Word: worker
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...should he. Bloom is a pioneer when it comes to worker buyouts, in which the employees of a faltering firm buy an ownership stake to prevent plant closings or job losses. The idea of an economy of worker cooperatives may seem utopian, and the notion of using the tools of modern finance to do so absurd. But Bloom and his mentor at Lazard, Eugene Keilin, helped prove it possible—and did so with no less than the largest airline in the nation: United...
...Working as advisors to the pilots’ union, Keilin and Bloom orchestrated a buyout in which United employees, through their unions, bought a 55 percent stake in the company. The results were staggeringly positive. Worker grievances plummeted while the firm’s productivity and profit margins soared. Previous skeptics appeared to be swayed. BusinessWeek devoted a cover story to the success of worker ownership, including praise from sources as unlikely as a Merrill Lynch analyst and an executive at a rival airline...
...United’s buyout was not a fluke. A 2000 Rutgers study showed that worker-owned companies experienced average employment and sales growth that was 2.3 to 2.4 percent higher than non-worker-owned firms. In other words, these companies grow to be on average a third larger than traditionally owned firms over the course of 10 years...
...benefits to workers are just as significant. A study conducted by Washington State University found that hourly wages at employee-owned firms were five to 12 percent higher than those at other firms and retirement benefits almost three times greater in value. Employee culture tends to improve in concert. For example, W.L. Gore, the worker-owned firm that manufactures Gore-Tex, has no formal “bosses” and is routinely ranked by Fortune as one of America’s best companies to work...
...reasons for this success are clear enough. When workers own their own companies, they have an obvious incentive to protect their own salaries and benefits and to create a friendly work environment. But they also have an incentive to protect the profits and overall success of their employers. After all, ownership in a bankrupt firm is worthless. Thus, worker ownership results in firms where the needs of workers come first, but where necessary cutbacks can be achieved as well...