Changing Ownership, Changing Attitudes: Good Things Happen When Workers Feel They Belong
January 1, 1996 -
There's been quite a change in attitude among the employees and management at Interlink Freight Systems, formerly known as CP Express and Transport, one of Canada's largest trucking firms. The change has come about because employees have begun to think more like ownerspeople who now have a stake in the company, something sorely missing before.
Nick Bountas, a foreman at one of Interlink's warehouses, remembers the old days well. Fifteen years ago, when he was working on a loading platform, a union representative came around and told him to slow down. Why should you work hard, he said, since it makes no difference in pay anyway. And besides, "If you do that again, we'll slash your tires," warned the union rep.
It's no wonder the company did not do well. The losses piled up: $100 million in 1992 followed by more red ink in 1993. In the last four years of CP management, the company lost $170 million. In 1994, management decided to cut their losses and get rid of the company. But this was a tough economic time for an industry hit hard by recession and deregulation. There simply were no buyers. That's when management turned its mind to selling the company to the employees, following the example of a successful British trucking firm.
The biggest obstacle was the employees' distrust of management. Led by Keith Robson, who later became president of Interlink, and in cooperation with the employees' union, the Transportation Communications International Union (TCU), a buyout plan was cobbled together. Robson believed that "if we could get the people who work here on side, we could turn it around."
Employees were divided, but they could see the handwriting on the wall: no buyout, no jobs. The debate about the pros and cons was intense. In the end, however, in a fairly close vote, the employees decided to go with the takeover plan. The employee buyout, completed in September 1994, was the second largest in Canadian history.
The new owners (employees) had to swallow hard. The buyout plan included the layoff of 200 employees, a $15 million cut in labour costs, reduced benefits, and a five-year collective agreement with a three-year wage freeze. In exchange, each employee receives 600 to 800 shares of Interlink annually, and 20 per cent of pre-tax earnings are allocated for a profit-sharing plan.
Removing the poison
The new company did not turn a profit in 1995, but its prospects look much brighter. Most importantly, there has been a remarkable change in attitude on both sides of the bargaining table. As one observer put it:
A poisonous atmosphere of labour relations has been replaced by an evolving, if still uneasy, sense of cooperation and commitment. Managers still manage, but with less autocracy and more consultation. The Transportation Communications Union still represents its members' interests, but with less adherence to the dogmatic nostrums of the collective agreement. If it's a good idea, try it. If it makes sense, do it. (Toronto Star; September 23, 1995)
Nick Bountas now owns 1,600 shares of the company. He is pleased with the change because the employees now have a sense that they're very much a part of a team that's working together. He explained: "I'm proud to be an owner. It's our company. We can make it a success. All we have to do is move the freight, make sure it gets there on time and do it safely."
We live in times filled with uncertainty for employees, many of whom are experiencing unemployment or underemployment, something that they never expected to happen to them. Not all employee buyouts are feasible or successful. And more often than not, workers don't have much choiceif they want to keep their jobs.
In Interlink's case, "all three parties won," according to Robson. "The employees have their jobs and a potential for a future capital gain, CP reduced its liability and the union has 2,500 members paying dues and contributing to the philosophy of employee ownership."
The example of Interlink shows how good things can happen when workers feel part of the company ; when they are given a say in their daily work; when their jobs are more than just a pay cheque. It makes all the difference in the world whether or not employees feel they are treated like people who count. Vive la difference!