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Can Unions and Cooperatives Join Forces? | Truthout.com

An Interview With United Steelworkers President Leo Gerard

By Amy Dean

United Steelworkers President Leo Gerard talks to Truthout about the challenges and opportunities of a new labor model: the union co-op.

As the economic crisis festers for many long-term unemployed and underemployed people, the idea of worker-owned and worker-run cooperatives has become ever more appealing as a possible pathway toward an economy that works for everyone. Theorists such as Gar Alperovitz have argued for the importance of cooperatives in providing a nuts-and-bolts alternative to dominant methods of economic production: They offer an example of a different way of doing business that people can see and experience in their own lives.

As someone who loves to see organized labor on the move in any form, I am interested in the role that unions can play in promoting co-ops – and I have been excited to see the United Steelworkers take an especially proactive role in bolstering the cooperative movement. I spoke with Steelworkers President Leo Gerard about how union/co-op hybrids could change the experience of work for those who clock in every day and about the depth of vision it will take to make union co-ops a serious part of the American economy.

Given that cooperatives currently make up only a tiny percentage of our economy, I first asked Gerard whether he thought co-ops could be viable at a larger scale.

“People don’t realize there are millions of people in the United States and Canada that are already members of co-ops,” he said. “When I was a kid growing up in northern Ontario, my parents used to shop at a food co-op. I think that there are already a lot of these businesses; people just don’t know it.”

Gerard next discussed the structure of “union co-ops” that the Steelworkers have begun, in partnership with Spain’s Mondragon cooperatives. Here’s how it works: Employees can join the union of their choice, and they are guaranteed a living wage, benefits and a collective bargaining agreement. In some of the new union co-ops, workers get ownership shares in the enterprise, which they pay for a little at a time out of their paychecks and which accrue equity over a period of six or eight or 10 years. Workers vote on the composition of the management team and collectively bargain with that team to set workers’ wages, benefits, and procedures for handling disputes.

Read the full interview via Truthout.

C-W Interview: Rob Witherell | Community-Wealth.org

Interview of Rob Witherell

Representative, United Steelworkers (USW)

Interviewed by Steve Dubb, Research Director, The Democracy Collaborative, March 2013

Rob Witherell works for the United Steelworkers union at its headquarters in Pittsburgh, Pennsylvania. In addition to working on contract negotiations, benefits analysis, research and organizing, Robhas also led the United Steelworkers’ efforts on developing union co-ops and is the union’s lead liaison with the Mondragón Cooperative Corporation.

Could you tell us a bit about your history in labor organizing and what has led you to dedicate your career to the labor movement?

When I was an undergrad at the University of Massachusetts, our tuition and fees doubled in the years I was there, and so I got involved in student organizing and student government.  That experience led me into politics and working on political campaigns, which eventually led to the opportunity to earn my Master’s degree in Labor Studies.  As a graduate research assistant, I was a UAW member and our union contract allowed me to attend grad school full time with full health insurance for a whopping $300 per semester, and earning the best pay rate I had ever had.  Since my undergrad degree is a Bachelor’s in Business Administration. I am probably one of very few people around who has both a business and a labor degree.

Could you discuss what put co-op organizing on the Steelworker agenda, given that employee-owned cooperatives are not exactly the typical way unions today go about organizing new members?

In the late eighties and early nineties we put a lot of efforts into ESOPs [employee stock ownership plan-owned companies] as a way to rescue troubled companies.  In some cases, that meant complete worker ownership. For most of them, it meant minority worker ownership.

And what we found is that where things didn’t change at all, the ESOP wasn’t successful.  Where we had some success — and where the ESOPs still exist — the companies are typically 100% employee-owned. A key to these successes was that there was a change in the culture of the workplace, so that the ownership of the company means more to the workers than the value of their shares.

Could you elaborate on the differences between the successful and unsuccessful ESOPs?

