The machinations over the “rescue” of the US car industry have been spookily familiar for those old enough to remember British Leyland in the 1970’s.
The idea at one point that GM and Chrysler would be merged sounded like the forced merger of Austin/Morris/Rover (BMH) and Triumph/Jaguar (LMC) that created BL in the first place. Now huge sums of money are being offered by the US government to help the companies re-structure similar in some ways to the UK government’s nationalisation of BL in 1975. Indeed it does look like the US taxpayer will own significant ot even majority shareholdings in both companies if the re-structure goes ahead.
What prompted this post is the fact that the UAW, the main union involved, has been asked to take a significant shareholding as well, to recognise healthcare and pension liabilities.
This piece in the FT also points out the key dilemma for the union and its members. Good investment principles for pension funds are to diversify risk, so the shareholding should be sold down as soon as sensible, however the shareholding provides a significant incentive for the staff to do what they can to ensure the successful recovery of the business and continued employment of their members
So will they chose to operate like a worker’s co-operative? Will they learn the lessons of the Meriden Motorcycle Co-operative, again from the 1970’s?
Or will the whole deal fall apart and the two companies go into Chapter 11?GM and Chrysler – Worker’s Co-ops?