Next step: worker ownership?

...Sharing ownership provides a very direct and positive means to give workers a reason to cooperate...

...Hovering over these infested private worlds is the doomed author himself, passionately recreating his own alienation...

...Sugar...

...If the essence of "capitalism" is the individual ownership of capital, and the essence of "socialism" is its "social" ownership, then the essence of "equitarianism" is the equita- ble (not necessarily equal, but equitable) ownership of wealth...

...The effect of this is that a company can have the trust borrow funds, which the trust then uses to buy newly issued or existing shares of company stock...

...While the effect on productivity of ownership without control is still not clear, the ability of employee own- ership to transform the labor/management system is limited by this separation of ownership and voting rights...

...This growth/equity tension has become integral to our labor-management system, with managers insisting on the need to restrain equity (better wages, working conditions, etc...

...magazine as among Ameri- ca's fastest growing companies, while Industry Week honored W.L...

...He's so meticulous in revealing the way an alcoholic moves and speaks --erratic rhythms, blurred gaze, lumbering gait, sudden leaps of bile, bemused private monologues, the char- acter communing with his own inner voice -- that people have asked Huston if his actor was actually drunk...

...They would prefer to get these benefits without sharing ownership...

...Aside from this, many owners prefer to sell to their employees, and maintain their firm's identity, than to sell out to someone else...

...Newer plans are more democratic, and some older plans, having become accus- tomed to employees being owners, are now taking the next step of providing them with more of a say in the company...

...Coif- fed and dressed like a high fashion model Bisset is inappropri- ately elegant, and she has no assurance as an actress, no emotional resources: she's exquisite and totally inexpressive...

...The owner then pays only low capital gains tax on the sale (other sales of stock back to the company normally require the payment of ordinary income tax, which is 2.5 times as high as capital gains tax...

...To Lowry's modernist bravura Huston opposes his seamless Hollywood classicism...

...Most of this has happened within the last few years...

...The stock is allocated to tax deferred accounts of individual employees, with (in most cases) all full-time employees having worked a year or more receiving allocations...

...That, of course, is exactly what most people say American companies need to do...

...Lowry fans will inevitably be disappointed by the missing pieces, while to moviegoers unfamiliar with the novel or its cult reputation, the picture is likely to appear fragmentary or perhaps even incoherent, an oblique story of a tiresome drunk...

...otherwise, each sees the other's goals as inimical...

...Moreover, employee own- ership is not the same thing as employee control...

...More significantly, perhaps, it fits society's needs...

...Pri- vately held companies must, by law, repurchase the shares of departing employees (otherwise, there would be no market for them), a liability that can be substantial for some fhans...

...Recent studies support this notion...

...Huston and his scenarist, Guy Gallo, have turned the novel upside down...

...Research at Cornell University and the National Center for Employee Ownership, however, shows that employee buyouts of failing firms have had a dramatic impact...

...it has been expounded with great insight by Louis Kelso, San Francisco attorney and investment banker who popularized the idea's most effective incarnation, and who created some of its practi- cal adaptations...

...Rea- gan went on to urge the wider use of employee ownership as a solution...

...Management grasps for short- run profits in response to the demands of its shareholders (who, after all, have no reason to look towards a firm's long-term growth when they can buy some other stock with better short-run prospects...

...The most celebrated use of em- ployee ownership is to buy companies that would otherwise close (such as Weirton Steel) or to provide employees with a share of the company in return for wage concessions (as at Eastern Airlines...

...Winston Churchill S INCE THE nineteenth century, the prevailing assumption has been that there are two ways "the means of produc- tion" can be owned: by the state or by a limited number of individual and institutional capitalists...

...Although it is true that only a minority of firms are actually controlled by their workers, and most firms do not even allow workers to vote their shares, it is also true that the chances of an employee's being able to have a say in company affairs is infinitely greater in employee own- ership companies than conventional companies, where such opportunities almost never exist...

...Under this assumption, the empirical truth of Churchill's aphorism has been all too apparent...

...As it weaves among the perceptions of four characters during what turns out to be the last day in the lives of two of them --the alcoholic British consul Geoffrey Firmin and his divorced wife Yvonne current images trigger a network of memories...

...Huston lets his actor take off in two scenes, a wry comic interlude with a stuffy British tourist where Finney strikes echoes of Ralph Richardson at his most deliciously droll, and a poisonous outburst where the consul lashes Yvonne...

...Concentrated power is the enemy of liberty and the rights of man.., and in any society social and political power flow from economic wealth...

...The company now has the money (or the sellers of the stock do), and the trust has stock...

...The list goes on...

...A University of Michigan Survey Research Center study, for instance, found that employee ownership companies were 1.5 times as profitable as conventional firms, while a study re- ported in the Journal of Corporation Law found these firms had twice the average annual productivity growth rate of conventional companies...

