Mondragon 2012

From credit unions to investment unions

What the world needs now is a new type of financial institution - "an investment union" - to finance localised business projects, writes Oscar Kjellberg.

"It should help promoters plan their projects and then find outside investor-partners in return for a share of each project’s income rather than its profits. This is essentially how the Mondragon co-ops’ bank used to work," Kjellberg says.

"Imagine yourself as a bank manager in a small community 50 years ago. Your friends and neighbours have their current and savings accounts with you and when they need to borrow they come to tell you about their ideas. You know most of the locals and it is not difficult for you to tell whether a proposal is going to work. Your decision is based not only on the idea’s potential commercial viability but also on the individual’s personal ability, skill and support network.

"But times have changed. Bank managers in small communities do not have the authority to give bigger loans any more. Instead, the bank that owns the branch channels the community’s savings into what it believes to be the most profitable segments of a near-global capital market. It will only lend to the people in the community if it can get a safe mortgage charge over their houses but, even here, the bursting of the housing bubble has made the bank wary about their ability to repay," Kjellberg continues.

Kjellberg proposes that we go back to the future to the way the Mondragon cooperatives began.

"The institutions I envisage would work in much the same way as did the bank at the heart of the Mondragon co-operatives in the 1960s," he says.

"There, if a group wanted to start their own business as a workers’ co-operative, one of the group would join the bank staff, on normal pay, to work on the business plan with a ‘godfather’ — someone who specialised in helping new businesses start up.

"Then, when the godfather judged that the plan and the group were ready, he (they were all men in those days) put the project to the bank board and funding would be approved. The godfather then helped the new business establish itself.

"The money the group received from the bank was nominally a loan, so the business knew how much it was expected to pay its partner each year; but in reality the risk was shared and the bank’s agent, the godfather, and the members of the group were equally committed to the project’s success. No projects failed under this arrangement.

"In its modern form, the institution we need could be a mixture of a (non-debt) savings bank and a meeting place for all the savers and entrepreneurs in a community. Instead of being a “credit union” it could be called an “investment union” (IU) to emphasise its co-operative character," Kjellberg proposes.

"The job of those running the IU would be to help an entrepreneur develop his or her idea, until the IU had sufficient confidence in it, and in the people involved, to be able to recommend that savers put up the required capital in exchange for a specific share of the project’s income. The IU would be paid for its efforts by taking a share of the income itself, as would the entrepreneurs. This would ensure that all the partners were fully committed to the project’s success.

"Once the project was running, the IU would make a market in the shares and, while savers would be allowed to sell whenever they wished, the IU and the entrepreneurs would only be allowed to reduce their holdings with the consent of everyone else involved.

"Some investment unions could be purely local and deal with a wide variety of projects. Others could be more specialised and work over a wider area. For example, they might confine themselves to energy projects and build up a lot of technical expertise. Some might be akin to unit trusts, so that every member had a stake in everything. Others might allow savers to decide on their investment portfolio themselves.

"Whatever form they took, investment unions would need to perform their social financial process continuously — because a continuous flow of saved money is required to help entrepreneurs finance their continuous stream of projects," Kjellberg says.

SOURCE

The Mondragon bank – an old model for a new type of finance (Fleeing Vesuvius)

Mondragon auto parts coop moves into India

Months after starting production in China, the Mondragon cooperative Cikautxo group, which develops and manufactures parts and groups in polymer materials for different applications, has just bought a 50% stake in the Indian tubing manufacturer Taurus Flexibles Pvt. Ltd located in Pune.

The new company resulting from this alliance, “Cikautxo Taurus Flexibles Pvt. Ltd.”, will be dedicated to the production of tubes for the Automotive market, a Mondragon statement says.

The company at present employs 200 people and has a sales forecast of of 9.5 million euros for the fiscal year ending March 2012.

This joint venture is a part of the globalization process which the cooperative is undergoing in order to meet the requirements of the key players in automotive manufacturing, who aim to set up a panel of suppliers able to offer global development and production. The new India plant will be the second Cikautxo facility in Asia, as this year production was commenced in China, in the plant located in the industrial park which MONDRAGON has in Kunshan, an area close to Shanghai.

Cikautxo, apart from its plants in the Basque Country and Aragón, also has production plants in Brazil, the Czech Republic, Slovakia, China and now India.

The Cikautxo Group, which develops and manufactures parts and groups in polymer materials for different applications, forecasts consolidated sales this year of 220 million euros, of which 85% will be from the Automotive market.

