THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Saturday, March 18, 1995 TAG: 9503180028
SECTION: FRONT PAGE: A14 EDITION: FINAL
TYPE: Editorial
LENGTH: Medium: 51 lines
Philip Morris has negotiated a pair of contracts with employees that make them stockholders in the company. Extending the fruits of free enterprise to workers makes sense.
Employee stock ownership plans (ESOPs) have never really taken off. Many pension funds invest some of their money in company stock. But allowing workers to receive part of their compensation in stock is unusual. It shouldn't be.
Stock is common for managers, but almost unheard of at the blue-collar level. There's no logical reason that only people in suits should be given a share of the company they work for.
Philip Morris obviously agrees. Company spokesman Jay Poole says the latest contract ``provides a true sense of ownership'' in the company to those who toil on its behalf. Of course, the company isn't making these deals simply to preach the capitalist creed. Self-interest is involved.
The most recent bargain was struck with 900 members of the Machinists union who work at tobacco plants in Richmond, Louisville, Ky., and Cabarrus County, N.C. In lieu of pay raises, their new three-year contract will give each worker 94 shares of stock, worth a little over $6,000 at the present price. Higher pay would have increased the costs of benefits for the company, giving stock instead saves money for Philip Morris.
An earlier contract provided 3,860 members of the Bakery, Confectionery and Tobacco union with stock worth $2,000 each. When there's little loyalty between company and employee, when an every man for himself attitude prevails, plans like this are smart business policy. Poole says such plans possess the potential to create ``a partnership between hourly employees and management.'' That's better than adversarial relations.
An investment in the shares of the company obviously gives the participants an economic stake in marketplace success. When workers participate in company gains, it's in their interest to work for efficiency and competitive advantage. A sense of ownership is the great engine that drives free enterprise.
There's no valid reason to exclude workers and every reason to welcome them aboard. If capitalism is good for management, it ought to be just as good for workers. It will unquestionably be good for the future of American enterprise if other companies join Philip Morris in partially compensating workers by offering them a stake in the business. by CNB