Archive for December, 2013

Rebuilding the Yellow Brick Road

A new worker-ownership evolution-revolution featuring more virtuous capitalism communities of practice is demonstrating that doing well can realistically and profitably be based on doing good. This brave new economic world is emerging from green-shoot, “made in America” antidotes to structural unemployment and income inequality, sprouting ubiquitously among increasing absentee-owner-plagued urban and rural geographies. Hybrid home, land, and workplace sovereignty-recuperation models through local equity enterprises are building a “new green economy” equation, where labor seeks to operate in a permanent seller’s market as does domestic energy sourcing with renewables and distributed generation serving as means to better, more sustaining, stakeholder-centric ends.

Societal benefits from this approach are inclusive and sustaining. Comparative labor advantages are sourced locally, stakeholders equate to shareholders, and profits recycle to the businesses and communities that produce them. Local labor regains its natural place-based sovereignty in regards to its relationship with local and exterritorial capital which, while necessary and hopefully sufficient, is subordinated to the needs of the working class people and communities it finances instead of the reverse. Under this approach, solidarity as a founding American immigrant-inspiring and hosting community principle so closely aligned with freedom and daily liberties is reborn, rewired, and reused. (more…)

Lagun-Aro EPSV’S General Assembly agrees to improve early retirement benefits and the employment aid fund

Note: Lagun-Aro is the social security mutual of Mondragon, one of the three original Mondragon institutional pillars along with the university (Mondragon University) and the bank (Laboral Kutza). 

Lagun-Aro EPSV’s General Assembly today approved an increase in early retirement benefits and greater financing for the Employment Aid Fund, as a speedy response to extra commitments related to the Fagor Electrodomésticos bankruptcy proceedings. These decisions allow the Lagun-Aro EPSV member cooperatives to consolidate the principles of the cooperative movement (solidarity, cooperation and responsibility) through a firm commitment to helping the affected members.

Lagun-Aro EPSV’s Extraordinary General Assembly, held this morning at the Kursaal Palace in San Sebastian, gave majority backing to the proposals put forward by its Board of Directors regarding the provident society’s provision for Employment Aid.

The proposals are designed as a speedy response to the needs arising from Fagor Electrodomésticos’ bankruptcy proceedings, and consist of the following measures:

  • Amendment of some aspects of the Lagun-Aro EPSV Employment Aid regulation, particularly early retirement benefits, which will be increased for cooperatives involved in a wind-up process. This decision will allow the affected worker-members to opt for early retirement at 55 with an 80% consumption advance benefit rather than the 60% determined to date. It will apply to around 300 members.
  • Income reinforcement allowing the entity to meet the cost of the new commitments, with the corresponding increase in provisions paid by the cooperatives, which will be introduced from 1 January 2014.The impact of the increased provision for Employment Aid, which is partially set off by adjustments made to payments for other benefits, amounts to 1.5% of the annual wage.

These two aspects of the Employment Aid were debated in detail at the Extraordinary General Assembly, as this contribution is affected by the current situation at Fagor Electrodomésticos.

However, the situation has no impact on the entity’s pension system, financed by a specific capitalisation mechanism (fund accumulation) which is independent from the other contributions and therefore unaffected.

The step taken at this morning’s meeting complements other advances being made by the cooperatives themselves, who are firmly committed to relocating unemployed worker members, and consolidates the values of solidarity, cooperation and responsibility, all fundamental values of the cooperative movement.

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Read media coverage (in Spanish):

Greater early retirement benefits and a 1.5% increase in employment aid contributions approved at the Lagun-Aro EPSV Assembly | La Vanguardia

Lagun Aro helps Fagor with a 1.5% increase in cooperative contributions, Basque Country | Expansió

Supporters of workers cooperatives flesh out plans for Reading | Reading Eagle

By Don Spatz

Reading,PA —  Reading could get its first workers cooperative next year in its push to foster an alternative business model that competes with Wall Street.
The co-op would be an employee-owned firm composed mostly of apprentices being trained in building demolition, deconstruction (razing all or some of a building, but reusing its parts) and weatherization, said Lawrence P. Murin, special assistant to Mayor Vaughn D. Spencer.

