Labor Research Review, Volume 1, Number 06 (1985)

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Labor Research Review, Volume 1, Number 6 (1985)

Workers as Owners

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    Debate: Reply to Swinney
    Slott, Mike (1985-04-01)
    [Excerpt] Dan Swinney's response to my article is flawed in three respects. First, Dan doesn't adequately address the theoretical arguments and empirical data I presented to support my position. Second, he misrepresents my views at several points in his article. Third, his notion of worker ownership as a tactic begs the question of what sort of strategy or general direction the labor movement needs.
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    Debate: Worker Ownership: A Tactic for Labor
    Swinney, Dan (1985-04-01)
    [Excerpt] Two years ago Taylor Forge, a subsidiary of Gulf + Western, I closed. I had worked there for almost eight years as a production I machinist, and I was Grievance Chairman of United Steelworkers Local 8787. During the last two years before the doors shut, G + W I had demanded concessions as a trade-off for the "possibility" of job security. By that time, through our own research, we knew we were victims of G + W's "milking" strategy. Concessions wouldn't have saved jobs. They would have just increased the demoralization and financial strain on our members as the place went down. We didn't grant concessions. The factory died department by department and order by order, led by a smart-ass company accountant who was hated by his own management team as much as by the workers. It was common to hear on the floor, as workers watched the source of their income and pride collapse, "We could run this better ourselves without them." When you looked at the probable 20% profit rate that G + W expected from Taylor Forge, the policy for maintenance and inventory geared to draining rather than maintaining, the enormous morale problems, and the incredible mismanagement contrasted to the skill,commitment and; knowledge of a veteran work force—workers' capacity to run it better wasn't an idea that was out of the question. Certainly difficult, but not impossible. But this was an option that neither my local nor myself knew much about at the time.
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    Who Will Benefit from ESOPs?
    Rothschild-Whitt, Joyce (1985-04-01)
    [Excerpt] In the past decade, the number of worker-owned firms or ESOPs (Employee Stock Ownership Plans) has been growing geometrically. The national law granting tax incentives to ESOPs was passed in 1975, and since then several other pieces of legislation promoting employee ownership have passed at the federal level and in eight state legislatures. As a result of the technical assistance and industrial revenue bonds that some states now provide for ESOP development, and as a result of demonstrable tax, productivity, labor relations and even marketing advantages, business has taken note of the ESOP option. Several thousand ESOPs have started and scores of reports on employee ownership have appeared in the popular press and in business and trade publications.
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    Debate: The Case Against Worker Ownership
    Slott, Mike (1985-04-01)
    [Excerpt] Let's not underestimate the problem we face. American employers may not have a solution to the long-term crisis of the world economy, but they have developed a coherent strategy to weaken the labor movement. Through a combination of concessions bargaining, plant shutdowns, capital mobility, and probusiness government policies, they have succeeded in intimidating unions and dividing workers. As a result, the labor movement grows weaker, and workers lose what little protection they now have for their standard of living and basic rights. Unions will become a marginal force in society unless the labor movement develops a viable strategy for responding to these employer attacks. The current program and policies of most sections of the trade union leadership are clearly inadequate. The labor movement urgently needs a new strategy.
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    ESOPs & CO-OPs: Worker Capitalism & Worker Democracy
    Ellerman, David P. (1985-04-01)
    [Excerpt] The broad purpose of the labor movement has always been to further the economic self-determination of workers, to maximize working people's control over their economic destiny. Self-determination is the goal, but what are the means? In the past and present state of capitalist society, the only real opportunity for most people to earn a living is by selling their labor as an employee to some employer. In that historical situation, workers can best promote their self-determination through unionized collective bargaining with their employer. Collective bargaining is the best means at hand, but it is only a means, not an end in itself. As the economic situation changes, new opportunities arise. In some cases, workers can break out of the employees' role and achieve the status of worker-owners of their business. Labor can hire capital (instead of the reverse). In this newfound role, the workers can have much greater powers to control their own economic destiny, to promote their own self-determination. But worker ownership also presents a whole new set of problems and challenges. The purpose of this paper is to analyze the two major forms of worker ownership in view of the overall goal of the labor movement, to promote democratic self-determination in the workplace.
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    Why We Opposed the Buyout at Weirton Steel
    Lynd, Staughton (1985-04-01)
    [Excerpt] On March 2, 1982, the National Steel conglomerate announced that it would make no further investments in its Weirton Steel division because a higher rate of profit could be made elsewhere. In the same press release the conglomerate suggested that the 11,000 employees of Weirton Steel buy the mill themselves. Unlike the steel mills that closed in Youngstown from 1977-1980, the Weirton mill was relatively modern and was making a profit (1% on 1981 sales of $1 billion). Continued operation of the facility made sense.
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    Valley of Steel
    Stout, Mike (1985-04-01)
    A song by Mike Stout.
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    Lessons From Three UAW Locals
    Livingston, Craig (1985-04-01)
    [Excerpt] When plants close down, workers are usually desperate for a remedy. In these tragic circumstances, the prospect of a worker buy-out to keep the plant operating has overwhelming appeal. The role unions play can determine whether or not the rescue attempt is successful. If unions stand on the sidelines debating the merits of a buyout attempt while financiers and corporate managers put together a deal, they will pay dearly for their passivity. If they take the lead in organizing the rescue attempt, however, they can create viable enterprises that will give their members job security.
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    The Hyatt-Clark ESOP: An Interview with Jim May, UAW Local 736 President
    (1985-04-01)
    [Excerpt] In August 1980 General Motors announced that it was closing its Hyatt Roller Bearing Plant in Clark, New Jersey The union leadership at United Autoworkers Local 736, which had a history of militancy and a better-than-standard local contract, immediately mobilized to try to talk GM out of its shutdown plan. Jim May, UAW 736 president, was—along with Chief Steward Jim Zarello—one of the principal architects of the worker buy-out at HCI. Besides being local union president, May is also on the company's board of directors. Labor Research Review interviewed May in late December 1984, shortly after his local negotiated a new 3-year contract with the company its members own.
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    A Lost Dream: Worker Control at Rath Packing
    Redmon, Gene; Mueller, Chuck; Daniels, Gene (1985-04-01)
    [Excerpted from Introduction by Gene Daniels] The story of Rath Packing Company of Waterloo, Iowa, is alternately a model of the American Dream and the story of a dream turned nightmare. Started in Iowa in 1891 with a work force of 22, Rath employed 8,000 people at its peak. In 1944, workers at Rath slaughtered 12,000 hogs, cattle and sheep a day. It was the largest and most modern packing house in the world. In the 1950s and early 1960s, however, Rath's management failed to make several strategic moves. They failed to market Rath's products to supermarkets, thinking "Mom & Pop" stores would remain the backbone of community grocery shopping. Little attention was paid to the growing conglomeration within the meatpacking industry itself And, management failed to re-invest in new machinery and processes and failed to build a new facility like the single-story buildings being constructed by competitors. All these factors combined to provide Rath with short-term prof its and long-term headaches. By the 1970s the company was in deep trouble.