Under Lynn William's leadership as president of the United Steelworkers of America, the Steelworkers became the most innovative and proactive union in North America in using employee ownership to secure thousands of jobs that were otherwise seriously in jeopardy. Here are Williams' reflections on this experience as presented to participants at the 14th Ohio Employee Ownership Conference.

I have made it a rule to speak only about what I know or have reasonably well-informed opinions about, based on my own knowledge and life experiences. In the area of employee ownership, there is much that I do not know. I have not worked through the daily challenges of leading, managing and participating in an employee-owned enterprise. I have not participated, except in the most general overview kind of way, in the nitty-gritty of putting together the financial arrangements necessarily involved in creating such enterprises. What I have done is to think a good deal about how all of this fits in with the fundamental objective of the labor movement, which is to be an instrument through which working people can create the best possible quality of life for themselves, their families and our society. I have also tried to encourage our Union to seize on the possibilities and be willing to work with our members to help them find their way in relatively uncharted waters.

The Beginning of USWA Involvement
The Steelworkers' incursion into employee ownership was the direct result of the devastating shut-downs, layoffs and mill closings, euphemistically identified as "restructurings," that took place throughout the steel and metal industries in the 1980s. Hundreds of thousands of our members lost their jobs. Thankfully, the Union had negotiated many special early pension provisions, albeit for other purposes rather than in anticipation of an industrial disaster, which provided something of a cushion for many of the more senior employees. We also utilized Trade Adjustment Assistance and other training and retraining programs on behalf of our unemployed members to the maximum extent possible.

At the same time, however, we had profound concerns about the future of the industry itself. What kind of America could there be, that had little or no capacity to manufacture steel and metal goods, such as consumer products, industrial machinery, tools and equipment and the like? The public policy, financial and internal structural issues around this question continue to be with us to this day.

As for the Union, we were and are vigorously on the side of maintaining and building manufacturing capacity, not merely in terms of creating good and satisfying jobs, but also in the interest of maintaining a prosperous America for all our citizens. Technological change will undoubtedly continue to make it possible to create units of goods with fewer hours of work, but the ability to produce goods remains fundamental for much of the work and job creation that takes place in our society.

Employee ownership quickly emerged during the crisis in steel as one means by which manufacturing capacity, which otherwise might be shut down, could be saved. At first, the Union greeted the idea with skepticism. Our President at the time, the late Lloyd McBride, was concerned that we not add false hope and additional economic cost to the tragic circumstances to which so many of our members were being subjected. At the same time, he had a vision of what might be accomplished through employee ownership and asked our chief economist, the late Jim Smith, to investigate the possibilities. Jim did so with his customary intensity, intelligence and enthusiasm, found Gene Keilin, and the Union proceeded to adopt employee ownership as one in our array of responses and initiatives in coping with the crisis in steel.

In my view, our initiatives in this regard accomplished a great deal. We saved a significant number of enterprises which, in all likelihood, otherwise would have disappeared. Some didn't make it over the long haul in the face of trade crises in steel including the most recent one; others converted back to traditional ownership but with buybacks of stock from the employee owners; some which had been majority-owned became minority-owned; and a number have survived to this day.

We learned a great deal from the experience, some things by way of reinforcement of earlier views, others as fresh insights. For example, we developed a heightened appreciation for the importance of management skills. To locate and hire managers, who combine the necessary skill and knowledge with the sensitivity necessary to work with employee owners, has been one of our greatest challenges.

Similarly, the importance of participative work organizations and decision-making structures across the enterprises cannot be overemphasized. I believe that while these mechanisms make a significant contribution to the efficient and effective functioning of any organization, they have a particular cogency in the context of employee ownership. As another element in these same considerations, full democratic governance practices are critically important to the Union's perspective toward worker ownership. To us, far more is involved than simple financial sharing in the benefits which accrue to capital as well as those which accrue to labor, not that it is of no consequence. But one of the exciting opportunities employee ownership presents is to reach a new and higher level of economic democracy, a long-time labor objective, which clearly could not be achieved in the absence of democratic governance practices such as board membership and pass-through voting rights.