SOURCE

CIKAUTXO sets up a joint-venture in India (Mondragon)

CIKAUTXO starts production in China (Mondragon)

LINKS

www.cikautxo.es

Mondragon Annual Report 2010

Watch a video summary of the 2010 Mondragon Annual Report.


MONDRAGON Corporation, Video report of 2010 year from MONDRAGON Corporation on Vimeo.


Also available for reading here.

American Socialists promote Mondragon coops

Carl Davidson of Committees of Correspondence for Democracy and Socialism tells the story of the Mondragon Cooperatives at the 2011 Left Forum.





SOURCE

Carl Davidson on Mondragon at the 2011 Left Forum (American Worker Cooperative)



SOURCE

Third Coast Workers Coop

Comparing the Mondragon coops

Jeffrey Hollender, who describes himself as a leading US authority on corporate responsibility, sustainability and social equity, visited the Mondragon coops recently and has posted a series of articles on his website.

In his first article, Hollender explains the basic "people before profits" principle of Mondragon.

"I’m compelled to start with purpose, mission and values," writes Hollender." Whatever one might conclude about Mondragon, the single most important—and profound—part of my experience is the breathtaking beauty of 120 businesses, employing 85,000 people with sales of 15 billion Euros that are dedicated in everything they do to the dignity of the human spirit.

"In an industrial, and now post-industrial age, that has turned people in to disposable assets, into tools at the service of capital, it is so hopeful to experience business at scale that chooses to honor the essence of humanity over the accumulation of wealth in service of capital."

The second article looks at the training offered by the Mondragon system.

"What if the board members of every US corporation were trained in the basics of corporate governance – before they took office?" Hollender asks. "Imagine that kind of business world."

"Such ideas are not “what ifs” at the Mondragon Cooperative Corporation. They are realities.  “Training must precede the establishment of a cooperative! Trained people will build better companies. To enter a cooperative you must value the community ahead of yourself,” our tour guide enlightened us.

"He was speaking at Otalora, one of the cooperative’s thirteen universities and the equivalent of a business school – it’s where we spent several hours understanding the training program offered to every new coop member elected to a coop board or a as Governing Council Member."



Hollender also talked to Mikel Lezamiz, Director of Cooperative Dissemination at the Mondragon Cooperatives.

How do you compete against the business practices of China?

“With quality and good service. We have a co-op that produces bicycles called ORBEA. These bicycles are very expensive ($5,000 to $20,000) but much better quality than the Chinese products. I recommend that you read an interesting paper “MONDRAGON Innovating a Human Centered Globalisation” by Nick Luzarraga, PhD (Author’s Note: Dr. Luzarraga was part of our own MIT group). The major conclusion of this paper is that when we [Mondragon] create two jobs abroad, we create one locally.”

Are workers in your international locations also cooperative members?

“No, not yet.” (This was a topic of almost every conversation. Many worker/owners identified it as the #1 challenge for Mondragon. At numerous international factories were efforts were made to convert employment into cooperative ownership, local employees were unwilling to invest their own salaries in an ownership share. While these efforts were unsuccessful the consensus of our group is that greater structural innovation and flexibility is required on Mondragon’s part.)

How do wages compare between how much you pay here in Mondragon and in factories you own and operate internationally?

“We offer not only wages but also other benefits that make labor stable. We definitely pay more than our competitors so that labor does not leave our co-ops.” (However, there is currently no independent verification of formal benchmarking in place.)

Do you have a problem with managers leaving your co-ops for General Electric, General Motors or other international industrial conglomerates?

“No, because we offer our workers much more. Our workers are at the top of Maslow’s pyramid. In other work places, workers are dealing with lower levels of the Maslow’s pyramid.” (Hiring managers however, when salaries at Mondragon are often a fraction of the marketplace is a different challenge.)

SOURCE AND FULL INTERVIEW

A Visit to Mondragon: People Before Profits (Jeffrey Hollender)

A Visit to Mondragon: Training Board & Governing Council Members (Jeffrey Hollender)

A Visit to Mondragon: Interview with Mondragon’s Director of Cooperative Dissemination (Jeffrey Hollender)

California city's Mondragon plan moves forward

The California city of Richmond has embarked on a program to help promote the growth of co-op businesses to create job opportunities and provide avenues to create stable incomes for unskilled and hard-core unemployed residents.

