Saturday, June 12, 2010

Mondragon as a model for resilient communities

Fast transitions to resilient communities that offer energy independence, food security, and thriving local economies will require a new approach.  Resilient communities need to be sold as an investment (there's tens of trillions in investment capital currently on the sidelines).  An investment package that makes it more attractive than the alternatives.
- John Robb @ Global Guerillas

Orchards for Detroit

Michael Score gazes at the ramshackle houses and weed-ridden vacant lots in decrepit Detroit neighborhoods and envisions a solution to the Motor City's woes: Apple orchards, Christmas-tree fields and other large-scale commercial farms replacing acres of abandoned slums.

The non-profit SHAR Foundation calls its plan Recovery Park. Sponsored by a coalition of more than two dozen non-profit partners as well as businesses and universities, it aims to farm 2,000 acres in 15-to-30-acre pods.

Gary Wozniak, chief development officer for SHAR, aims to establish for-profit farming via a worker-owned cooperative system, much like Spain's famed Mondragon Corporacion Cooperativa.
- Melissa Preddy

Co-ops and employee-owned businesses

At machinery supplier Ulma Packaging UK, managing director Derek Paterson points out that in the UK in particular there is widespread misunderstanding about what ‘co-operative' actually means. When it comes to dealing with co-operatives and employee-owned businesses, it seems, political and cultural preconceptions can cloud business judgement.

Parent company Ulma in Spain's Basque region is part of the large and diversified Mondragon co-operative. Nor is Ulma's status unique in southern Europe. Packaging equipment manufacturer SACMI, based in Imola, northern Italy, is another case in point.

Paterson does not discount the possibility that the co-operative model might, under certain circumstances, work in the UK. But it is no coincidence that the parent company has not stipulated that the same model be followed in its own overseas businesses. "If you need to shift direction, the co-operative model is not too quick on its feet. There is recognition that the subsidiaries need to be faster in their decision-making," says Paterson.

He also associates the co-operative ethos, and the way it ties workers into the business, with notions of "jobs for life" which he judges are more suited to other parts of Europe.

In fact, co-operatives are just one form of employee ownership. While few employee-owned companies will share the democratic rigour typical of co-operatives, most will have a far flatter structure than the majority of mainstream companies.
- Paul Gander

Co-operatives: Profit by pulling together (

Cleveland grassroots cooperatives

Evergreen is looking to expand this year with three new businesses: Green City Growers Cooperative, which will grow leafy greens and herbs to sell to local institutions and food providers; Evergreen Business Services, a B2B co-op that will provide back office services to the Evergreen network of businesses; and Neighborhood Voice, a student co-op that will employ local high school and college students to create media that will link and provide publicity for the seven Cleveland neighborhoods involved in the initiative.

While the model is not entirely unique (the federation of worker co-ops on which it is based has been operating in Spain since 1956), it is certainly innovative in the way that it is scaling a grassroots solution to the current unemployment crisis in the United States. Getting off the ground has not been easy, as India Pierce Lee, Program Director for Neighborhoods, Housing, and Community Development at the Cleveland Foundation, explained during a plenary session at the 2010 Annual BALLE Business Conference. The co-ops were initially turned away when they applied for loans from banks who were hesitant to funds risky start-ups (the operation is currently funded by a combination of new markets tax credits, bank debt, and a grant from the Cleveland Founation). However, the Foundation found a wide based of support for the co-op model including that of Cleveland Mayor Frank Jackson and local anchor institutions who understood the value of creating not just jobs but wealth through ownership in local, distressed communities. Following with this year’s theme for the BALLE conference, Evergreen is a clear example of how communities are bailing themselves out of the current economic crisis through community-based, locally-owned strategies.
- Vale Jokistch

Job and Wealth Creation at the Grassroots Level – A Working Model In Cleveland (Triple Pundit) 

Worker coops as asset building strategies

Asset-building advocates have long included investment strategies – home and business ownership, in particular – as critical steps along a path to financial security for low-income working families, but we have typically focused on individual ownership strategies. Notable exceptions include recent Ford Foundation investment in the exploration of shared equity homeownership as a way to enable low-income families to build home equity while preserving public subsidies and keeping housing affordable over time and the Annie E. Casey Foundation has supported a national work group focused on the asset-building value of shared business ownership.

Today, there are new windows of opportunity to bring funders, investors, advocates and practitioners of shared business ownership strategies into the broader asset-building movement.  Two common employee ownership strategies are a logical place to start—Employee Stock Ownership Plans (ESOPs) and worker-owned cooperatives.  These strategies have long supported U.S. workers – across the wage spectrum – to build financial assets through ownership of an equity stake in the businesses where they work. ESOPs are one type of employee benefit plan that buys and holds company stock on behalf of workers. Worker-owned cooperatives are companies that are owned and democratically managed by their employees.

- Reid Cramer

Employee Ownership: A Promising Asset Building Strategy (The Ladder)