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Lane Walker Rudkin

Written By: - Date published: 1:00 pm, April 30th, 2009 - 54 comments
Categories: business, workers' rights - Tags: ,

lwrsmallI see poor management and a bitter marital tiff have put the jobs of 470 workers at Lane Walker Rudkin on the line and cast doubt on the future of yet another iconic Kiwi company.

As the NDU’s Maxine Gay points out, communities like Timaru, Greytown and Pahiatua simply can’t afford to take a hit like this. If you take jobs out of these communities it’s going to be devastating.

Once again, the people who we entrust to run our economy have failed us. Perhaps it’s time we considered some alternatives to the current model. Alternatives like industrial democracy that empower workers to make their own decisions and provide some accountability to management.

Because one thing’s for sure, you’d struggle to do any worse than the clowns who’re currently running the show.

54 comments on “Lane Walker Rudkin ”

  1. cocamc 1

    “Once again, the people who we entrust to run our economy have failed us.”
    Who do you mean?

    • Tane 1.1

      In a wider sense, the financial elite who got us into the current recession. In this particular case, the incompetent management of LWR.

      We’re seeing the dogma that our business ‘leaders’ know best being discredited all around us. Perhaps it’s time we democratised our workplaces and gave workers a say.

      • cocamc 1.1.1

        So there is then an opportunity for the workers to get together and buy the company off the receivers andn then run as a “co-op”. If that can be achieved then I’m all for it.

        • Tane 1.1.1.1

          They tend not to have a lot of capital, cocamc, that’s why they’re workers.

          My proposal is to recognise that people should have a say in the way their workplace operates and the decisions that affect their lives. It’s called democracy. You’re all for democracy, aren’t you cocamc?

          Or is democracy only allowed once every three years so we can elect our new rulers?

          • cocamc 1.1.1.1.1

            Tane – of course I am for democracy – don’t know why you raised that?. Again – nothing stopping the workers at LWR pulling together, raising some capital and setting up the business that way. Why doesn’t the union help them do this?

          • Daveski 1.1.1.1.2

            An interesting view of democracy. There are plenty of business owners who are putting their money into businesses to try and keep them afloat. Employees don’t put anything in. That’s not democratic either.

            Workers will benefit from an environment the encourages investment yet the bulk of the policies espoused here simply make it less attractive for investment in business compared with say more passive investment in housing.

            There will always be bad management just as there will always be “bad” union officials and workers. It’s a human condition.

            But by all means, take one business failure and use to brand all businesses as failures.

          • Bill 1.1.1.1.3

            How much is the company worth?
            How many of the 470 willing to take on the responsibility? ( including those in ertswhile positions of management.)
            How many houses that can be used a collateral?
            How much total redundancy to be used in buy out?

            Why not a low or 0% loan from union bodies if need be?

            And why, oh why, oh why do unions not already a vast body of literature on the various structures of Collectives and legal advice on their set up sitting and waiting to be utilised?

          • Tim Ellis 1.1.1.1.4

            I don’t believe workers don’t have access to capital, Tane. I suspect that at least half of the workers own their own homes. They should be able to raise $20,000 each against their mortgages to invest in the business and buy the business for themselves.

            Of course, if they owned the business and managed it themselves, then they wouldn’t need a union representing them against the bosses. Collectively these employees would save hundreds of thousands of dollars a year in union dues, which they could put together as capital towards the business.

            Unless they’re just unwilling to take the financial risks that entrepreneurs and businesspeople do.

          • The Baron 1.1.1.1.5

            Because then the unions wouldn’t have enough money for salaries and propping up Labour’s campaign budgets.

            Really though Tane, he has a point. By providing union funding, this could really get of the ground – it would be a great experiment to prove whether the concept could work. If it did, then other workers would have a model that they could take to the bank to secure access to capital. That would be quite exciting – I would really like to see it tried out myself!

            There needs to be a “first” to prove the merit of the idea. Do you know any unionists, Tane? Maybe you could pitch the idea to them?