The program started last year after Green Mayor Gayle McLaughlin visited the Mondragon Corp., a federation of worker cooperatives in the Basque region of Spain. She was part of a national delegation, SFGate reports.

"Even in good times, Richmond has high unemployment," McLaughlin says. "In hard times, cities like Richmond suffer even more."

McLaughlin said the city could act as a conduit by hiring co-op businesses to provide services to the city.

City officials are now re-working a vendor ordinance that would allow a health-food truck co-op onto city-owned property.

The city Chamber of Commerce and its traditionally conservative Council of Industry have also expressed interest in the co-op project, the paper says.

"Everybody is looking for alternatives and new ideas to stimulate business, and this is one of them," McLaughlin said. "We can't continue with the same strategies, and these co-ops offer the chance to create new jobs and build personal wealth."

The program is still in its infancy, but there are already more than a half-dozen co-op efforts under way.

"We're focusing on worker co-ops where people own their own jobs and manage themselves," said Terry Baird, who was hired by Richmond as a consultant. Baird, a Richmond resident, is a co-founder of Arizmendi Cooperative Inc.

Miguel Espino, who established the East Bay Agricultural Project, wants to establish aquaponics farms in Richmond that grow fish and vegetables.

Baird has consulted with a budding North Richmond health food co-op, an electric bicycle builder and a group that wants to sell hydroponically grown organic foods.

Most recently, Baird advised the Latina Center, a women's group of Central and South American immigrants who dream of one day running a bakery similar to Arizmendi.

Baird, a 30-year co-op veteran, has advised the group to start small and think big.

SOURCE

Read more: Richmond co-op program holds potential for jobs (SF Gate)

LINK

Richmond, California

Distributist John Medaille on the role of cooperatives

John Medaille, who is co-editor of The Distributist Review webzine, and an adjunct instructor at the University of Dallas, explained to ZENIT what’s missing in current economic theory and why distributism deserves renewed appreciation.ZENIT: Your book begins by examining the basic assumptions of what is generally called "economics." What are those assumptions? Are they the cause of the current global economic crisis?Medaille: The two most basic assumptions in economics today -- and by the way, they are both wrong -- are that economics is A physical rather than a human science, and that as such it can have nothing to do with questions of ethics.

Since the end of the 19th century, economics has sought to do away with justice, especially distributive justice, but in doing so it has lost the ability to accurately describe any actual economy. Therefore, no one should be surprised to learn that 90% of economists missed the warning signs of the current meltdown.

The same was true during the last meltdown, and the one before that, etc.

You cannot accurately predict the course of a system if you cannot accurately describe it.

Distributism, on the other hand, asserts that justice is not only a moral problem, but a practical, economic problem, and that without economic justice, you cannot reach equilibrium. When economics abandons justice, the government is constantly forced to intervene to insure stability, even though the interventions may only work in the short run.

We have abandoned justice on a global scale, which has led to chronically unbalanced trade. When trade is chronically unbalanced, it is not really “a trade” at all. Rather, it is a system by which foreign producers finance our consumption of their goods, a system that impoverishes both parties.

ZENIT: Most people believe that the battle for the soul of capitalism is between the followers of Keynes and the followers of Hayek. But you believe both theories lead to what Hilaire Belloc called the "servile state." Why is that? What are they and their followers missing?

Medaille: Capitalism and socialism are really not opposed realities; one is just the continuation of the other, and distributism is the opposite of both: it is the free market.

Capitalism tends to concentrate property in the hands of a few, thereby choking off the market, and socialism continues this by concentrating ownership in the hands of the state. In practice both systems end up with control of the most important resources of the nation in the hands of a few bureaucrats -- über-managers who claim to represent the interests of the nominal owners, be they the shareholders or the general public, but who actually control these resources for their own benefit.

Further, in concentrating economic power, they also concentrate political power, and the large corporations are able to obtain vast privileges and subsidies for themselves, as we saw in the recent meltdown. Thus, between the gargantuan state and the gargantuan corporation, the individual is reduced to a situation of servility.

What both capitalism and socialism are missing is the willingness to admit that power follows property. Both systems claim to create freedom by concentrating capital, but because this also concentrates power, what is left for the mass of men is powerlessness.

Distributism, on the other hand, seeks to build an ownership society of free men and women, conscious of their rights and with the means to defend them against the centralizing tendencies of both the state and the corporate collectives.

