Kerkorian Proposes Employee Ownership in Chrysler Bid

Maybe employee ownership is catching on, at least as a way to help finance troubled companies. Financier Kirk Kerkorian has proposed sharing ownership with union workers at Chrysler in return for their agreeing to changes in health care costs. The UAW did not respond. Kerkorian is one of a few serious bidders to buy Chrysler from Daimler Chrysler.

Chrysler had an ESOP mandated by the Chrysler Loan Guarantee Act of 1979. It put $167.5 million in stock in the plan at the outset. The plan was terminated when the loan was paid off. Workers ended up with a strong return on the ESOP. They did not give anything up for it in exchange that would not have been given up under terms of the Act if the ESOP amendment had not been added.