Wow, Wonks Anonymous did not think that people cared about his dissertation topic but now labor lawyer AnnS weighs in on Producer Cooperatives:

Employee-owned businesses are a “been there, done that and most of them failed” idea that reached the height of popularity in the mid to late 1980s.

Now Daniel Zwerdling wrote the definitive account of these attempts which can be found by searching "Daniel Zwerdling" + "Workplace Democracy" and the story told is not so simple as AnnS would have us believe.

Most buyouts took place in union firms that paid good wages in manufacturing industries that were pressed by foreign competition or industrial restructuring. As manufacturing firms, they had to contend with a flood of cheap imports, which imports were relatively cheap because they were paid for with easily manufactured IOUs - see The American Disease for a more detailed discussion.

In fact most manufacturing in the US suffered severe setbacks at the time, regardless of ownership.

Other firms were in industries like meat packing, that were being restructured by socially conscious entrepreneurs who wanted to uplift the conditions of workers, from Mexico and Central America. They generally did this by importing workers, giving them jobs in sweatshop conditions at unsanitary plants, and pointing them to the welfare office to get their other needs met.

It is one of the great failures of workers as managers that they are not able to impose these necessary efficiencies on themselves.

Finally there was the very interesting case of Continental Airlines. Here the FAA intervened to prevent a worker buyout and the company was handed to Frank Lorenzo, an entrepreneur who then took it into bankruptcy to get rid of the Union.

After a decent period of looting Continental was allowed to fade into the history that AnnS is so fond of.