ZENIT: What is distributism? Isn't it just redistributionism, or splitting the difference between capitalism and socialism? How could such a philosophy, which relies on a certain amount of government intervention, create a truly "free" market?

Medaille: Actually, it is not so much a question of what the government should do as what it should stop doing.

In truth, the accumulation of property usually depends on government power; the higher the piles of capital, the thicker the walls of government necessary to protect them.

There are, of course, positive things that government can do, with tax policy, for example, or simply by enforcing its own laws against monopoly and oligopoly. And there are cases where the title to land or other resources is questionable to begin with.

But in general, a distributive society requires a smaller government with powers properly distributed throughout all levels of society.

In contrast to a system of concentrated economic and political power, distributist systems rely on a variety of forms of small ownership to distribute economic power: proprietors for property that can be easily used and managed by a single person or a family, cooperatives for larger enterprises, local public ownership for resources like water or sewer systems, employee stock ownership systems, when that is appropriate, and so forth.

In this way, both economic and political power is distributed throughout all levels of society. There are really only two choices when it comes to property and power: concentration or distribution.

The former leads to servility, and the latter to liberty.

ZENIT: What does a distributist society look like? Are there any examples anywhere in the world?

Medaille: Excellent question!

When dealing with economic systems, it is best not to rely totally on abstract theory, but to trust only systems that are on the ground and working.

For example, pure capitalism and pure communism (outside of monastic settings) have never worked, and have no functioning examples. Capitalism has always been imposed through, and sustained by, government power, while socialism has had to allow some freedom in the market in order to function at all.

Distributism, on the other hand, can display any number of working models, both on large and small scales. There is the worker-owned Mondragón Cooperative Corporation of Spain, which has 100,000 worker-owners and does $25 billion in sales; there is the cooperative economy of Emilia-Romagna, where 40% of the GDP is from cooperatives. And there are thousands of ESOPs, cooperatives, mutual insurance companies, and credit unions.

Indeed, the historical truth is that distributism goes from success to success, while capitalism stumbles from bailout to bailout.

What is especially interesting is that a distributist society like Mondragón has been able to provide its own social safety networks, school systems, training institutes, R&D Centers, and a university all from its own funds and without government subsidies.

It is much closer to the libertarian ideal than anything that laissez-faire has ever been able to produce.

ZENIT: By offering practical solutions to today's toughest economic problems, your book seems to address the many critics of distributism who ignore it for its supposed impracticality or its neo-agrarianism. What are the basic principles or building blocks a distributist uses to compare and construct policy alternatives?

Medaille: The major principles of distributism are subsidiarity and solidarity.

By subsidiarity, we mean that the lowest levels of society, starting with the family, are the most important, and as much decision making authority and power as possible should reside there. Higher levels justify their existence only by the help they can give to the lower levels.

Solidarity dictates that any political decision must keep in mind the poorest and most vulnerable members of society.

Subsidiarity is difficult to realize in a situation where power is concentrated; only by the diffusion of economic and political power (and the two are just different aspects of the same power) can local communities and families flourish.

ZENIT: Does distributism have any basis in Catholic social teaching or the papal encyclicals like the recent Caritas in Veritate?

Subsidiarity and solidarity are, of course, straight out of the social encyclicals, and distributism owes much to its Catholic founders, G. K. Chesterton and Hilaire Belloc.

That being said, a distributist social order does not depend on the prior establishment of a Catholic social order. However, we believe that such a social order will thrive under a distributist system.

ZENIT: Can you briefly summarize the distributist solution to the seemingly intractable problem of providing as many people as possible with affordable health care?

Medaille: Our country has just been through a rather poisonous debate on this topic, one which entirely missed the real point, because it was based on a spurious distinction between socialism and the private market.

The reality is that in health care we have neither. The government already pays 45% of all health care costs, and the “private” market is in fact dominated by government-enforced monopolies through patents, licenses, and “certificates of need” for hospitals.

Indeed, the signature of a monopolistic market is constantly rising prices even in the face of declining services, and that is the reality of our health care market.

Now, distributism would not be of much use unless it could solve practical problems like this, and it can.

In brief, in the book I propose an expansion of the licensing authorities to increase the supply of medical personnel; it proposes a way of expanding research and development without resorting to monopolistic patents; and proposes the formation of cooperatives of doctors and other personnel which can serve as both “insurance” companies and health care delivery firms, thereby giving the firm the ability to ensure health rather than just treat diseases.

