Re: HOMESTEAD: Do trusts make workers second class owners?

[LynnRWilliams@aol.com]

I would like to respond/comment concerning some of the recently arrived 
comments, questions etc. on this interesting subject.  I shall do so in the 
order that I received them.

Mbindnerdc - The ESOP experience to which I refer is that of the Steelworkers 
during the devestation and restructuring of the American and Canadian steel 
industries, mostly in the 1980s.  We came to worker ownership in the Union 
primarily through what we called "investment bargaining".  Investment 
bargaining, briefly put, was the idea, in a time when employers were seeking 
concessions, that concessions should be treated as investments and usually we 
postulated three examples of what investment normally or frequently involves, 
which should also apply to workers' concessions - investment requires full 
information about the company, significant investment also brings influence 
on the policies and direction of the company and, again given significant 
investment, would normally entail a seat on the Board of Directors, or more 
than one seat, depending on the size of the investment.  It was a small step 
from that set of ideas to employee ownership where all the ideas of 
involvement, participation etc.potentially come into full play.

What we were essentially accomplishing with the ESOPs, at one point we had 18 
- 20 of them, was enabling fairly marginal operations to continue which 
otherwise appeared to be about to shut down.  We were involved in a strategic 
argument with some of the major players in the industry about whether or not 
we should be fighting to preserve as much of the industry as possible, which 
was the Union's position.

The point of all this background is that we had a variety of enterprises, a 
variety of provisions and a variety off results.  We did enable a number of 
operations to survive, and even if they were bought out as a numnber were, 
worker owners received considerable compensation for their stock.

I don't think there is the slightest doubt, although I am not aware that a 
specific study has been done, that in "our" ESOPs there was more emphasis on 
training, more eqitable distribution ofprofits when there were some, some 
moderation of CEO salaries.  The question about innovation is interesting, 
there should have been an impact.  The Union's view was that participative 
work organization was particularly important in worker owned organizations, 
which kind of high performance organization should have a positive impact, 
not just on the improvement of operations but on innovation as well.  At the 
same time, one of the greatest challenges was and is finding managers who 
both know steel and are also are sensitive, democratic and understanding 
enough to lead and nourish participative approaches.

Most of our ESOPs began as majority owned but an interesting line developed.  
The capital intensive parts of the industry, such as basic steel, where they 
were involved often had to give up majority control to raise the money 
necessary for capital investment - this happened at both our largest employee 
owned operations, Republic Engineered Steels in the US and Algoma Steel in 
Canada, as well as at the Independant Steelworkers represented mill at 
Weirton, WV.

Shann - My suggestion is that Deb, who is a lawyer, or the Ohio Center who 
pull so many threads together, or certainly Jeff Gates, who helped write the 
law in the beginning, can collectively or invividually provide you with the 
words.

MaarjorieHK - It is probably to obvious to mention, but United Airlines seems 
to meet your requirements.  They certainly don't provide a full model for the 
employees' role in the ideal participative work place, either at the shop 
floor, or the board rooom, or in between - but in a very unlikely industry as 
most of us would think of it, they provde very significant employee - union 
input in the board room, veto power over the appointment of a CEO (broadly 
applied, that alone would revolutionize the American workplace).  I wish I 
knew who else is in the 100 list, so much is counted in America as employee 
owned that hasn't much organizational substance to it.  There are certainly 
many smaller, majority owned ESOP enterprises where employees have a 
significant role in deicision making, which companies are also quite 
successful.

Hope some of this helps a little.

Lynn