AGENDA 2026: Profit Sharing
The STRONACH FOUNDATION For ECONOMIC RIGHTS suggests a form of wealth distribution in Point #5. Is this advice to business owners? OR a policy recommendation for governments?
Number 5 of Stronach’s 7 economic policies.
I use [ ] brackets to identify the WHAT has to be done, WHY, BY WHOM, HOW and WHEN.
5) Share Profits With Canadian Workers
When small businesses grow in size to more than 300 employees, they [the WHO?] will be required [the BY WHOM] to begin sharing annual profits with [for WHO] employees and managers, recognizing that [the WHY] these stakeholders are entitled [WHY?] to a portion of the profits that they help produce.
They will [the WHAT] share profits according to following formula [the HOW]:
Year 1 – 5% of the profits will be shared
Year 2 – 10% of the profits will be shared
Year 3 – 15% of the profits will be shared
Year 4 – 20% of the profits will be shared
Establishing this principle will [the WHY] create a new profit-sharing culture in Canadian business that will enhance competitiveness and improve productivity. We [BY WHOM, for WHO specifically?] will gradually and naturally transition from a culture of bosses and workers, to a culture where employees are partners in profitability and share in the success of the business.
I STRUGGLE WITH #5
Some time ago, I learned the reason why German labour unions in the private sector were generally acceptable to all parties: workers, investors and owners.
Unlike the Canadian versions of unions that are mostly found in the public sector, German unions were genuine partners in productivity and prosperity of all stakeholders within the businesses they served.
The German worker understood that everyone wins if common goals are pursued in a cooperative work culture.
What’s more, every German union adapted its operating model to each industry sector where they operated, and they did so in alliance with corporate management to accommodate the realistic economic dynamics that played out therein.
This model makes sense to me. I can understand why an Austrian immigrant like Frank would apply the same principles to his own businesses.
However, IF Frank is proposing as an ‘economic policy recommendation’ that governments should impose and regulate profit-sharing policies across all sectors, I DISAPPROVE.
Leave business owners to their own devices!
Occasionally, I see road crews fixing potholes on the rural roads in my community. Their employer provides these services under contract with the local municipal government while following the rules prescribed by the workers’ union. What I observe is not very inspiring.
The typical scenario. The driver sits in the truck while one or two men shovel asphalt into holes with different qualities of work outcome. Some crews tamp the holes filled with asphalt so they are firm, smooth and level with the surrounding road surface. Other crews dump a loose mound of asphalt into the holes to be compacted later by vehicle traffic. Days later, you can see the difference in the final results.
Some pothole roadcrew workers care. Some don’t. Some sit in the drivers seat without showing any concern for the quality of the work results.
In Ontario, they are all sub-contracted union workers paid by taxpayers.
Where is the PRIDE in their work?
Would these same men take pride in outcome, productivity and efficiency if they were paving their own driveway or building a new house for their family using their own labour or paying for the work of others from their personal assets?
WHY Public Sector UNIONS are UNPOPULAR
If PRIDE OF WORK was evident in the work product of every person paid by taxpayers, then public opinion would likely be similar to the average German’s opinion about private sector unions. Sadly, it's not.
AND no one is more responsible for this less-than-stellar reputation than the workers themselves. Only they can work to a standard that leads to personal pride in their work!
Here is something to consider. Germany became the industrial giant of Europe within a half-dozen decades after losing WW2. Prosperity soared and everyone benefited. The German worker deserves the reputation as among the most skilled workers in the world. Frank Stronach was a product of that Germanic work ethic before coming to Canada as a skilled tradesman in the 1950s.
Under Frank’s leadership and work philosophy, his businesses flourished. Like a creative leader, he experimented with and found a good balance between the interests of his workers, suppliers, customers, investors and management teams. His management approach enabled each of his business units to adapt and grow successfully to the unique and dynamic conditions of the automotive manufacturing industry and Magna’s competitive place within it.
Frank’s approach to business may be well worth modeling by other business owners in other industries.
However, any attempt to encourage governments to impose the one-size-fits-all regulations that are typical of public policies would be a strategic mistake.
My personal perspective.
I was Director, Talent Supply Chain, for an international SAP systems integrator between 2009 and 2018. We were contraturally engaged to replace the legacy computer systems within over 75 automotive parts manufacturing plants located in Brazil, Mexico and the USA. Our two primary clients: MAGNA and Faucecia (MAGNA’s largest competitor).
In my primary role as recruiter, it was my job to find highly-specialized SAP talent for those projects. Like finding the proverbial ‘needle in a haystack’, my focus was to find and engage SAP Consultants who had completed Systems Integration projects in automotive manufacturing plants within each country where we were engaged to fulfill project commitments. With this experience, my bird’s eye view of Frank’s past as the CEO of MAGNA has been helpful.
My hope for POINT #5
The best thing that governments can do for workers is to stop regulating the bejesus out of work places. Most importantly, repeal all of the laws and labour regulations that have contributed to Canada’s decline in productivity and prosperity for businesses, their investors and their employees. If this is Frank’s goal, I applaud it!
However, when I saw the phrase “… they WILL BE REQUIRED TO begin sharing profits …”, this suggests more government intervention, a counter-productive policy proposal.
Also, when he wrote “… these stakeholders are ENTITLED …”, that is the kind of statement that politicians typically interpret see as a green light to justify more laws and regulations, not fewer.
The PROPERTY RIGHTS of ALL parties must be respected. This principle is non-negotiable.
Government authorities have a poor track record of even acknowledging property rights much less enforcing them.
To most government officials, ALL property is theirs to control, including yours!
A lofty vision, but…
Then I read: “We will gradually and naturally transition from a culture of bosses and workers, to a culture where employees are partners in profitability and share in the success of the business.”
Yes, everyone wants this, and it is best to empower business owners, their managers and their employees to realize this vision WITHOUT third party interventions.
DON’T ASK THE GOVERNMENT to be party to achieving this objective unless you want the outcome to be like the filled potholes on your street.