In a lot of the cases, we were dealing with cash-strapped companies. Doing these buyouts were a way of exchanging shares for concessions. So the business stayed open, but nothing really changed in terms of the product, market, business structure or business plan. Eventually those shares got bought out. So while it save those companies in a lot of cases, our members didn’t feel any sense of ownership.

So the ones that have been able to survive as employee-owned companies are the ones that started functioning more like a cooperative — that is, they were companies which had an active union and a company management that listened to its workers. In these companies, there was more of an emphasis on having a partnership with the union and in talking and listening to employees and respecting employees as owners.

Read the whole interview at Community-Wealth.org.

Can Co-ops Save Unions? | In These Times

Labor-cooperative partnerships may herald a new strategy for labor–if they can get off the ground.
BY REBECCA BURNS

What has 18 owners, no bosses and high hopes for fostering workplace democracy in America? New Era Windows LLC, a worker-owned cooperative formed last year by members of United Electrical Workers (UE) Local 1110.

After occupying their factory to save their jobs—twice—workers at a closing Chicago windows plant decided last year to try a new tack: running the business themselves. They purchased equipment from their former bosses and are now setting up a new factory they believe will create good jobs in the city’s depressed economy.

New Era is one of a growing number of union-backed cooperatives nationwide that could herald a new strategy for labor. In his survey of existing cooperatives, economist Gar Alperovitz has calculated that the number of workers in partly or wholly employee-owned companies now exceeds those who belong to private-sector unions—a statistic that speaks both to the perilous state of the labor movement and the promise of reviving it through new structures.

In the case of New Era, the decision to form a cooperative was the result of a long battle with management. In 2008, upon being told that their factory would be closed and they would be fired immediately without severance pay, workers staged a six-day occupation of the Republic Windows and Doors factory and emerged victorious. Their stand, coming at the height of the financial crisis, was celebrated nationwide. It also emboldened them to occupy once again in February 2012, when new owner Serious Energy announced that it, too, would be closing the plant. The workers’ journey from occupiers to owners was paved in part by UE’s tradition of militancy, which some progressives hoped would inspire other unions fighting mass layoffs.

The labor movement at large hasn’t reprised the 1930s-era tactic of occupying factories in order to regain a foothold in existing workplaces. But a growing number of unions, led by the United Steelworkers (USW), are exploring creation of new worker-owned cooperatives as a strategy for contending with the offshoring of U.S. jobs. Like the workers who formed New Era Windows, USW began experimenting with cooperatives partly out of necessity—as job losses mounted amidst the financial crisis, “there seemed to be an opening to consider how we might create a better model, because everything was falling apart,” says Rob Witherell, USW’s cooperative strategist. USW decided to partner with Mondragon, Spain’s famous group of cooperatives, to create a template for union co-ops.

Now, USW is helping launch several pilot projects, including a green laundry in Pittsburgh that could replace some of the 100-plus jobs lost when an industrial laundry in the area closed several years ago. Members of United Food and Commercial Workers are currently employed in an urban farming cooperative in Cincinnati, with more projects planned under the behest of the Cincinnati Union Cooperative Initiative.

Read the whole article from In These Times.

Learn more about the union co-op model from the United Steelworkers.

Interview With Rob Witherell: Representative, United Steelworkers (USW) | Truthout

By Steve Dubb

Rob Witherell works for the United Steelworkers union at its headquarters in Pittsburgh, Pennsylvania. In addition to working on contract negotiations, benefits analysis, research and organizing, Rob has also led the United Steelworkers’ efforts on developing union co-ops and is the union’s lead liaison with the Mondragón Cooperative Corporation.

Could you tell us a bit about your history in labor organizing and what has led you to dedicate your career to the labor movement?

When I was an undergrad at the University of Massachusetts, our tuition and fees doubled in the years I was there, and so I got involved in student organizing and student government. That experience led me into politics and working on political campaigns, which eventually led to the opportunity to earn my Master’s degree in Labor Studies. As a graduate research assistant, I was a UAW member and our union contract allowed me to attend grad school full time with full health insurance for a whopping $300 per semester, and earning the best pay rate I had ever had. Since my undergrad degree is a Bachelor’s in Business Administration. I am probably one of very few people around who has both a business and a labor degree.