...In an ongoing research project designed to determine what makes employee own- ership work or fail, two factors seem especially important in assuring success: contributing substantial amounts of stock on a regular basis, and really believing that employees deserve to be owners...

...Employee ownership also makes sense for labor relations...

...As far back as 1975, a Peter Hart poll found that by a 66-25 percent margin, Americans would prefer to work for an employee-owned company...

...In both cases, employees are unlikely to begin think- ing of the company as "theirs...

...Today, employee ownership may just help bring us back to our roots...

...For an employee who stays with a company for twenty years and earns an average of $20,000 per year, that can mean $100,000 or more if the company's stock value grows at 10 percent per year...

...Employees also own I00 percent of Pamida, one of the Great Plains' largest retailers, all of U.S...

...Lowry's voluptuous book is dense with symbols and mythic overtones while Huston is an imperturbable realist who blandly denudes such motifs of poetic resonance as the vol- cano, a reappearing white horse, and death masks...

...and .9 To save a failing fLrm...

...Finally, a National Center for Em- ployee Ownership study found that companies with a majority of their stock owned by employees created three times more net new jobs per year than comparable conventional firms...

...And yet like Remembrance, like Ulysses, for that matter like Moby Dick and Wise Blood which Huston tried and failed to wrestle into film shape, Under the Volcano is exactly the kind of novel which will resist translation: what it has to say is inseparable from its literary form...

...In effect, this means the company is deducting both principal and interest, not just interest, from its taxable income...

...First, as noted, there are legal costs and other financial drawbacks...

...And where Lowry calls attention to his ingenuity, Huston is stubbornly self- effacing...

...Chamber of Commerce, the House Democrats, Ted Kennedy, Russell Long, and the Pope have endorsed it...

...Whether it will represent a significant part of our future re- mains to be seen, but it is clear that it represents one possible, logical response to current dilemmas...

...Finney may well be the most modest of the great British character actors...

...Where Lowry's language heaves and swells, Huston's approach is lean to a fault...

...Socialist economies have, for the most part, simply been unable to match the economic growth and dynamism of capitalist ones...

...The term may be new, but the idea is not...

...They own 100 percent of the tenth largest steel firm (Weirton Steel), most of one of the largest engineering firms (Raymond International), 70 percent of a Fortune 500 textile f'Lrm (Dan River), and 43 percent of the largest sugar producer (U.S...

...It has received considerable media atten- tion, and has broad political support...

...It no longer seems to...

...a way that increases economic efficiency -- not at the cost of equity, but as a result of it...

...9 As a means to borrow money...

...Finally, unions have been ambivalent towards the concept, much as they Were toward pension plans in the twenties...

...Calls from both sides for "cooperation" only seem effective when entire enterprises are threatened...

...There are financial drawbacks as well...

...Second, companies with high employee turnover, or whose managers just cannot see sharing ownership with employees, are poor candidates for a program based on retain- ing employees and giving them more of a role in the company...

...Like Remembrance of Things Past, Lowry's monumental book has long been a Mount Everest that filmmakers ha~e wanted to scale...

...Over fifty thousand jobs have been saved in the process...

...The unique appeal of employee ownership as an approach to the equity problem is that it contributes to eco- nomic growth, rather than sacrificing it, as other approaches have...

...Although some of the largest employee ownership plans have been created this way, this approach only accounts for 2 percent of all plans, the large majority of which are set up in very successful firms...

...News and World Report, and 90 percent of the Journal Company, owner of the Milwaukee Journal, the Milwaukee Sentinel, and several other firms...

...These studies are still preliminary, but they are suggestive...

...By constantly attempting to redress capitalism's inequities, government has reached a point where almost all of us feel "entitled" to one government program or another...

...As a result, according to a recent New York Stock Exchange report (People and Productivity, 1982), our use of human resources is falling far short of what it should be, making it increasingly difficult for American f'ums to compete worldwide...

...It has been tried in various ways, in various places, for centuries...

...Lowry hasn't written other characters for his alter ego to play against, and Huston hasn't helped by casting Finney opposite Jacqueline Bisset and Anthony Andrews (as the consul's half-brother Hugh who has had an affair with Yvonne...

...The company makes tax- deductible contributions to the trust sufficient to enable it to repay its loan...

...Only about 30 percent of the plans allow employees to vote the stock allocated to them (in the rest, a trustee votes it at the direction of management), although 60 percent of the majority employee-owned firms do, as do virtually all of the larger companies...

...it's hard to see him at all beneath the masks he builds for his characters...

...It's here that we see fleetingly the character's gnarled torment, the self-created hell in which he inevitably drowns...

...His neutral, eye-level camera stares at them as if they are laboratory specimens...