          • Inventory2 1.1.1.1.6

            Tane – are you seriously suggesting that employees should have control over how the employer’s money is spent?

            As business-owners and employers, it is my wife’s and my money that is on the line. It is our reputations that will suffer if the business does not perform. It is my wife and I who agonise over adverse financial times. It is my wife and I who have used our home as collateral for money loaned to the business. It is my wife and I who work ridiculous hours. It is my wife and I who have everything to lose should the business fail.

            Your proposal is simplistic. You forget the fact that without business owners who are prepared to take risks and invest in something that they believe in, such as Mrs Inventory and I have done, there would be no businesses; there would be no jobs, and in fact, there would be no need for unions.

            We take our responsibilities as business owners and managers very, very seriously. We are fully aware that we are the source of income for our staff, in many cases the sole source of income. Every decision we make is made with that to the forefront of our minds. Our business is far more democratic than many, but at the end of the day, we are the risk-takers.

        • Tane 1.1.1.2

          I’m not suggesting it should apply to all business regardless of size at the current time. Nor am I suggesting that every business owner will like it, or that exceptions won’t need to be made. I can see how it would work in large companies like Fairfax, Air New Zealand and Carter Holt Harvey.

          Like Marx pointed out in the Communist Manifesto, with the concentration of capital production has already been collectivised. My proposal is to democratise it.

      • ben 1.1.2

        Didn’t those same people get us into the decades and centuries of growth that went before it? They feed the world, provide 80% of the jobs in the economy, put a pc in every office and lower the per seat mile cost of flying across the world to about that of a car. To name just a few things.

        Then the economy drops 2% and you want to jump ship.

        Nice one.

  2. Stephen 2

    What’s the usual answer to the proposal that workers just start their own business where ‘all the workers have a say’?

  3. vto 3

    Tane, nothing to stop people doing that now. Why don’t you take the lead and set one up for the rest of NZ to see. You’re in the union industry – you give it a go. Or someone in the unions. Don’t wait for the gummint to do it. Don’t wait for ‘them’ to do it. Don’t just write letters to the editor (old school blog). I’m sure the rest of NZ would watch with great interest.

    Oh, and I note no sympathy for the owners of LWR who have clearly just lost a great deal as well. You don’t care about them?

    • Tane 3.1

      By the same logic you could also argue that there should be no statutory employment rights such as health and safety, minimum wage, right to join a union, the right to appeal against unfair dismissal etc.

      Why, there’s nothing to stop people having basic employment rights without the law, is there? Rather than having laws you could take the lead and set up businesses that grant their employees rights for the rest of NZ to see. No need to wait for anyone else to legislate for fairness. The market shall provide.

      Of course, you don’t argue that because you and everyone else to the left of Roger Douglas knows that it’s absurd.

      Industrial democracy is like any other work right – a recognition that production is social and that the workers participating in it should have a degree of control over the workplace decisions that affect them. That our lives should not subject to the whims and mistakes of the powerful, as the workers at LWR have just tragically discovered.

      I’m just taking that principle a little bit further. Industrial democracy is about dignity and control over our lives.

      • Quoth the Raven 3.1.1

        I couldn’t agree with you more about industrial democracy. I would go a little further and say worker’ self-managment As you’ll note in the wiki that the first to argue for this was, the man himself, the first self-described anarchist, Proudhon who also advocated for a free market.

      • vto 3.1.2

        Tane, I don’t think the reverse applies, as you have explained (its not even the reverse). Those other things you mention are for the protection of some against others – what would any such legislation be protecting against. What would it do, such legislation? There is no need for it.

        And nws that, in my post I didn’t argue that there should be no legislation to create such structures. What I said was ‘dont wait for the govt etc and talk endlessly about it, just go and do it’.

        It’s not as if its a new idea. And there have been plenty of MBO’s last few years or so, just adapt that and go.

        Never picked you as an excuse-making procrastinator.

        • Tane 3.1.2.1

          What would it do, such legislation? There is no need for it.

          Clearly there is. The capitalist system perpetuates inequality of wealth and of power relationships. To expect the market to create industrial democracy on an economy-wide scale is just batshit crazy.