Could you discuss what put co-op organizing on the Steelworker agenda, given that employee-owned cooperatives are not exactly the typical way unions today go about organizing new members?

In the late eighties and early nineties we put a lot of efforts into ESOPs [employee stock ownership plan-owned companies] as a way to rescue troubled companies. In some cases, that meant complete worker ownership. For most of them, it meant minority worker ownership.

And what we found is that where things didn’t change at all, the ESOP wasn’t successful. Where we had some success — and where the ESOPs still exist — the companies are typically 100% employee-owned. A key to these successes was that there was a change in the culture of the workplace, so that the ownership of the company means more to the workers than the value of their shares.

Could you elaborate on the differences between the successful and unsuccessful ESOPs?

In a lot of the cases, we were dealing with cash-strapped companies. Doing these buyouts were a way of exchanging shares for concessions. So the business stayed open, but nothing really changed in terms of the product, market, business structure or business plan. Eventually those shares got bought out. So while it save those companies in a lot of cases, our members didn’t feel any sense of ownership.

So the ones that have been able to survive as employee-owned companies are the ones that started functioning more like a cooperative — that is, they were companies which had an active union and a company management that listened to its workers. In these companies, there was more of an emphasis on having a partnership with the union and in talking and listening to employees and respecting employees as owners.

How did the Steelworkers become aware of Mondragón?

In 2008, I was in Bilbao at an economic development meeting there to convince or help convince suppliers of one of our employers here in Pennsylvania to expand their supply operations into the United States. And while I was there, thanks to Michael Peck, who is Mondragon’s North American delegate, I had the opportunity to talk with Jesus Herrasti who was the President of Mondragón International division at the time. And so it was a good conversation. We found that we had a lot in common. And that led to a lot more conversations with [United Steelworkers President] Leo [Gerard]. And that led to the point when we announced our collaboration in 2009.

Read the rest of the interview from Truthout.

The Mondragón Cooperatives: An Inspiring Economic Hybrid | Tikkun

by Georgia Kelly

Members of the Mondragón Cooperatives vote on a proposed 2013-2016 socio-corporative policy. Credit: Mondragón Corporation.

Riding from the Bilbao Airport to the small town of Mondragón, one is struck by the sheer beauty of the forested hills and verdant valleys in Spain’s Basque Country. The roads are as smooth as if they were paved yesterday, and there is nothing in this bucolic landscape to suggest anything is amiss in Spain.

However, the economic woes in this country are well known. As of November 2012, unemployment has risen above 25 percent and calls for more austerity have been greeted with demonstrations and widespread popular opposition. But, in spite of the country’s financial crisis, there is a solution quietly thriving in northern Spain—a solution that has nothing to do with austerity.

Sixty years ago, the Basque region was the poorest area of Spain. Today, thanks to the cooperative culture, it is the wealthiest. The dramatic transformation leads directly back to the arrival of a visionary Catholic priest, Father Jose Maria Arizmendi, who was sent to oversee a parish church in the small town of Mondragón. Though he questioned the wisdom of this appointment, it didn’t take long for Arizmendi to discover his mission in the impoverished town.

Because of the high unemployment in Mondragón, Arizmendi decided to open a school that would provide skills to some of the unemployed men in the area. The polytechnic school trained workers to make machine parts and provided an ethical foundation for the formation of cooperatives. In 1956, a handful of worker-owners who were trained in this school opened the first cooperative, ULGOR.

From such a modest beginning grew the world’s largest consortium of worker-owned businesses—a consortium that now comprises 120 businesses and more than 83,000 worker-owners.

In 1959, the Mondragón Cooperatives formed their own bank, Caja Laboral. It is this financial institution that has been the engine behind the expansion and financial stability of the cooperatives. In 2009, when 25 percent of all businesses in Spain failed, less than 1 percent failed in the Mondragón Cooperatives.