Communication and Economic Democracy
Communication was a lesson that we learned all over again. It seems there never can be too much information sharing. One element in the crises of the 1980s was the contradictory views among many of our own people concerning employee ownership. On the one hand, there was the desperate attraction to something which could conceivably save their jobs; on the other hand, there was the enormous frustration of going down an unknown and perhaps treacherous path rather than continued employment with the previous employer. It required a massive amount of communication to ensure that everyone clearly understood what was happening and what was being proposed.

Of course, the Union brings some of its own particular concerns to the issue of employee ownership. Pre-eminent in the ESOP context is the question of defined benefit pension plans, an objective to which our Union is deeply committed in all of our bargaining relationships. We do not see an ESOP arrangement, putting all the pension eggs in one basket as it were, as an appropriate substitute for a defined benefit plan, but obviously have no objection to the supplementation of retirees' incomes which it could represent.

We also view the ESOP as something which should be firmly based in the collective agreement and about which the employee owners can bargain. We see the Union as bringing special value to the relationship between the worker owners, if you will, and the manager owners. Whatever the formal arrangements may be, the managers normally bring much more expertise and understanding to the table when financial and other such issues are under consideration. The Union has the resources and the access to bring some balance into this circumstance, both by providing expert assistance, and by bargaining for and insisting upon the appropriate educational efforts to enable worker owners to catch up as quickly as possible in achieving knowledge and competence in such matters.

One of the many attractions of a fully participative, democratic, union-style ESOP is the demystification it can bring about for its worker owners with regard to the financial and managerial aspects of ownership. This can be a significant confidence builder among workers, both in terms of willingness and ability to accept responsibility, and, even more significantly, the ability and the will to exercise power. In a most fundamental way, all of these issues are about power, the power of ownership and property, the power of labor, and how it all can be related to building a society based on the values of democracy which include, from a union perspective, the economic as well as political empowerment of all its citizens.

The Changing Relationship of Labor and Employee Ownership
Another of the broader aspects of the relationship between unions and employee ownership is the matter of industry standards or, more specifically, the implications of pattern bargaining. One of labor's traditional goals, now under a great deal of pressure in a globalizing economy, is to remove wages from competition, to prevent a race to the bottom, an item of much discussion today as it was during the Great Depression. One of the fundamental purposes of the Wagner Act and the New Deal was to stop the ratcheting down of wages and the destruction of consumption which it created.

To put the issue somewhat differently, one of the Union's objectives during the steel crisis was to save as much of the industry as we could, with as decent standards as possible, not simply to save particular enterprises here and there. This was contrasted with the attitude of some corporations that intended to be survivors, whatever havoc they might wreak. In a broad gauge way, employee ownership should be a positive help in achieving such a goal, but it requires thoughtful and specific attention in order to plan within a wider framework than simply immediate, short-term, isolated enterprise objectives. This is one of the areas that, I think, makes some unions cautious about the issue of employee ownership. Solidarity in the face of corporate attacks and pressures has been hard won. Our experience has been that solidarity can be preserved in employee ownership situations, as well or possibly better than in others, but not without being acknowledged and addressed.

I know there are many in the employee ownership movement who are somewhat frustrated with unions, who feel that they should be more vigorous and outspoken advocates for employee ownership and all the good things it can mean for workers than they appear to be. One element in understanding this caution is to understand the multiple roles which labor plays in our society. Labor is, most proudly, an agent of progressive social change, through its organizing and through its legislative and political action. It is the people's organization which most directly confronts private economic power and requires that corporations share wealth and accept a measure of social responsibility. At the same time, labor negotiates collective agreements which provide employees rights on the job, benefits and security and which also establish a vested interest in the success of the enterprise. Labor needs to be satisfied that a wholesale transformation to employee ownership, as desired by many advocates, would not attack these established roles, but indeed, as I believe could and should be the case, enhance and expand them. Labor is not disinterested in ownership. 401(k) plans and such are a common item in collective bargaining. Labor investment funds are an established part of the investment scene in Canada and a number of efforts are underway to establish similar funds in the United Sates. These developments provide the background for a much richer discussion between employee ownership advocates and the labor movement than has yet taken place.

