Re: Employee Ownership in Multinationals

[Steve Clem <cclem@kent.edu>]

>X-Originating-IP: [24.4.252.105]
>From: "Don Ward" <donrward@hotmail.com>
>To: cclem@kent.edu
>Subject: Re: Employee Ownership in Multinationals
>Date: Wed, 20 Sep 2000 14:09:17 GMT
>X-OriginalArrivalTime: 20 Sep 2000 14:09:18.0074 (UTC)
FILETIME=[5D7285A0:01C0230C]
>
>Steve: For some time I have liked the idea of bring multinationals who 
>believe in employee ownership to the table. David Wheatcroft and I have 
>talked about what Wal Mart is doing in England. ie distributing stock to its 
>employees there. A retailing multinational like WalMart seems a natural for 
>another reason. WalMart wants to be the biggest retail chain in the world. 
>The only realistic way to do that is to have customers with disposable 
>incomes. Unless their government enriches them, as an inducement to get 
>WalMart to that country, the only way potential customers can get money 
>legally is through profitable businesses or other enterprises which pay a 
>good wage and hopefully provide some sort of stock owning opportunity 
>including ownership of the enterprise.
>
>When I worked, my company was a big WalMart supplier. We were employee owned 
>and I think WalMart only sold or gave stock to employees. However they were 
>big on promoting employee involvment and employee behavior descriptive of 
>ownership. I used to occasionally borrow an idea from them.
>
>If a WalMart would get behind the ownership idea world wide and give 
>supplier preference to those international suppliers who are employee owned, 
>they might give a giant leap to this whole discussion. Companies kill 
>figuratively to be a Wal Mart supplier. An employee owned company is not the 
>worst condition to have to meet to be a WalMart suppliier. A supplier can 
>become very profitable just getting the crumbs off the WalMart table. This 
>does not solve the problem of governments who are privatizing various 
>departments and functions, except that employees of those organizations are 
>also potential WalMart customers and if a WalMart were to lend its expertise 
>in training the organization in how to behave profitably who  knows how many 
>new stores it could open for them. Best of all the employees who work for 
>WalMart would become owners, assuming WalMart did what it did in England.
>
>Note: I am not or have any interest in personally owning any retailing 
>stock. I have had this idea for several months and now seemed the ideal time 
>to open it up. There are downside risks to being a WalMart supplier, as they 
>jockey orders to meet changes in customer demand or reduce in store 
>inventories at the end of a quarter. Others may decrie the impact that a 
>WalMart has on the mom and pop economy. The Brits can attest to that. 
>However, this is the 21st century and globalization is now a way of life.
>
>I will leave it at that.
>
>Don Ward
>
>
>>From: Steve Clem <cclem@kent.edu>
>>To: eotrans@cog.kent.edu
>>Subject: Employee Ownership in Multinationals
>>Date: Tue, 19 Sep 2000 16:17:12 -0400
>>
>>Former NCEO (National Center for Employee Ownership) staff member Veronica
>>Manson, in a 1996 article (which may be found in the NCEO website library)
>>titled "Globalizing Employee Ownership Plans for Multinational
>>Corporations," found that the tendency toward the globalization of business
>>has led to a globalization of the work force, the increased mobility of
>>which has prompted many multinationals to try to maintain uniform
>>employment policies in order to be fair to all of its employees, regardless
>>of where they are stationed.   This has apparently applied to employee
>>ownership plans as well as to more basic benefits and other employment
>>policies.
>>
>>In the U.S., where employee ownership is relatively well-established, ESOPs
>>and other types of ownership programs have been generally shown to
>>stabilize the workforce, lower turnover and motivate employees to "act like
>>owners" when it comes to their own jobs and how they perform them.  For a
>>multinational to implement such a system in its facilities worldwide,
>>however, runs into  problems. Ms. Manson, in the article cited above,
>>listed some features of a new model that may allow the extension of the
>>benefits of employee ownership to employees working in overseas 
>>subsidiaries:
>>
>>      1.  The international ESOP trust is established in            a low- or
>>no-tax country;
>>      2.  The foreign subsidiaries make periodic cash            contributions
>>to the trust to purchase
>>          stock of the parent company;
>>      3.  The shares are then allocated to individual            employee 
>>accounts;
>>      4.  The company can set vesting schedules;
>>      5.  The contributions to the international ESOP            trust can be
>>determined according to
>>          a formula that takes into consideration the            number of
>>employees in that subsidiary or
>>          other factors.
>>
>>Any comments about its workability? Is this something that has potential?
>>Going a bit further, how can we encourage more multinational corporations
>>that employee ownership is a good thing for both them and their employees?
>>
>>
>>
>
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