The city would not create any cooperatives on its own, but would foster them as part of its economic development plan, Murin told an audience of 30 people last week at Alvernia University.

He said the city gives several million dollars a year to private firms and nonprofits.

“We believe we have the ability to direct some of that to co-ops,” he said.

The meeting was called to update the community on what co-op progress has been made; rescreen the video “Shift Change: Putting Democracy to Work,” shown at the panel’s February meeting; and tout the virtues of building local cooperatives.

“Why Reading? The answer is that we have a mayor and an administration that recognizes the old ways don’t work,” Murin said.
He said the city’s industrial and tax base has dwindled for 40 years because the city has used tens of millions of dollars to lure businesses here, but they’re gone as soon as the incentives are gone.

That’s because under the Wall Street model, capital is sovereign and labor is a commodity, totally opposite the co-op model where job creation comes first and profits second, said Michael A. Peck, the moderator and the North American delegate for the Mondragon Cooperative based in Spain.
“Nobody here is saying capitalism is wrong,” Peck said. “We’re saying that predatory capitalism is wrong, and virtuous capitalism is good.”

Read the full article via The Reading Eagle.

215 members of Fagor Electrodomésticos already relocated in other MONDRAGON cooperatives

215 members of Fagor Electrodomésticos already relocated in other MONDRAGON cooperatives.

500 more relocations to other group cooperatives forecast over the next six months.

The group of candidates for early retirement based on Lagun-Aro EPSV regulations rises to 300 people.

To date, 215 members of Fagor Electrodomésticos are already working in other cooperatives in the MONDRAGON Corporation. The Corporation has therefore maintained its firm commitment to employment, as just one month after it was announced that Fagor Electrodomésticos was in an arrangement with creditors, it has already succeeded in relocating over 200 members.

It is also establishing a plan that points to 500 new relocations over the next six months, due to the extraordinary response from cooperatives in the group, particularly in the Industry area, who have offered new posts to help solve the employee surplus caused by the financial crisis at Fagor Electrodomésticos. Furthermore, additional efforts by the Distribution area are awaiting confirmation, and its capacity for receiving members will also contribute to providing employment solutions.

In addition, and in accordance with current Lagun-Aro EPSV regulations, it is predicted that the group of candidates for early retirement among members of Fagor Electrodomésticos stands at approximately 300 people.

This way, the Corporation is trying to provide solidarity and a cooperative response to the employment problem through relocations and early retirements, thereby complying with its established aim of offering solutions to a group of between 1,000 and 1,200 people over the next few months.

Coordinated management

The MONDRAGON Corporation is working hard in a coordinated manner through Lagun-Aro EPSV, the Corporate Employment Office, Fagor Electrodomésticos and the other cooperatives.

Several temporary and permanent options which may help to find positions for the employee surplus created by the financial crisis at Fagor Electrodomésticos are currently being assessed.

The Corporation has a long history of generating employment and all divisions are currently following this policy. The diversity of sectors and markets in which the cooperatives operate guarantees that in the short- to medium-term new activity will continue to be generated, resulting in new employment opportunities. The fact that the businesses are competitive in their respective markets is always good news, and particularly now, because this will create options for solving the employee surplus from Fagor Electrodomésticos.

Arrasate, 22 November 2013

The Basque cooperative movement: a model of solidarity |

by Joseba Azkarraga Rodero

These are not the best of times for either the economy or employment. The economic crisis that has assailed our country has had its impact on each and every sector, as well as on each and every company, regardless of its organisational structure. This also means that cooperativism in general, and in the Basque Country in particular, is being affected by this situation.

Yet regarding the somewhat tsunami-like scenario involving the Fagor Group, I consider it necessary to emphasise the strength of the actual MCC Cooperative Group in particular and of the Social Economy in general.

The Social Economy in the Basque Country consists largely of enterprises that embrace, organises themselves and operate according to criteria of democratic governance and the supportive distribution of profits, or also, if the case arises, the joint shouldering of any losses there might be.

This conceptual definition applies, a priori, to a wide range of different enterprises, such as those in the Solidarity Economy, the Voluntary Sector, and the Non-Profit Sector, amongst others, but what seems to be unquestionable, nevertheless, is that the cooperatives lie at the very heart of the Social Economy. That is, at least, the case in the Basque Country.