          Instituting industrial democracy would requires either direct industrial action by workers, either through strikes or seizures, or legislation.

          Sure, a union or a bunch of workers might be able to buy a failing business here and there if they really wanted, but it would be a single, isolated example. You’re not going to be able to buy the entire economy. And nor should you need to purchase the business to have industrial democracy.

          We’ve seen variants of more democratic workplaces overseas. Germany’s co-determination model is a rather conservative first step and it seems to work very well. Have a look at the Wikipedia article I linked to. Why not do that here for a start and see where it takes us?

          Never picked you as a excuse-making procrastinator.

          It’s called being realistic vto, and having a basic understanding of political economy. Something you seem to lack given your strawman arguments.

          • vto 3.1.2.1.1

            see below

          • Daveski 3.1.2.1.2

            You’ve enough straw in your arguments to feed NZ’s dairy industry.

            The inconvenient point raised above is that the trade off between risk and return is the issue. You are arguing for all return and no return.

            Rather than talking about it (you guys are good at that), why don’t you put it into action seeing you present your opinion here as fact? Indeed, it would be an interesting exercise to see how/if your views changed if your livelihood was reliant on others and your financial reserves were at risk.

            I have no doubt that some businesses are not shining lights of capitalism. Likewise, the concepts you have developed look lovely at university or at a conference but you won’t do anything about trying to make it a reality.

        • Bill 3.1.2.2

          “I didn’t argue that there should be no legislation to create such structures”

          The legislation already exists.

          http://www.legislation.govt.nz/act/public/1908/0081/latest/DLM144406.html

          Ltd liability. Full right to borrow and lend, Nominal shares. ($1 non-tradeable non- transferrable which confers full right to input in decision making) ie Fully participatory democratic structure.

  4. Tigger 4

    And where is NACT in all of this…? I don’t see that nice Mr Key running into create stimulus packages to encourage job creation, especially in small towns where they cannot afford to continue being slammed like this.

  5. vto 5

    Oh I see Tane, you think legislation should be introduced to provide that employees get some control over their workplace. Tricky one. That means reduction of ownership rights etc. Which means less investment and everything that flows from that.

    However, if one was set up without any legislation and showed that in fact while it may mean a reduction in ownership rights etc the business and employment result is in fact improved, then you may be most of the way towards what you want. That way there could be little opposition to such legislation (or less anyway).

    Again though Tane, this still points to you guys in the unions setting one up.

    Seriously, don’t wait for the govt. They are bloody useless and monumentally slow.

    LWR may in fact be the perfect opportunity to try this. You would be a hero! Not just to LWR workers, but, if legislation followed, to all NZ workers. You may even get made a knight of the realm for just such a manouevre. Imagine it …

    • vto 5.1

      Or try someone like Dick Hubbard for setting up an example.

      Don’t get me wrong I’m totally open to such ideas and can see how they could work to more people’s benefit.

    • Tane 5.2

      It’s already been tried overseas. As I said, the German co-determination model is one of the more conservative options and it works very well. You can take it anywhere from there.

      As I said, I don’t see a need to purchase the business. I’m all for worker ownership, but given that’s not practical on a large scale at this stage other than through nationalisation, seizure or gradual transfer of ownership (and that’s a whole other argument) the proposal is for industrial democracy within the existing framework of ownership. Baby steps, vto.

    • Quoth the Raven 5.3

      vto – I don’t know entirely what you mean by “reduced” ownership rights but I’m wondering if it’s similar to this old chestnut of an argument here: Vaguely Defined Property Rights Indeed You should certainly read it if you’re saying what I think you’re saying.

  6. Pascal's bookie 6

    So did any of the righties

    Actually read the post?
    Click on the little blue linkies?
    Understand what Tane was talking about?
    Have anything to say about that?

    If so, why are they all blathering on about how the shift workers should buy the company, or whatever the fuck it is they are saying?

    edit: vto now gets it. So there’s 1.

