Businesses, Unions and Americans need new innovation in our businesses.
American businesses and unions continue their age old attacks on each other, while disregarding what is in the best interest of all. These need new thinking and innovation by Congress.
Even now, UAW and Big 3 vehicle makers are busy attacking each other with the same old lines of pay us plenty, while the other does not want to pay anything.
Then we have companies like Boeing, L-Mart, Ball, Construction companies, etc that are working to kill off their unions. Multiple airlines did that, ran up their stock prices so that the C*Os could cash in their options and then bankrupted. These airlines, along with AA’s CEO Robert Crandall, shows the way to solve this.
Robert Crandall ran American Airlines from '82 though '98. In that time, he worked with the unions and treated employees decently. His #1 point was that executives should NEVER be allowed to own publicly traded stock in the industry, and IIRC, that managers should not have publicly traded stock in the company. That makes perfect sense. When executives are given bonuses based on publicly-traded stocks, then they will go to great lengths to raise stock prices and not worry about the long-term viability of the company. What is needed is to have at least a private stock that is owned by all of the employees, including through the C*Os, while public stock is to remain with investors. Simple as that.
Create a new business structure with tax laws and regulations that require major-owned by employees (no less than 50% + 1 share ). In particular, it should encourage unions to create their own companies that do not compete directly against the companies that they work at.
Obviously to make this happen, there needs to be various other structures, regulations in place on this, so let me propose this:
1) Call this EIC as an Employee Incorporated Company.
2) the EIC will have 51+% of the stock issued as privately traded, and can only be owned by employees or ex-employees.
3) Executives/managers must have less than 25% of the total stock in the company.
4) When dividends are paid, they are paid the same on all stock (employee and investor or private and publicly traded).
5) The company may not be bought by or merged with another unless both are an EIC, or will be converted to 1.
6) 51+% of the directors must be from the employee side.
7) This needs a tax/legal structure that makes sense. So, what would make sense is to push Congress to do this with a very simple tax structure: 5% VAT to the federal government. Ideally, states would do the same thing. And dividends are to be treated/taxed like wages/salaries. I would push this further and state that this company structure is NOT to be treated as a person. A sane person is capable of reasoning and normally has at least a minimal set of working morals. Companies have neither.
So, why would a union want to do the above? Because it would allow them to go into arenas that the unions are not in. It would also allow unions to be more independent of the employer. When C*Os are given large stock options, then nearly all will work to increase stock prices so as to sell it, while ignoring the long-term care of the company. GE, HP, IBM, Douglas corporations, Nearly all of the airlines at one time or another, and many others are great examples of this. Ideally, unions starting their own companies would actually pay themselves LESS, not more, but would accumulate private company stock that pays out when dividends are paid. That goes on after you retire. The employee could always sell the stock back, however, it will revert to the company upon their death.
How about a start-up? Obviously, the early investors, including executives, founders, etc would likely reward themselves with stock options that will be exercised after an IPO. After the IPO, the employees, including the executives, would be able to sell their public stock, but would be prohibited from buying any more directly. From the IPO forward, the employees would only be rewarded with private stock and dividends.
So, how can this idea help with UAW/Big 3?
How about if they make a deal that the union(s) will create 1 or more companies that deal with part production and the big 3 will agree to buy those parts with up to a an initial 30-50% difference over foreign part makers for up to 10 years. Though, I would encourage that 30-50% difference to drop each year. After that, the union-owned companies have to be fully competitive. In return, the automaker gets to move to EVs quickly and will need to use a great deal more robotics. That will mean lay-offs which these ppl would then go to the union part companies.
Note that this is a win-win-win for the businesses, unions and America.