...labor/management system has become less flexible, less com- petitive in worldwide markets...

...Still, for many companies, employee ownership is a very attractive financial option...

...Of the approximately sixty-five com- panies that can be classified as buyouts, only five have sub- sequently failed (although two others are in Chapter 11 reor- ganization...

...Because Anthony Andrews is equally hazy and mute, impor- tant contrasts --Hugh's political idealism and Yvonne's romantic longings pitted against Geoffrey's voracious cyni- cism --evaporate...

...Under the Volcano is Lowry's one sustained achievement, a testimony rescued from the ruins of his alcoholism, and it is written as if the novelist's life is indeed on the line...

...His character, as Lowry intended, is bent on befouling himself and the woman who has been foolish enough to love him...

...Ronald Reagan, the New York Stock Exchange, the U.S...

...Workers, on the other hand, are more concerned with the future of their jobs than their stock dividends, and would, logically, be more disposed towards making long-term investments at the cost of short-term profits...

...Among employee benefit plans, only an ESOP can borrow money...

...Em- ployee ownership plans are also expensive to install and ad- minister...

...Employee ownership companies are more likely to have ' 'quality of worklife' ' or other kinds of shopfloor participation programs...

...9 As a means to create a market for an owner's shares...

...At the same time, our I I COREY ROSEN is the executive director of the National Center for Employee Ownership, a non-profit, private research organization located in Arlington, Virginia...

...To remove the author as the conductor of his own inner epic, as any film must, and to separate the characters from their inner monologues, is to strip the work of its validity...

...companies have set up plans to share ownership with their employees...

...During the last ten years, over six thousand U.S...

...Gore Associates, a two-thousand employee, 95 percent employee-owned, high-technology manufacturer, as the com- pany with the best management of people in 1983...

...Employee ownership has received impressive support from society and government as well...

...Unfortunately, as industry supplanted agriculture as our primary economic activity we lost that notion...

...When the three actors are on screen to- gether, there's no tension...

...They do not trust management enough to believe that such ownership is not simply another way to coopt workers...

...It is an approach that is responsive to other changes in society and the workplace, and it is making workers the owners of their companies...

...Many other firms contribute relatively small amounts of stock (38 percent contribute less than 10 percent of annual compen- sation...

...If a company issues new shares to a plan, current shareholders suffer a dilution, although, in theory, the greater employee motivation and the financial benefits of the plan will more than offset this...

...On a day-to-day basis, these opportunities may be even more important to workers than being able to vote their stock...

...COREY ROSEN "The great failure of capitalism is that not all share in its beneficence, and the great failure of socialism is that all share in its misery...

...The space between them doesn't crackle with the weight of their entangled pasts and of the...

...With an ESOP, an owner can have the company make tax-deductible cash contributions to the trust, which then buys the owner's shares...

...Since companies can simply print new shares of stock (diluting the ownership of existing owners), and then deduct their value from their taxable income, an employee ownership plan provides an inexpensive means for providing an extra benefit...

...Moreover, research shows that the percentage of employee ownership companies allow- ing this kind of employee input is growing...

...The system worked reasonably well for much of our first two centuries...

...To conservatives, having employees become owners is the ultimate in capitalism...

...There are drawbacks, of course...

...As Ronald Reagan put it in a 1980 letter to a New Orleans newspaper, "could there be anything resembling free enterprise if wealth and property were concen- trated in the hands of a few...

...Screen DOWN & OUT IN MEXICO 'UNDER THE VOLCANO' W ITH PERVERSE perfection John Huston has made a film of Malcolm Lowry's Under the Volcano that seems guaranteed to please no one...

...Still, the prospects for employee ownership are encourag- ing...

...and time itself seems lost in thought...

...Often photographed against walls or in cramped spaces, they seem trapped by the director's steady, pitiless, finally accusing gaze...

...Many unions are more comfortable with their accustomed adversarial pos- ture...

...Scrutinized by the relentless close-ups, the actors have to carry the show, and Albert Finney as the soused, terminally embittered consul is indeed prodigious...

...B Y SHARING OWNERSHIP, society clearly becomes more equitable...

...action is so constricted that a walk from house to garden is a major event...

...Given all this, why hasn't employee ownership grown even faster...

...can be enhanced, tax benefits are created, employees receive important financial rewards, and work is made more parficipa- five...

...Occasionally Lowry's daydreamers come up for air, talking past each other in a way that only enforces their solitude...

...yet capitalism, especially in its more unfettered instances, has tended to create a distribution of rewards most people find inequitable...

...in order to maintain and expand market shares, while workers insist on getting as much as they can...

...Moreover, employee ownership companies are more likely to provide their workers with a significant role in their company...

...Many companies want to provide employees with something more than wages and health insurance...