    • vto 6.1

      Am I a rightie p’s b?

      Here’s a bottom line – if such industrial democracy actually works then the business owners will be all for it.

      One of the most simple equations in the world.

      • Bill 6.1.1

        “Here’s a bottom line – if such industrial democracy actually works then the business owners will be all for it.”

        Em. No they wont. At least, not the existing ones.

        Under the existing legislation (link in previous comment), the vertical division of labour is done away with…an end to ‘one man management’. And the business comes to be owned by the shareholders (ie the workers).

    • Daveski 6.2

      Isn’t it a reasonable statement that Tane himself has confused the issue of ownership with industrial democracy?

      Instituting industrial democracy would requires either direct industrial action by workers, either through strikes or seizures, or legislation.

      • Pascal's bookie 6.2.1

        Not necessarily, no. Only one of those options is about ownership.

        • Tane 6.2.1.1

          That’s right. Read the text again Daveski, you can have degrees of industrial democracy with or without worker ownership. I was simply pointing out that the market’s not going to provide it.

          In this post I’m not discussing the issue of worker ownership. It’s everyone else who seems to be.

          • vto 6.2.1.1.1

            “the market’s not going to provide it.”

            I wouldn’t be so sure. As said above, if it works then the business owners will be all for it (despite what Bill says imo).

            You discount the business owners too much and to the workers detriment imo. Your ideology may be impeding the advancement of your ideology.

          • Tane 6.2.1.1.2

            Industrial democracy severely fucks with power relations in the workplace. Bosses don’t tend to like that.

            The reason I say this is experience. Business owners are very big on managerial prerogative. They will strongly oppose anything that weakens the fundamental control of management over the workplace and over staff, even if it means higher production and happier workers.

            You see, the corporation, at its most very basic level, is an authoritarian institution. Authoritarian institutions don’t tend to yield power without a fight.

          • The Baron 6.2.1.1.3

            Well you can’t really blame them for that, Tane – they own the place.

            “I need you to make more stuff” – if the answer was “No” to that, then I would get a bit pissy too…

            I’m not sure how that conversation works any other way. What does an industrial democracy look like, apart from a lot more talking, and a lot less productivity? Genuine question.

          • Tane 6.2.1.1.4

            It’s about workers having control over the decisions the company makes rather than having decisions dictated to them by management.

            What you find is that workers actually want the place they’re working to succeed, they just want some control over their working lives and a fair share of the proceeds.

  7. djp 7

    of course these jobs would never have existed in the first place had some entrepreneur not started the business in the first place

    • Tane 7.1

      I’m sorry, I don’t mean to use exclusionary language, but that’s just too stupid for words.

      • djp 7.1.1

        Is that the best reply you can come up with?

        In my experience people use a dismissal such as this when they aren’t able to come up with a reasoned response to the point.

        In other words “teach me oh wise one”.. why do you think is it so stupid?

        • Tane 7.1.1.1

          Um, because natural resources and labour exist without private entrepreneurs. It’s not like we’d all be sitting around with our fingers up our arses if there weren’t business folk around to tell us what to do.

          Jobs exist because there’s work to do, they don’t exist because an entrepreneur creates a magical job machine to create them out of thin air.

          • The Baron 7.1.1.1.1

            Ah, I think you’re both missing each others point.

            Production needs an idea = “what shall we make?”. Enter entrepreneur.

            Ideas need production = “how do I make this real?”. Enter production.

            Both are necessary. Where I think you fall down is in thinking that the two are mutually exclusive, the origins of class warfare and all that. Tane, I’m afraid you’re guilty of that by equating “entrepreneur” to “business people” above. That’s a fucked up conception of entrepreneurialism, Tane.

            There is nothing to prevent any of these workers from becoming entrepreneurs. All they need is an idea, some gumption to see it through, and some producers to make it.

          • djp 7.1.1.1.2

            Thats kinda my point.. I am not saying the workers are or should be at the mercy of the owners of businesses for opportunity.

