Chrysler and Employee Ownership?
For the first time since the economic challenges hit the world, official Washington is looking to employee ownership in a unique form at Chrysler and GM -- employees will have a stake in the company.
This is good news and bad news.
Good news in that it shows a psychological and philosophical acceptance of employee ownership in some form as the desired outcome under certain circumstances.
Bad news in that it is not an ESOP. And, like many of the ownership schemes established in very distressed companies, the outlook is problematic for those companies.
ESOP advocates should not break out the champagne, just yet.
If you would like to read more about the Chrysler and GM deals, click on the links below.
Bloomberg
UAW Said to Get 55% Chrysler Ownership, Board Seats
By John Lippert and Mike Ramsey
April 28, 2009
The Wall Street Journal
UAW to Get 55% Stake in Chrysler for Concessions
By ALEX P. KELLOGG and KRIS MAHER
April 28, 2009
The New York Times
G.M.’s Latest Plan Envisions a Much Smaller Automaker
By BILL VLASIC and NICK BUNKLEY
Published: April 27, 2009
Comments
1. Susan Dodge said...
Sunshine Dodge is a dealership that not many would have heard of. Sunshine Dodge was among the dealerships closed by Chrysler as they entered bankruptcy. The owner, George Joseph, has posted an open letter to Chrysler, in which he explains his situation. His inventory will be taken and redistributed, including vehicles and parts, and he won't be getting any compensation. The guaranteed loans he got to renovate the dealership at Chrysler's request won't be paid off by the company, and he'll be left holding the bag. This more or less means bankruptcy for him and his family, unemployment for his employees, and no debt consolidation for Sunshine Dodge.
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