It seems that Chrysler could eventually end up under the majority ownership of the UAW, its main union, with Fiat holding a minority stake. It sounds awfully like the revisiting of a past era.
In the 1980s, there was a rash of employee-owned companies emerging out of troubled private ownership. In 1994, United Airlines became majority owned by its employees after all else had failed.
The employee share ownership movement was popular as an alternative to bankruptcy for unionised companies in financial trouble. It was supposed to cement the commitment of workers.
But it did not deliver the goods.
United Airlines went bankrupt in 2002, despite hopes that co-operation between management and the unions would solve previously intractable problems.
Now, the UAW reportedly stands to gain a 55 per cent stake in return for giving up contract entitlements. This is intended to head off the threat of Chrysler’s going into Chapter 11 bankruptcy.
I wish I felt more optimistic about it. The Obama administration has declared that it sees no future for Chrysler as an independent company and has pressed for it to strike a deal with Fiat.
But who knows what obstacles lie with a union-dominated Chrysler depending on Fiat for its viability? It does not feel like a stable solution to its troubles.