            My point is that people created LWR which provided jobs.. great! Now that business is ending.. not so great but hey why are you bagging them so much? If you think you can do a better job at creating (and running) a business then go for it!

            free enterprise FTW

          • Kevyn 7.1.1.1.3

            Tane’s last response is one of the dumbest arguments I’ve read this side of Das Kapital.

            First sentence is missing a critical word that would make it true. Labour and natural resources exist unused or underutilised without entrepreneurs. .

            Second sentence totally false, more obviously so if you replace ‘business folk’ with ‘leaders’. Of course we wouldn’t be sitting around with our fingers up our arses, we would be too busy trying to find food to sate our hunger.

            Third sentence starts with an obvious truth and ends with one of the most absurd untruths possible. Entrepreneurs create either the product that needs to be worked on or the system that makes it possible to do that work within the resource constraints of the economy existing in that time or place.

            Note that I haven’t used the phrase ‘private entrepreneurs’ because anybody who activates a new idea is an entrepreneur, whether primarily for private benefit or communal benefit. Once the organisation of the work reaches the point that a beuracracy is needed then it makes no difference whether the form of the organisation is corporate or government, the effect is eventually the same – stifling of innovation.

            Leaving aside the relative importance of the various tools of production – brain, brawn, nature – which are mere details within any organisation, what is really the fatal flaw in Tane’s post is the implicit assumtion that democracy is what employees naturally aspire towards. No study of human behaviour has ever found this to be true. Group dynamics almost inevitably lead to the appointment of a leader, or ‘boss’, and the subsuming of democracy by politics.

            Tane, You are quite right to claim that Germany’s industrial democracy is only baby steps, Japan has a far more advanced form which was hugely successful.

  8. vto 8

    Well it all actually sounds like an idea worth a jolly good shove. Two things;

    1. Onus appears to be on the left to show it works. In NZ.
    2. Still no sympathy for the poor LWR owners. I have to quote Dr Seuss again “a person is a person no matter how small”.

    edit: Horton the elephant, not Dr Seuss

  9. gingercrush 9

    My question would be what role would the Unions play in something like Industrial Democracy. I would think there is itself a danger when giving workers the ability to hold management to account, and make some of their own decisions if the unions play too big a role in the negotiations and ultimately their part in committees etc. Unions aren’t always democratic themselves and sometimes the leadership of unions are in a much different world to that of the normal worker, the union worker. Would it not be possible for union leadership instead of enhancing worker democracy they rather facilitate in the interests of the leadership and not that of the worker? Would this require compulsory unionisation or would we see only union workers have a say?

    I’m not necessarily opposed to the idea. I wouldn’t like to see it compulsory but rather be something ownership could decide. Though in saying that, I struggle to see how a business would implement something like this without it being compulsory. I certainly would only be in favour if it actually enhanced workers and not the Unions themselves. I’m very distrustful of unions and I believe they do a lot of harm because while they pretend to sympathise with the worker. They are of themselves, part of the elite in this country. I would worry that too much democratic control is actually in the hands of the unions and not that of the normal worker.

    —-

    In regards to LWR. The left is right. The management there were disgusting and the management deserve no sympathy whatsoever. They were absolute shambolic and the business has clearly been in trouble for some time. Receivership doesn’t mean closure. But the company clearly has to undergo some massive changes which will lead inevitably to job losses. My guess, is that some of the meaningful brands left will be sold to other clothing businesses and one or more factories closed. The danger is that they’re left with a “no brand low cost clothing goods company” which, would actually lead to more factory closures and more job losses further down the road.

    {and fuck me I need to learn to write properly)

    • Tane 9.1

      gc, you obviously don’t spend a lot of time in modern unions. It’s not 1976 any more. In any case, I don’t see why such a structure couldn’t run parallel to the union movement. Workers could decide themselves what role, if any, their union played.

      If it’s a model like the German one where workers elect representatives to the board, for example, it would be up to workers to decide whether they chose to put their elected union delegates on the board or whether they put someone else entirely on there. It is, after all, about democracy.

