Mondragón Cooperative Corporation
From Wikipedia, the free encyclopedia
Mondragón Cooperative Corporation (Spanish: Mondragón Corporación Cooperativa - MCC) is a group of manufacturing and retail companies based in the Basque Country and extended over the rest of Spain and abroad. It is one of the world's largest worker cooperatives.
Contents |
[edit] Foundation
The company was founded in Arrasate, a town in Gipuzkoa known as Mondragón in Spanish. The town had suffered badly in the Spanish Civil War and there was mass unemployment. A young priest, Father José María Arizmendiarrieta, arrived in 1941 and decided to focus on the economic development of the town, settling upon co-operative methods to achieve his goals. Co-operatives and self-help organisations had a long tradition in the Basque Country but had died away after the War.
In 1943, Arizmendi set up a democratically-managed Polytechnic School. The school played a key role in the emergence and development of the co-operative movement. In 1956, five young graduates of the school set up the first co-operative enterprise, named ULGOR (now Fagor Electrodomésticos) after their surnames, which during its early years focused on the manufacture of petrol-based heaters and cookers. In 1959, they then set up the Caja Laboral Popular ("People's Worker Bank"), a credit union that both allowed the co-operative members access to financial services and subsequently provided start-up funds for new co-operative ventures. New co-operative companies started up in the following years, including Fagor Electrónica, Fagor Ederlan and Danobat.
It has also extended by inviting other co-operatives to join the group and offering rescue for some failed companies on condition of co-operativization.
The group companies give preference to fellow co-operatives. Co-operative workers manage their finances through Caja Laboral, hold health insurances and pension funds at Lagun Aro and have discounts at Eroski markets and on Fagor appliances. Eroski stores are furnished by co-operative trucks. Members may have studied at a group ikastola and extended studies at the Mondragoón University while having a labor stage at a co-operative.
When a cooperative has got in economical trouble, workers have preferred to take pay cuts over layoffs. If the situation is too bad, redundant workers are sought positions in other group co-operatives.
[edit] Current developments
In the 1980s, the various companies responded to pressures of globalisation by joining together as the Mondragón Cooperative Corporation . The MCC is now the Basque Country's largest corporation, the seventh largest in Spain. It is considered the world's largest worker co-operative. In 2002 the MCC contributed 3.7% towards the total GDP of the Basque Country. It has 38 industrial plants abroad, and this figure is expected to rise to 60 plants by 2005.
Education has always been key to MCC and its development, hence the conversion of the old school into the University of Mondragón in the 1990s, a private university to promote further development. Some 4,000 students attend the university campuses in Oñati , Eskoriatza and Mondragón.
MCC now constitutes over 150 companies, with important manufacturing and engineering interests, as well as retail, financial and educational arms. Its supermarket arm, Eroski, is the largest Spanish-owned retail food chain and the fourth largest retail group in Spain.
The Basque government and the tax authorities of the Basque provinces have special measures to help co-operatives. The Deba county around Mondragón has kept a very high employment rate even during Basque industrial crisis.
[edit] Organization
The sovereign body is the 650-member Co-operative Congress, its delegates elected from across the individual co-operatives. The annual general assembly elects to a governing council which has day-to-day management responsibility and appoints senior staff. For each individual business, there is also a workplace council, the elected President of which assists the manager with the running of the business on behalf of the workers.
[edit] Backlash
The huge size of MCC has caused tensions between the needs of an international corporation and adherence to traditional co-operative principles. There have been accusations that factories have been relocated by stealth abroad, mainly in Latin America, where workers are not given the same membership rights. In 2004, it was estimated that just less than half of the then 70,000-strong workforce were full members of the co-operative, most of which will become full members after completion of a probationary period. Since members cannot be separated from the cooperative except for misconduct, new potential members must undergo a probationary period to determine whether they are an appropriate fit for the cooperative. Potential members must also provide a buy-in capital contribution to the cooperative equal to about one year's base salary at the lowest level of employment before becoming a full member, which is usually financed by a loan from the cooperative bank. It is claimed that these measures are taken to discourage adventurism and ensure that all members have a financial stake in the success of the cooperatives.
Trade unions have complained of anti-unionizing policies in Eroski. Some have accused Mondragón of using the co-operative ideals as a marketing figleaf.
The distance between the most senior levels of management and individual managers has also caused concern. There is less feeling amongst the members or socios that they run the company. Measures to prevent too great a gap between manager and worker payscales have been relaxed to better compete for high-level professionals, leading to greater tensions. In recent years, some co-operatives have withdrawn from MCC to try and reinstate a more personal management of each company by its workers.
In 2004, the merger of Eroski with the Valencia-based cooperative Consum failed and both companies went separate ways.
[edit] See also
[edit] External links
- MCC homepage (multi-lingual--English, French, German, Spanish, and Basque (Euskara))(uses Macromedia Flash, but it's not required)
- CEPES MCC is member of the Spanish National Confederation of social economy Enterprises.
- Work Changes within Mondragón
[edit] Further reading
- We Build the Road as We Travel: Mondragon, A Cooperative Social System, Roy Morrison. ISBN 0965890317
- The Mondragon Cooperative Experience (1993), J. Ormachea.
- Cooperation at Work: The Mondragon Experience (1983), K. Bradely & A. Gelb.
- Values at Work: Employees participation meets market pressure at Mondragon (1999), G. Cheney.
- Mondragon: An economic analysis (1982), C. Logan & H. Thomas.
- The Myth of Mondragon: Cooperatives, Politics, and Working-Class Life in a Basque Town (1996), by Jarrin Kasmir, State University of New York Press.
- From Mondragon to America: Experiments in Community Economic Development (1997), by G. MacLeod, University College of Cape Breton Press. ISBN 0-920336-53-1
