NEWS BLOG (WSAU) In the 1990s United Airlines was owned by its employees. As part of a contract settlement workers got larger and larger chunks of United stock. Eventually they had a majority share. That should be a worker utopia, right? Not exactly. United soon had the highest operating costs in the airline industry. (Why would you put in automated computer-kiosks for boarding passes if that costs a worker a job?) In an industry with relentless pressure to cut costs, that doesn’t work.
Avis Rental Car was also employee owned. They were also undercut on costs by their rivals, and had to merge with Budget or go out of business.
There are a handful of radio broadcasts groups that are owned by their employees. If you’ve worked there for a few years and are considered a ‘keeper’ employee, you’re invited to buy-into the company. This is good and bad. Those workers have very solid job security. But what happens when Jim-the-morning-guy’s ratings start to slip? It’s not so easy to get rid an owner. Suppose one of these stations has an opportunity to become an affiliate of the next-hot syndicated talk show host, but airing the show means firing a local host?
I thought of the employee-owned dilemma when news of The
Lusty Lady came across the news wires today. It’s a topless club in
The sad but true conclusion is this: most of us need a boss, someone to make sure we’re up to the job and to manage and control costs. Employee owned companies usually can’t make the tough decisions needed to survive.