >A. Fight privatization: The taxpayer/voter can be convinced > > that the service provided is appropriately subsidized with > > tax dollars. There are three interests at stake: taxpayer, > > consumer, worker. These three groups overlap but are not > > identical. If the taxpayer stops subsidizing, this cost > > is either passed on to the consumer (pays more out of pocket > > or loses the service), or to the workers (reduced number > > of jobs or reduced wages and benefits or both). > >B. Accept the inevitable and seek the best outcome: If the > > taxpayer/voter cannot be convinced to subsidize, then the > > government will stop providing the service. The union > > can: > > 1. Oversee a feasibility study which shows how the new > > private company will provide the service at a price > > which the market will support. Once the amount of total > > probable revenue is identified, then the union has to > > maximize the share which its members will get. > > 2. Negotiate the tough choices. In all likelihood, this total > > will be less than what it was before because the > > taxpayer subsidy is gone. To maintain the previous > > level of income for all the members, the new company > > will have to both get more output from each worker and > > expand its activities to generate greater sales. > > Otherwise, the smaller pie will mean that the current > > employees are kept at the current level of productivity > > and wages are reduced, or the current workforce is > > reduced and and the current level of productivity is > > increased. Part of this equation can include the > > additional income / capital acquisition which can > > come from an ownership stake either gifted to employees > > by the state or acquired by the employees with credit > > made accessible to employees by the state. > > 3. Negotiate a voice in the long term strategy of the > > company. One possibility is majority employee ownership, > > but depending on co-determination laws in a particular > > country, this may not be the only option. > > 4. Negotiate the ability of the union's membership to > > acquire capital in the privatization deal. This can > > include the gifting of some or all of the state's > > ownership to employees (a taxpayer subsidy), and/or > > providing the employees with access to credit to > > purchase the enterprise at a market price (one which > > can be repaid out of the future earnings). At a > > minimum, any enterprise capital to be financed out > > of future earnings should be sold to the employees > > (and possibly the broader community). The only reason > > to seek private investors should be where additional > > investment is needed for expansion, modernization, etc. > > Just as the employees are getting a market return on > > the value of the existing assets in order to repay the > > acquisition loan, the private investor should get a > > market return on the additional assets brought to the > > company with her or his investment. > >C. In some cases, a state-owned enterprise is a profitable > > entity to begin with and actually subsidizes the state > > coffers. In this case, there is no question about the > > feasibility of the new business. Union leaders should > > organize an employee buyout just as they would when any > > profitable business goes on the market. > > > > I look forward to hearing from others on where my opinions > >here make sense, and where (and why) I am off base. > > > > Thanks > > > > > > -- > >Dan Bell > >International Program Coordinator > >Ohio Employee Ownership Center > >Kent State University > >Kent, OH 44242 > >(330) 672-3028 > >(330) 672-4063 fax > >dbell@kent.edu > >< http://www.kent.edu/oeoc/ <http://www.kent.edu/oeoc/> > > > > >
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