Financialisation, ownership and employee interests under private equity at the AA, part two

Ian Clark

doi:10.1111/irj.12137

Abstract

AbstractThis article examines a theoretically informed case study of the effects of financialisation at the workplace. It focuses in particular on trade union de‐recognition and trade union recognition in the furtherance of ownership interests. The paper reports on the continued diffusion of investor‐owner interests under the private equity business model which has recently witnessed the AA re‐listed on the stock market. It addresses two research questions. One, how are investor‐owner interests secured by trade union de‐recognition and re‐recognition? Two, how and why, as a de‐recognised trade union, does the GMB continue to campaign for and represent GMB members in the AA when the IDU (the independent democratic union) has sole recognition at the firm?

Highlights

FINANCIALISATION AND WORKPLACE OUTCOMES—THE RESEARCH QUESTIONSFinancialisation can be defined as the costs and consequences of financial innovation for firms and their employees in the non-financial sector of the economy
Five years later the AA passed into private equity backed ownership and in 2007 the firm was merged with Saga whereupon its ownership was re-formatted under the title of Acromas Holdings
The ownership structure employed by the AA private equity owners—the limited partnership— enabled them to become the firm’s new investor owners via a change of majority shareholder and continue to run the firm as it was before they acquired it

Summary

Introduction

FINANCIALISATION AND WORKPLACE OUTCOMES—THE RESEARCH QUESTIONSFinancialisation can be defined as the costs and consequences of financial innovation for firms and their employees in the non-financial sector of the economy. Investor-owners, such as hedge funds, private equity partnerships and sovereign wealth funds, use innovative and sophisticated investment leverage in the forms of derivatives, junk bonds, credit default swaps, mortgage backed securitisation of firm level assets and liabilities, shorting and collateralised debt obligations to acquire (what become) portfolio firms. More significantly these investor-owners and the ideology and motives and values central to I&SHV witness the core of financialisation—the endogenous creation of money, credit and debt—become rooted in the operation of non-financial firms. Empirical material is advanced to reveal how work intensification, performance management and required revenue

Methods

Results

Discussion

Conclusion