Read the full article from Tikkun.

MONDRAGON Corporation, winner at the Boldness in Business awards organized by the Financial Times

In the Drivers of Change category. In competition with six other companies from all over the world selected by the jury of the prestigious awards organized by the Financial Times and Arcelor Mittal.

MONDRAGON Corporation has won the Drivers of Change category at the Boldness in Business awards, organized on an annual basis by the London-based daily newspaper the Financial Times (FT) and the Indian corporation Arcelor Mittal (AM). The awards ceremony was held yesterday, 20 March, at the exclusive RIBA (Royal Institute of British Architects) building in London. Representatives from businesses worldwide were present, together with the Chief Executives of the FT and AM, Lionel Barber and Lakshmi Mittal respectively, and the Mayor of London, Boris Johnson. (more…)

More US unions are now running their own businesses | MSNBC

by Ned Resnikoff

A handful of American unions aren’t content to just negotiate with the boss—instead, they’re cutting the boss out of the equation entirely.

For example, the United Steelworkers union (USW) is starting a handful of co-ops across the rust belt in collaboration with the Basque Mondragon Corporation; a sprawling federation of cooperative businesses, in which all of the workers have an equal share in the company and get to vote to determine corporate governance. In Mondragon, company management in the federation is answerable to a democratically Governing Council and General Assembly consisting of all employees. Since 2009, USW has been working to import the cooperative network’s model of workplace democracy into some American pilot programs.

Amy Dean, a fellow with the Century Foundation, tracks the USW’s progress in a recent article for Yes! magazine. The steelworkers union, writes Dean, is currently “helping to launch the Pittsburgh Clean and Green Laundry Cooperative, a new industrial laundry.” Additionally, it is supporting the Cincinnati Union Cooperative Initiative in Ohio, which “has two projects in the pipeline: a railway manufacturing co-op and a cooperative for retrofitting buildings for energy efficiency.”

Read the article from MSNBC’s The Ed Show.

Mondragon: Spain’s giant co-operative where times are hard but few go bust | The Guardian

by Giles Tremlett

José María Ormaetxea is the co-founder of Spain’s seventh biggest industrial group, but he potters around Mondragon in a Ford Fiesta and lives in an ordinary flat in this industrial town tucked into a valley in the country’s northern Basque region.

“Imagine how rich he could have been if he had founded a different sort of company,” said Kepa Oliden, a local newspaper reporter from this town of 23,000 people. “But you won’t find anyone driving a Rolls-Royce in Mondragon.”

Visitors also find little of the new poverty sweeping through other parts of Spain, for up the steep slopes of what locals jokingly call the “sacred mountain” lies the headquarters of the Mondragon Corporation, the remarkably recession-proof company that Ormaetxea helped found in 1956.

There is little flashy about the offices of the Basque country’s biggest industrial company, but then there is nothing normal about what is now the world’s biggest workers co-operative … with global sales of €15bn (£13bn).

Whereas workers at other Spanish companies must answer to shareholder needs – often by sacrificing their jobs – that is not true at Mondragon, which acts as the parent company to 111 small, medium-sized and larger co-ops.

And as Spain struggles through double-dip recession, fierce austerity and 26% unemployment, this is one company that is not about to collapse. Nor has it shed many jobs, with the workforce remaining steady at around 84,000 people worldwide – about a sixth of them outside Spain.

Read the full article from The Guardian.

Why Unions Are Going Into the Co-op Business | Yes! Magazine

The steelworkers deal that could turn the rust belt green.
by Amy Dean

“Too often we have seen Wall Street hollow out companies by draining their cash and assets and hollow out communities by shedding jobs and shuttering plants,” said United Steelworkers (USW) President Leo Gerard in 2009. “We need a new business model that invests in workers and invests in communities.”

Gerard was announcing a formal partnership between his 1.2-million-member union and Mondragon, a cluster of cooperatives in the Basque region of Spain. (more…)