Mondragon co-op model gains U.S. adherents

Among a narrow band of U.S. academics and activists, the worker cooperative model provided by the Mondragón Cooperative Corporation has long been attractive. See, for instance, this report from David Morris of the Institute for Local Self-Reliance dating from 1992. The story of Mondragón is told well by the late Vermont sociologist George Benello here.  Some basic highlights: In 1943, Don José María de Arizmendi-Arrieta, a Spanish priest (better known as Father Arizmendi) who had narrowly missed being put to death by Franco as a result of his support of the Republican side in the Spanish civil war, founded a technical school in the small Basque city of Mondragón.  In 1956, five graduates of that school helped found a worker cooperative, Ulgor, that employed 24 and produced kerosene stoves.  Over the following 50-plus years, Mondragón has grown to become a worker-cooperative controlled holding company consisting of roughly 260 businesses and over 100,000 employees.  In 2007, Mondragón reported 16.7 billion Euros in sales (which, depending on the Euro exchange rate, is roughly $US 22-24 billion).

By contrast, in the United States, worker cooperatives have been largely a niche movement. According to the US Federation of Worker Cooperatives, “there are over 300 democratic workplaces in the United States, employing over 3,500 people and generating over $400 million in annual revenues.” Until now at least, the leading form of employee ownership has consisted of companies owned in whole or part by employee stock ownership plans or ESOPs.  Here, the numbers are more impressive: the National Center for Employee Ownership reports that, as of 2006, 13.7 million workers in the United States had $928 billion in assets in these enterprises.  In the wake of the current economic crisis, however, the worker cooperative model has become increasingly attractive, particularly, as notes blogger Bernard Marszalek here, in the Midwest.