The following is an edited version of two articles written by Bernard Marszalek, one of the organizers of the Just Alternative Sustainable Economics Festival.  For more information, see the JASecon web site.

A recent weeklong conference in Sonoma, California – The Economics of Peace – featured a day devoted to lectures and workshops on the cooperatives associated with the Mondragon Cooperative Corporation (MCC). This event marks the third occasion in the last six months where representatives from the MCC, located in the Basque region of Spain, appeared in the US. Previously both Cleveland and Detroit hosted discussions with the MCC. While US developers of worker cooperatives have toured the Mondragon complex since the 80’s, these recent visits are noteworthy as firsts for the MCC.

Let me begin by noting the amazing success of an experiment (the term the MCC uses) begun by a poor parish priest over sixty years ago. Today, the MCC is a complex worth 24 billion dollars and employing 100,000 in 120 enterprises all over the globe. It comprises factories, banks, insurance agencies, and a network of retail stores throughout Spain. Globally the MCC invests in industries located all over Europe, Latin America, and Asia.

In the early 90’s Mondragon learned that a large French retailer planned to open in Spain Wal-Mart-size “big box” stores. Since Mondragon has a large domestic appliance presence in Spain, to lose retail outlets to a foreign operator threatened their national distribution. Mondragon began buying up various retails chains throughout Spain.

About ten years ago co-op membership was opened up to these new retail workers on a limited basis to ease the transition into the corporation, but the job growth of these retail outlets was outstripping the rate at which membership was attained.  So early this year Mondragon decided to open up membership to all of the 40,000 retail employees. This appears to be a successful policy.

Mondragon has acquired other firms for similarly strategic reasons. For example Mondragon manufactures machinery that makes solar panels, but does not fabricate the panels themselves. MCC purchased a Chinese manufacturer to serve as a supplier for these machines using Mondragon’s designs. Similar practices occur all over the globe. The MCC doesn’t buy these firms to spread cooperative principles, but to invest in them for their larger economic viability. In some cases these firms may not be profitable, but with new proprietary inputs, Mondragon expects that over a period of time they will be. Mondragon argues therefore that if the firm is not profitable when purchased why would the workers want to buy in?

In other cases Mondragon might find itself in a country with no legal avenue for creating a worker-cooperative, or where the government actively opposes such a development.

Along with its huge manufacturing operations, Mondragon facilitates financial services all over Spain and beyond. It also supports a development agency and a university. The MCC’s bank aids the development agency to guide both new and established firms to succeed. These efforts in turn are supported by the research conducted through the university.

At Mondragon worker participation underlies the entire structure since the whole edifice is founded on the votes of the workers in general assembly. The workers elect the management of the co-ops.

At Mondragon the members of the co-ops are somewhat insulated from the worst excesses of capitalist volatility. During this depression the worker-members agreed to wage cuts and reduced hours in order to spread the misery more equitably. The non-member workforce, which numbers approximately 15% of the total, faced lay-offs as in any capitalist firm.

I will end with one story that Michael Moore tells about his worried anticipation when the section from Capitalism: A Love Story on worker cooperatives was shown at the AFL-CIO convention. He braced for, at best, a bitter silence and, at worst, a vocal guffawing when a hall full of union members saw workers in his film expressing their satisfaction with jobs they controlled through their cooperative, democratic structures. The response from the audience was rousingly positive. Loud applause and cheers.

The Mondragon Model in the United States

In Cleveland, Ohio the Evergreen Cooperative Laundry will be the first of a series of worker co-ops to be established. It is part of a multi-billion dollar initiative of the Cleveland Foundation to redevelop a neighborhood that needs employment.

The idea of worker co-op development in the neighborhood came out of a community wealth-building roundtable held in December, 2006. The Cleveland Foundation, the Gund Foundation, and the Sisters of Charity called upon the nonprofit Democracy Collaborative to organize the event.

The new laundry will use the least toxic chemicals available, use an energy-saving water recycling system to reduce heating costs, install skylights, and eventually install solar panels. It will be one of the greenest laundries in the country.

Currently a series of training programs are underway to enhance the skills of the 25 new workers. Besides the usual basic job skills and the specialized machine training, environmental sustainability practices and procedures and training in cooperative participation have been added to the curriculum.

In addition to the laundry, there are plans to develop a solar installation and service enterprise and an industrial scale greenhouse. Inspired by the Mondragon model, after start-up costs are met, each new co-op will support future co-op development with a small fraction of its profits.

This Fall in Western Wisconsin, construction will begin on the Driftless Foods Co-op’s first manufacturing enterprise, an individual quick-frozen vegetable processing plant. Planned future projects include sustainable poultry processing, hydroponic tomato production, and a regional pet-food line.

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