      • gingercrush 9.1.1

        I never said it couldn’t run parallel to a union movement. My questions were largely against the Unions ending up controlling everything. Something I think the Union leadership would do. The leadership is very different from the normal worker. The Union leadership would clearly want a big role in any relationship where a worker is able to hold a company to account and where workers are part of the decision-making.

        • Tane 9.1.1.1

          Which union leadership are you talking about? The elected workplace delegates, the paid organisers, the elected councils and executives, or the general secretaries? You seem to have an idea of the Stalinist “union boss” used to such great effect by right-wing propagandists.

  10. Pat 10

    A worker’s collective could buy the business from the receivers if they got organised and there was a good business case.

    Say 70 workers want out and 400 want in. At $10,000 each that is $4M. LWR’s existing bankers would probably lend $10,000 to each of them individually, either secured or unsecured. Much better than losing money on the company receivership and mortgagee sales on the workers homes.

    So $4M capital to buy the company assets and for working capital. In addition, the Business itself could retain some of LWR’s existing funding lines for working capital.

    The catch is: just like Animal Farm, you need a good pig to take the lead and pull it all together. Surely the Unions should step up to the plate?

    • Bill 10.1

      No pig, but.

      Redundancy payments could well average out at around the $10 000 mark. If the company agreed to the redundancies being paid out under S123, then the total redundancy payment would be about 20% higher than otherwise at no extra cost to the company.

      Since the business itself doesn’t seem to have been the problem, then is it not possible to use projected turnover to help secure any additional loan?

      Plus the security of collective collateral (plus the plant?)

      Anyway. If a substantial number of LWR employees were able to raise the necessary capital, I’ve the legal blueprints for setting up a Worker Collective and practical experience on some of the more fundamental do’s and dont’s of such endeavours.

      More than willing to share. Not holding my breath.

      • Pat 10.1.1

        Andrew Little might be the union’s best pig to lead/set up a workers collective. Except he too busy trying to win a by-election, a general election, become an MP, and get ready to lead Labour after Goff.

        I’ll do the job for $250K and all expenses paid. One year contract.

  11. Bill 11

    Representative industrial democracy?

    Ok. So worker’s reps sit on the board. And the hierarchies of the workplace are maintained.

    So far, no good.

    And what benefits do those reps enjoy? Any perks there that they might have a mind to defend….or that would lead to them developing interests that are different to the interests of those they are meant to be representing?

    Co-opted reps are in many ways worse than no reps.

    I guess what I’m suggesting is that a half way house on the question of democracy is no democracy at all and any attempt to construct such a scenario will be inclined to drift further away from democratic ideas as time goes by due to influences (or the drag effect) of the workplace structures which are fundamentally undemocratic.

  12. Quoth the Raven 12

    Kevyn said:
    Once the organisation of the work reaches the point that a beuracracy is needed then it makes no difference whether the form of the organisation is corporate or government, the effect is eventually the same – stifling of innovation.

    I’m totally agreeing with Kevyn here. Other righties take note of what Kevyn wrote. The dominate corporate form we have today with its large bureaucracy, its bloated middle management epitomises this. This managerialism that conservatives are so fond of is, as Kevyn said, stifling. It’s not only stifling to innovation, it’s stifling to the worker and it’s terribly inefficient. It is exactly this that is an argument for greater worker control in the running of the business and a more horizontal management structure.

    There is a lot of toing and froing between “left” and “right” here, but I believe if we look carefully into the issues at play we’ll see that there is less a degree of difference than one might think. All we have to do is tell the conservatives to go fuck themselves.

    This chapter is on this topic and may interest some people.

  13. Cadwallader 13

    Inventory2: Your words are precise. The agonising over the welfare of one’s business is the side of life my workers never see. I have too much respect for my staff to burden them with it!

    Tigger: You’re an idiot! Why should gumm’int create jobs in out of the way places just for the hell of it? Creating economically dysfunctional employment is demeaning to the workers as much as being perennially on the dole. If small towns are great locations for businesses (and they may well be!) then you set up an enterprise in one of them. There’s plenty of little towns to select from!

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