As some of you may remember, the Foundation for Enterprise Development is supporting studies on employee ownership and various employee-ownership topics at a variety of universities. Many of them are case studies on companies that have been successful implementing employee ownership that consider how they did it. Three of eight different programs we are sponsoring to do this are here in San Diego — one with the University of San Diego (USD), one with San Diego State University (SDSU), and one with the University of California, San Diego (UCSD). We met on Monday with representatives from the USD program and reviewed their status — it looks like they’re off to a good start. We plan to have a symposium here in San Diego later in the year to get all the participating universities together. Stay tuned for further information. There will be a public panel discussion as part of this symposium.

I can’t help mentioning my concern about the government bailing out the likes of General Motors and Chrysler. I suppose the experts know what they’re doing, but it seems to me the solution is bankruptcy and reorganization rather than continuing to pump taxpayer money in. While reorganization is now occurring at the top of GM, I have no idea what is going on at Chrysler. Good old Ford, I’ll always buy their products.

– Bob

6 Responses to “Studies on Employee Ownership, Concern About Bailouts”

  1. 1 Blake Escudier

    Dr. Beyster,

    I find it interesting that GM asked everyone to take pay cuts – yet the employees get nothing in return (ie. ownership stake). If an employee owned company were to have employees take pay cuts – the benefits of the turnaround will come back directly to them in the form of profit/equity. Within a publicly traded company the turnaround, while keeping employee jobs, will benefit outsider stakeholders.

    Then again – we can’t forget the hundreds of thousands of jobs that are dependent upon large companies staying viable (suppliers, vendors, and community economies where employees live).

    Didn’t an airline, a decade or so ago, ask pilots and unions to take pay cuts in return for equity?

    Seems that a financial dynamic environment offers an opportunity for consideration of an employee ownership strategy.

    Also – remember that if GM and Chrysler do go through bankruptcy and return as financial and operational leaner organizations – they may have strategic advantages over Ford which kept paying their dues. But the one advantage Ford will have – image.

    Blake Escudier

  2. 2 Jean Nagle Sumi

    Bob: I agree with you about the bailouts and according to the news this morning the President is leaning towards bankruptcy and reorganization. I continue to enjoy your blog. Jean

  3. 3 Dr. Beyster

    Jean: Thanks as usual for your blog posting. Where do you live nowadays? Do you still live on Grosse Ile, or have you moved to Grosse Pointe? I suspect that whole region is in sort of a depressing frame of mind because of the problems with the auto industry. — Bob

  4. 4 Dr. Beyster

    Blake: On the issue you brought up about Ford’s competitive position being impaired because of the government’s continued subsidy of GM and Chrysler, it’s not clear how that will shake out. It appears to me that the two companies will have to declare bankruptcy, and Ford will come out very well indeed, particularly from an image standpoint. Time will tell. — Bob

  5. 5 Jim Poulos

    Go Ford. I own three cars (two hybrids and sport trac) from this company. Could not be happier.

    Go to all of you with a stake in your futures!
    jim Poulos

  6. 6 Dr. Beyster

    Jim: Thanks for your post. I have a 2006 Lincoln sedan. It’s a wonderful car, no troubles at all. And I’m impressed with Ford’s begin able to handle its affairs as well as it does in these lean times. Much of the credit goes to CEO Alan Mulally, who set up a $23 billion loan package with the banks soon after he took over the company in 2006. I know Mulally from his time as an executive at Boeing. He’s a super-straight, exemplary guy. I hope the unions relent enough in their financial demands with Ford so they can compete with the Japanese car companies. I’m not sure they’re going to do that though. — Bob

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