Business: Trouble in Workers' Paradises

• Share

(2 of 2)

Still, some employee-owned companies are resounding successes. Several cooperative-owned plywood companies in the Northwest were so profitable that they were bought out by larger firms. Puget Sound Plywood Inc. in Tacoma, Wash., flourished for years under a system in which the chairman was elected by the employees and received the same pay as hourly workers. Says Chairman Fred Brock: "The strength of an employee-owned company is that you try harder."

Maybe so. But effective worker-ownership programs will require stricter regulation of stock prices and a clearer understanding of who is running the store. Thus far ESOPs are clearly no panacea for workers or their bosses.