A bid by billionaire Kirk Kerkorian to purchase the financially troubled American automaker, Chrysler, from German owner, Daimler, and include the employees of Chrysler as co-owners fell short on Monday, when an equity firm headed by former Bush Administration Treasury Secretary, John Snow, Cerberus Capital Management won the bidding battle by offering $7.4 billion for the financially troubled company that was once worth $36 billion to Daimler when they first purchased the company back in 1998.
Under the tough politically and financially conservative, John Snow, workers at Chrysler can only expect to face far more wage, health care and pension cuts, and also more job cuts as the company may even be split into profitable portions and then sold to other corporations. Some Chinese automakers have expressed an interest in Chrysler, hoping to gain a foothold in the U.S. market with an established network of dealers already in place. The always profitable Jeep division could even be separated from the automobile divisions, which might be a good formula for a Chinese bid to buy some of the manufacturing plants. But the bottom line is that ownership by an equity capital firm is almost always bad news for workers in a targeted takeover company.
Rather than face an uncertain job future, workers at Chrysler would have been far better off with a buyout of the company using a plan such as employee stock ownership to stake their share in the company. Largest worker owned companies include supermarkets such as Publix, Hy-Vee and Price Chopper. Unfortunately the role of employee owned workplaces is rather limited in the American economy. leaving most employees at the mercy of management in which most don't even have the basic job protections of a labor union to protect their jobs, wages, health or retirement benefits, or ability to bargain effectively with management.
Workers need to organize not only into labor unions to better protect their ability to bargain with management, but by using employee owned stock ownership plans, workers can remove management altogether and become their own masters by controlling their own destiny and employment future. A steady slide in wages and benefits as well as job layoffs is often the other alternative under the private management economic model.
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