Basque cooperativism is a value in itself. It is the standard-bearer of a culture and values that are socially advantageous, and I believe it represents a form of value creation that lends cohesion to Basque society.

It is no coincidence that the greater concentration of cooperativism in our country coincides with areas where income is more evenly distributed, where there is lower unemployment and where the average standard of living is higher.

Yet there is another factor that needs to be taken into account. Cooperativism brings plurality to the usual –most common- way of doing business. And this is more important in a society and in an age in which individualism is the norm.

I do not share the view of those who want to present this economy as an almost marginal experience. In the autonomous community of the Basque Country more than anywhere else, the bulk of the social economy corresponds to the type that can be referred to as “ordinary economies”. This is shown by, among other things, the fact the Mondragon Group is the leading business group in the Basque Country.

If the difficulties encountered by a cooperative such as Fagor are used by some to talk about a “failed model”, should we not instead, and by the same logic, be talking about the failure of the capitalist model?

I believe we can single out cooperativism as a clear factor of stability, as it may contribute, and is indeed providing at this very time, operational and organisational solutions to the needs arising in each specific case.

Above all, it is a basic building-block for creating a fairer society in which priority is given to people and their values, amongst which are the principles of work and community interest.

Even during my time as the regional minister for Labour in the Basque government, I have always understood that from the public administration’s perspective, investing in the social economy provides a greater return in social terms because it contributes not only to social cohesion, but also to a healthier democracy and a redistribution of wealth.

Nevertheless, I am not, of course, referring solely to the commitment of the public administrations, because the success of the social economy depends on all of us, and most especially on civil society. Hence the reason that now more ever there is a need to coordinate actions and galvanise public and private collaboration in pursuit of common goals.

Numerous sociological and economic studies have been, and continue to be, forthcoming that have sought to explain the emergence, development and success of Mondragón’s cooperative experience. We should not forget that we are talking about a group that consists of over 100 cooperatives, with a major presence abroad, and grouped into three key sectors: financial, industrial and retail. What’s more, it has its own cooperative university.

No one doubts today that a key factor has been the link between work, financing, training and welfare that has existed since the very origins of the Mondragón cooperative experience. This is clear proof of the need to collaborate as the only way of ensuring the long-term consolidation of the grassroots cooperatives.

The crisis that has affected Fagor has given some people the excuse to attack the cooperative model and even generate alarmism in society, questioning not only the model’s very viability, but also such sensitive aspects as Lagun Aro’s ability to continue providing social welfare coverage. Those who have mishandled this information have done so, moreover, seeking to link Basque nationalism with the failure of the cooperative model. Faced with this dangerous tactic, it needs to be clearly stated that Basque cooperativism is precisely that, cooperativism; and in any case, the fact it includes some people with greater or lesser ties with the world of politics is simply a reflection of our country’s socio-political make-up and, more specifically, of the area where the cooperatives are more densely located.

But I would like to add something else. If the difficulties affecting a cooperative such as Fagor, with all the importance it has within the group as a whole, can be used by some to talk about the “failure of the model”, we might well ask how we should describe the economic situation affecting myriad firms that are not cooperatives. According to that logic, should we not be referring to the failure of the capitalist model?

When we refer to Basque cooperativism, we are dealing with 12.5% simply in terms of jobs in industry, 12.4% of exports and 5.25% of the overall Basque GDP. These figures carry enough weight to make some wish to see an end to this model.

Yet there is still one further aspect I should like to mention; one that defines the model’s unique nature, and even more so at times like these. I am referring to internal solidarity. As has sometimes been the case in the past, this solidarity means that people who have lost their jobs due to the difficulties experienced by the cooperative they belong to may be relocated into other cooperatives in the group. This is one of the characteristic traits of cooperativism: solidarity.

I should like to end by quoting Don José María de Arizmendiarrieta, the true father of Basque cooperativism, who always insisted that he wanted “men (and women) with a capacity to develop, with a sense of community, with the ability to think, to create and to serve “. I don’t think anyone has ever provided a better definition of the essence of the cooperative movement.

Translated and reposted from

By Joseba Azkarraga Rodero, * Former regional minister of Labour in the Basque government


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