...Under an ESOP, a company sets up a trust and makes tax-deductible contributions to it of stock or cash to buy stock...

...Where Lowry celebrates subjectivity, Huston is his usual detached self...

...Not every firm realizes the performance gains suggested above...

...When they leave the company, or retire, they receive their stock, and usually sell it back to the company...

...Fourth, any very different new idea faces enormous inertial forces -- "this just isn't the way we do things here...

...So socialist countries dabble in free enterprise, while capitalist countries establish programs to redistribute wealth (social security, medicare, progressive taxation, etc...

...Companies use ESOPs for several reasons: .9 As an employee benefit plan...

...Senator Russell Long convinced Congress to enact legisla- tion providing tax incentives for companies that share own- ership with employees through something called an "ESOP" (employee stock ownership plan...

...ESOPs are by far the most common means to share own- ership, but other approaches, such as worker cooperatives, are growing as well...

...A more competitive world economy seems to favor companies that are more adaptive and flexible, where management and labor work with, not against one another...

...So chaste are his ,methods that he even denies himself atmospheric em- bellishments...

...I EQIJITARIANISM: AN ESOP'S FABLE Next step: worker ownership...

...Broad ownership of wealth is good for the economy, the society, and the polity...

...In the last decade, however, more and more people have been experimenting with a way out, a way that combines social justice with free enterprise...

...Neither side trusts the other enough to believe that anything it does for its adversary will be anything other than a permanent loss...

...Many companies set up employee ownership plans primarily for their own tax or financial advantages...

...Employees acquire a gradually increas- ing right to their shares (a process called "vesting' '), generally qualifying for 100 percent after ten years...

...American firms have exhorted their workers to be more cooperative, but workers often see this as little more than rhetoric designed to secure wage concessions...

...While the tax and financial benefits of em- ployee ownership are significant, an equally important reason for the idea's growth is the belief that ownership improves company performance...

...Business ownership is simply too risky an investment...

...As in the novel, though, the consul is a solo performance...

...Moreover, the same dollars that are used to repay the loan are creating an employ~ benefit plan...

...If a company is not doing well in the short-run, there is little incentive to try to change things...

...He downplays details of weather and landscape: the Mexican humidity that seeps through walls and clothes and that influences the characters' moods, and the lush scenery, are curiously deadpan...

...Employee-owned firms such as Comsonics and Vir- ginia Textiles were listed by Inc...

...The book isn't about what characters do or say, but about how they think and what they see...

...There are important financial benefits for employees...

...and, most importantly, in the last decade it has been tried in the United States with great success and promise...

...Labor seeks short-run gains, fear- ing that if it makes concessions, management will not give them back, and that the concessions won't help anyway...

...It makes more sense to sell and invest elsewhere...

...Among others, employees own or soon will own 10-35 percent of about half the major airlines (Pan Am, Eastern, Western, Republic, PSA, America West, Southwest, People Express, and Continental) and 43-51 per- cent of four major trucking firms (Branch Industries, Com- mercial Lovelace, Interstate Motor Freight, and Transcon...

...to liberals, it is a new and practical way to achieve a better distribution of wealth...

...In many independent companies, retiring owners find there is no ready market for their stock, or for the company itself, even if it is a successful firm...

...Company performance primarily in short-run gains...

...Either way, most people would be employees, not owners, of capital...

...T HE FIRST MAJOR shot of this revolution was fired in 1974...

...In our own country, we seem to be on an endless policy seesaw, sometimes favoring economic growth by encouraging the already wealthy to invest...

...Coating his dialogue with scathing irony, Finney doesn't allow Firmin a single sentimental moment...

...With almost everyone defined as a deserv- ing beneficiary --and few as "worthy benefactors" (tax- payers who pay more than they get) -- it is no wonder that we are unable to control our deficits...

...The companies include everything from small restaurants to industry giants...

...3 For many companies and their workers, therefore, sharing ownership is a "win-win" situation...

...About half the population is now covere~l by state laws encouraging em- ployee ownership, and thirteen federal laws have been passed for the same purpose...

...some- times urging equity by finding a way to redistribute that growth...

...I'll call it "equitarianism...

...Third, the concept is still new and unknown to many people...

...That has been an avowed policy of most of our national parties for decades...

...Avoiding any attempts to duplicate the novel's self-enclosed reveries --there are no voice-overs or narration, and only a few brief point-of-view shots -- Huston remains outside the characters...

...It Offers an equality of gain, not just an equality of sacrifice...

...Employees own anywhere from 1 percent to 100 percent of these firms (the average is about 15-40 percent, with 10-15 percent of the firms having a majority of their stock owned by employees...

...Its growth in just a decade has been impressive, and its success PrOvocative...

...A typical plan provides employees with 10-15 percent of annual pay in stock...