Of course, I go into much more detail on this in my book, but yes, distributism offers a new path on many of the most vexing problems.

SOURCE

Distributism and the Economic Crisis (Zenit.org)

LINKS

"Toward a Truly Free Market": http://www.isi.org/books/bookdetail.aspx?id=eb565cff-c3d4-44ed-8029-bd74a87f2a2b

 

Californian city considers Mondragon model

The Green Party mayor of Richmond, California, a city of 100,000, Gayle McLaughlin is visiting Spain to investigate the Mondragon cooperative model.

"Given the current job crisis and economic downturn, we need to think outside the box and explore every possibility for turning things around, both at the local and national level," McLaughlin says, the Independent Political Report says.

"To this end, I am attending an international seminar this week (at no public expense) with the Mondragon Cooperative Corporation in Spain, a 54-year old network of over 100 worker-owned cooperatives, to learn about a very promising strategy for job creation, worker empowerment and local wealth building. http://www.mondragon-corporation.com/language/en-US/ENG.aspx .

"There is much potential for Richmond, and upon my return I look forward to bringing local stakeholders together to look seriously at this model," McLaughlin believes.

SOURCE

Gayle McLaughlin re-election bid update (Independent Political Report)

LINK

http://www.mayorgayle.net/

Worker coops meet at Berkeley

A shadow is hanging over America, the shadow of a wrecked economic system. Tens of millions of unemployed remain despondent about ever finding a job again, an entire young generation despairing of any hope for a good life, while corporate market pundits pontificate that our system creates the best of all societies, and no alternative is possible. A nationwide group gathering in Berkeley this coming weekend is putting the lie to the pundits.

The U.S. Federation of Worker Cooperatives (USFWC), is holding its biannual conference at the Clark Kerr Center at UC August 6-8, riding an exhilarating wave of a movement that has swelled to worldwide importance over the past decade. The United Nations has recognized and encouraged this growth, and has asked all governments to form a partnership with the cooperative movement to solve the global problems of unemployment and poverty, problems that the current economic system is not structured to solve, and that are poised to engulf the world in disasters of enormous magnitudes. The UN has declared 2012 the International Year of Cooperatives.

All around us numerous people search anxiously for a job, while numerous storefronts and workspaces lie empty. What stands in the way of these two vast resources coming together to create new businesses and jobs on a large scale? The dominant economic system controls the resources to make that happen, but full employment and economic equity were never goals of the capitalist system. On the other hand, those goals mesh well with the cooperative movement. However, while numerous unemployed people would happily take a job as co-owner of a cooperative business, there are comparatively few cooperative jobs and businesses. At the precise moment that a great influx of resources is needed, funding sources are cut back. One focus of the conference is to examine different strategies for cooperative development, creating mechanisms to organize and finance the movement, and ultimately to fulfill its mission.

- John Curl

Worker Co-ops Descend on Berkeley (Berkeley Daily Planet)

LINKS

U.S. Federation of Worker Cooperatives

German automative manufacturer sells to Mondragon

A Mondragon cooperative has agreed to buy the last remaining facility operated by insolvent German automotive manufacturer AKsys.

The plant in Peine, Germany was bought by FPK sa (Zamudio / Spain), which itself belongs to Batz lightweight technologies, PlastEurope reports.

As a result of the sale, some 100 of the jobs in Peine will be secured, although the insolvency administrator said several positions also had to be shed.

Batz-FPK is part of Mondragon. In April this year, the cooperative had acquired the 50% share AKsys formerly held in the FPK joint venture. Mondragon consists of four divisions: finance, industry, trade and intelligence.

For the last 50 years, the Batz affiliate has been developing and manufacturing wheel changing modules and systems, modular pedal systems, hand break components and metallic structural parts. FPK in turn delivers function-oriented structural components made predominantly of reinforced plastics.

Oskar Goitia, CEO of Mondragon’s automotive division, said a particularly important addition for his cooperative was the know-how of the workers in Peine, as well as the processing technologies, the products and the customers.

“This takeover will strengthen our position in Germany”, he added.

SOURCE

Last German plant sold to Basque Mondragon group (PlastEurope)

Mondragon and the economic meltdown

The current economic crisis will not have been in vain if the world is reminded that grass roots initiative can triumph even over seemingly overwhelming adversity. In the aftermath of the devastation of the Basque region of Spain in the Spanish Civil War, a young priest, Don Jose Maria Arizmendiarrieta, himself only recently released from concentration camp confinement and narrowly spared imminent execution, was sent by his bishop in 1941 to the small steel industry town of Mondragon.

