Taking democracy to work

When Frank Adams talks to prospective clients, he frequently starts by citing the Magna Carta. Commonly remembered for its codification of civil liberties, the historic document also guaranteed—at least on paper—workers’ rights to such things as their jobs, tenancies, equipment and work vehicles. Today, Adams goes so far as to claim that “our rights as working people have diminished steadily since the Magna Carta.”

Up with people: “Jobs are leaving the country,” notes organizer Ajowa Nzinga Ifateyo. “Worker ownership is a way for workers to take control of their lives and their livelihood.” photo by Cecil Bothwell

But he’s still got hope. “At this moment in time, in the United States,” he says, “the worker-owned movement is one of the few efforts to expand democracy for today and to create new forms of democracy for tomorrow.”

Adams is a founding member of the Southern Appalachian Center for Cooperative Ownership, an Asheville-based consulting firm that helps people set up worker-owned businesses. Itself worker-owned, SACCO has helped worker groups across the country create such companies or transition to that status. He will be one of the featured speakers at the biennial Eastern Conference for Workplace Democracy, which will be held at UNCA from July 20 to 22.

The purposes of the conference are to expose people to the concept of worker-owned businesses, to strengthen existing businesses and encourage the formation of new ones, and to build the movement for workplace democracy. The conference is co-hosted by the Federation of Southern Cooperatives/Land Assistance Fund and the Southern Appalachian Center for Cooperative Ownership.

Ajowa Nzinga Ifateyo, a board member of the Washington, D.C.-based U.S. Federation of Worker Co-ops, visited Asheville in May to prepare for the July conference. “There used to be a lot more co-ops in the South,” she told Xpress. “Our purpose is to try to get some restarted and to help people see this model as a vehicle for economic development. Jobs are leaving the country, the economy is shifting, and worker ownership is a way for workers to take control of their lives and livelihood.”

From the outside, a worker-owned business looks like a capitalist enterprise; from the inside, it looks more like socialism—that is, the workers own the means of production and decide how those means should be used. Another way to characterize such an arrangement is as self-employment.

In such businesses, workers own a major percentage of shares, have representation on the board of directors and have a voice in major policy decisions on a one-person, one-vote basis.

Adams, Ifateyo says, is “a hero of the movement” to promote worker-owned businesses. He is the co-author, with Gary B. Hansen, of what she calls “the worker-owner bible”: Putting Democracy to Work: A Practical Guide for Starting and Managing Worker-Owned Businesses (Berrett-Koehler Publishers, 1992). Translated into multiple languages, the book has enjoyed particular popularity in former Soviet republics since the communist governments fell and as economies reorganized.

A mixed record

SACCO’s most visible project in Western North Carolina is Blue Ridge Paper Products. In October 1997, Champion International Corp. announced that its DairyPak Division, comprising two mills in WNC and finishing plants in five other states, was for sale. At the time, Champion was the largest employer in the region, with 2,100 employees at its Canton and Waynesville mills and an $82 million annual payroll. Workers and their communities faced a possible shutdown or the prospect of a new absentee owner.

Adams contacted leaders of Smoky Mountain Local 507 of the International Paperworkers Union. He discovered that the workers had discussed buying the plant and running it democratically, but had no idea how to undertake such an effort. A buyout involved serious risks and uncertain markets, as well as coping with Champion’s record of environmental abuses that had tainted the Pigeon River (see “Enviro Triumph or Dirty Bird?” March 14 Xpress), but the workers agreed to try to save the plant. Working together, Adams and the union created an employee stock-ownership plan that enabled purchase of 40 percent of the company.

The buyout wasn’t painless: In order to make the numbers work, workers accepted pay and benefit cuts even as they bought into the company. And subsequent labor negotiations became more complicated. During recent contract talks, President Howard Taylor of Smoky Mountain Local 507 told The Mountaineer, “You’re negotiating for the workers and, at the same time, trying not to bankrupt the company.”

The original buyout agreement guaranteed a worker vote on any substantive changes in the company. However, a change in union affiliation from the United Steelworkers to the United Auto Workers invalidated the original contract.

And last month, the majority partner sold out to Rank Group LTD, a New Zealand-based private-equity company. “It was bought for its market share, which has been steadily rising since the workers bought the company,” Adams says.

Numerous studies have demonstrated benefits from cooperative ownership, including slightly higher wages. But worker-owned businesses are not immune to failure, and Blue Ridge Paper may offer a mixed lesson, since the worker buyout preserved jobs but ultimately failed to preserve local control of the company. Other local examples of worker-ownership that foundered include Blue Moon Bakery and the Earthhaven lumber co-op.

Earthhaven’s logging-and-sawmill operation may soon emerge from the doldrums, however, with help from the Federation of Worker Co-ops. “I think there’s a good chance that they can get the operation rolling again,” says Ifateyo, who consulted with Earthhaven workers during her recent visit.

Word from the top

The keynote speaker for the conference at UNCA is Lynn Williams, former president of the United Steelworkers of America. Under his leadership, the Steelworkers became a powerhouse of the employee-ownership movement, and following in their wake, the Air Line Pilots Association, International, and the Amalgamated Clothing and Textile Workers strongly endorsed the concept. In 2006, Williams helped establish the Prairie Labour-Worker Co-op Council, which is developing a strategy for dealing with plant shutdowns in the Midwest.

More than 30 workshops featuring dozens of other speakers and facilitators will explore multiple aspects of worker-ownership, from its philosophical underpinnings to hands-on, how-to instruction. The plenary session, titled “Organizing Worker-Owned Businesses in the South,” will feature former Berkeley, Calif., Mayor Gus Newport, Executive Director Pam McMichael of the Highlander Center in Newmarket, Tenn., and Adams.

“Worker-owners are eager to learn and are almost always anxious to participate in decisions, particularly around working conditions, hours and wages,” Adams attests. “The more worker-owners know about the variables of management, finance or marketing, for example, the more productive and efficient they become.”

The registration fee for the conference is $200 (not including lodging), with a discount for members of the National Cooperative Business Association. For more information, visit east.usworker.coop, e-mail info@east.usworker.coop or call (413) 256-0726.