Labor, Employee Ownership, and Globalization
To a considerable degree, the overriding labor issue of the day is globalization and its impacts. Here again the employee ownership movement has much to offer. One of labor's most fundamental concerns is that living standards should rise as quickly as possible across the world, in order to both subvert the race to the bottom and to provide a basis for trade based on real comparative advantage, not on an exploitive, so-called competitive advantage fueled by $1 or $2 a day wages for millions of people. Labor wants real trading partners who can not only sell but also buy. From the perspective of a developing economy, employee ownership can keep capital at home, begin to establish an investment base, decrease vulnerability to the opportunism of global capital which flees more easily than it arrives, and improve living standards.

Worker, community and other diversified, democratic, shared-ownership approaches also have the potential to counteract another of the most egregious impacts of globalization as presently practiced—the unconscionable increase in inequality within our own society and across the world. We are told every day that we are experiencing the most sustained economic boom in history and yet it is a boom in which millions have not shared, in which more than 40 million people have no health insurance, and in which, according to Time Magazine, the average salary of an American CEO is now 476 times that of an average American blue-collar worker. The inequalities in the world economy are, if anything, even more dramatic. According to the UN Development Program, 80 countries have per capita incomes lower than a decade ago, 60 countries have been growing steadily poorer since 1980, and the combined wealth of the world's 200 richest people, the top seven of whom are Americans, equals the combined annual income of the world's poorest 2.5 billion people. These realities are, of course, a measure of the challenge and the difficulties. They represent entrenched power, both in our advanced finance-dominated societies and in many third world countries.

The labor movement, through its historic and current struggles, has developed some effective means of coping with at least the worst aspects of this. We know that, given a framework of human and labor rights, collective bargaining works. We know that when such a framework was established in America there was an explosive expansion of middle class incomes and dramatically improved living standards for millions of American workers. We know that this has been the case in country after country where collective bargaining rights have been truly established.

At the same time, the challenges are great and, as I have already mentioned, labor has become more and more interested in the financial and ownership considerations which drive our modern industrial economies. We see this not only in the 401(k)s and the labor investment policies of collectively bargained pension funds. We see it as well in labor's activities around issues of influencing the use of capital, of corporate campaigns, and of corporate governance including union nominees on corporate boards. In this phalanx of activities and approaches, employee ownership should have an important place.

The idea of raising the profile of employee ownership within the labor movement was one of the reasons that we created the Worker Ownership Institute in the Steelworkers. We had a number of motives. We wanted to deal head on with the idea that worker owners don't need unions. We wanted to ensure that not only the traditional needs of workers, but the special needs of worker owners and their enterprises were being met by the union. It was also part of our vision that the Institute should come to broaden its base across the labor movement, to include many other unions in its membership, and contribute in this way to a deeper discussion within the movement concerning the relevance and applicability of employee ownership.

In Conclusion
From my point of view, this begins to get to the heart of the matter. There is need for a much higher profile and a much deeper and more intense dialogue between and among the labor and employee ownership communities about how to approach the future and the enormous issues involved in attempting to achieve democratic, sustainable and just economic development around the world. The Capital Ownership Group is demonstrating how such a dialogue can be created within the employee ownership community. This community and the labor movement need each other. Without dedicated, powerful support, employee ownership runs the risk of continuing to be marginalized and manipulated by more powerful economic interests.

Similarly, the international labor movement has no reason to be complacent. The needs of working people across the world almost defy comprehension. The challenges facing the labor movement if it is to fulfill its mission and meet those needs are the greatest it has ever faced. The good news is that the ideas, stratagems, communication and other techniques to which we have access are also the most imaginative and powerful that we have ever had available.

I do not believe that the development of the kind of dialogue I am proposing need depend exclusively upon leaders for its implementation, although that certainly would be most helpful. Those who share the idea that these two movements have much in common have a critical need for each other. If they begin a serious discussion and examination of how the future could unfold to their mutual advantage, and, most importantly, to the advantage of ordinary people everywhere, we would, I believe, surprise ourselves and everybody else at all we could accomplish.

In any event, activists in both movements, particularly those who are already involved in both, must seek every opportunity to find and build upon common ground. The needs are great; the time is now.