It was here over the subsequent decade and a half that he through painstaking pastoral care, grassroots organization, community development, consciousness-raising and technical education laid secure foundations for the great complex of some 260 worker-owned industrial, retail, agricultural, construction, service and support co-operatives and associated entities that the world now knows as the Mondragon Co-operative Corporation.

From a standing start in 1956, the MCC has grown to the point where by mid-2008 it was the seventh largest business group in Spain. Annual sales increased between 2006 and 2007 by 12.4 per cent to some $US20 billion, and overall employment by 24 per cent, from 83,601 to 103,731. Exports accounted for 56.9 per cent of industrial co-operative sales, and were up in value by 8.6 per cent. Mondragon co-operatives now own or joint venture some 114 local and overseas subsidiaries.

Hard-hit by the economic meltdown as like other business the co-operatives now find themselves, their members are tightening their belts in a further exercise of the solidarity that has enabled them to weather previous major downturns, and achieve new heights. For example, in 2008 worker owners at the Fagor appliance co-operative elected to forego the additional four-week's pay normally due to them over the Christmas period, and have subsequently cut their pay by eight per cent. As the MCC's Human Resources Director, Mikel Zabala, points out, "We are private companies that work in the same market as everybody else. We are exposed to the same conditions as our competitors". What then are the attributes to which Mondragon owes its remarkable success?

- Dr Race Mathews

Full article @ The Distributist Review

US Steelworkers Union sign agreement with Mondragon

In a landmark agreement, the US United Steelworkers Union and MONDRAGON Internacional, S.A. have announced a framework agreement for collaboration in establishing MONDRAGON cooperatives in the manufacturing sector within the United States and Canada.

The USW and MONDRAGON will work to establish manufacturing cooperatives that adapt collective bargaining principles to the MONDRAGON worker ownership model of “one worker, one vote,” Prosperity Agenda reports. 

“We see today’s agreement as a historic first step towards making union co-ops a viable business model that can create good jobs, empower workers, and support communities in the United States and Canada,” said USW International President Leo W. Gerard.

“Too often we have seen Wall Street hollow out companies by draining their cash and assets and hollowing out communities by shedding jobs and shuttering plants. We need a new business model that invests in workers and invests in communities.” 

Josu Ugarte, President of MONDGRAGON Internacional added: “What we are announcing today represents a historic first – combining the world’s largest industrial worker cooperative with one of the world’s most progressive and forward-thinking manufacturing unions to work together so that our combined know-how and complimentary visions can transform manufacturing practices in North America.”

Highlighting the differences between Employee Stock Ownership Plans (ESOPs) and union co-ops, Gerard said, “We have lots of experience with ESOPs, but have found that it doesn’t take long for the Wall Street types to push workers aside and take back control. We see Mondragon’s cooperative model with ‘one worker, one vote’ ownership as a means to re-empower workers and make business accountable to Main Street instead of Wall Street.”

Both the USW and MONDRAGON emphasized the shared values that will drive this collaboration. Mr. Ugarte commented, “We feel inspired to take this step based on our common set of values with the Steelworkers who have proved time and again that the future belongs to those who connect vision and values to people and put all three first. We are excited about working with Mondragon because of our shared values, that work should empower workers and sustain families and communities,” Gerard added.

In the coming months, the USW and MONDRAGON will seek opportunities to implement this union co-op hybrid approach by sharing the common values put forward by the USW and MONDGRAGON and by operating in similar manufacturing segments in which both the USW and MONDRAGON already participate.

SOURCE

Steelworkers Form Collaboration with MONDRAGON, the World’s Largest Worker-Owned Cooperative (Prosperity Agenda)

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

http://globalguerrillas.typepad.com/globalguerrillas/2010/06/the-only-investment-worth-having.html?cid=6a00d83451576d69e20133f0369254970b

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

Orchards, greenhouses could fill abandoned streets of Detroit (Associated Press

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 (packagingnews.co.uk)

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) 

Read more: http://www.triplepundit.com/2010/05/evergreen-cooperatives-cleveland-foundation/#ixzz0qeEvciKG

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)

http://assets.newamerica.net/blogposts/2010/shared_business_ownership_an_asset_building_strategy-32264