Mondragon – a corporation owned by the workers

Posted on 07/06/2012 by


I’ve spent most of the last week recording interviews in Mondragon in the Basque Country, Northern Spain, for a radio piece for Making Contact. Mondragon Corporation is probably unique, not just in its size – it has over 83,000 workers in over 250 companies – but in its structure. It is actually a network of worker owned co-operatives, linked by a complex set of rules that sees them sharing profits, pooling financial and technical resources, and democratic decision making.

It was founded by a visionary priest, father José María Arizmendiarrieta, who arrived in the town of Mondragon shortly after the end of the Spanish Civil War to find a town divided and impoverished by the conflict. He set up a technical college, believing that education and the creation of jobs where the workers were also owners was the key to transforming the fortunes of the town.

The result was the creation of not just one co-operative, but ultimately hundreds. The key decision to create their own savings bank, Caja Laboral, allowed the first cooperatives to generate their own finance, and to expand, creating new cooperatives and purchasing other businesses. Today, the corporation’s businesses include a bewildering array of activities; white goods, elevators, car parts, a supermarket chain, a bank, research centres, and even a rabbit farm (which I visited on Tuesday.)

One of the most impressive aspects to the corporation is the way in which it has been able to keep its worker/owners employed, whilst Spain currently has the highest unemployment rate in Europe. Part of the reason for this is that the different co-operatives contribute a percentage of their profits into a solidarity fund, which can be accessed by co-operatives when they are making a loss. Another factor is that rather than fire people (and you cannot actually fire a worker/member/owner) the corporation can retrain and move workers from a firm that is performing badly, to another that is doing better.

Finally, because workers are also owners, they are also willing to tighten their belts in the hard times. For example, workers from Fagor, the kitchen and white goods manufacturer that developed out of the very first cooperative, recently voted to cut the wages of everyone working at the company – from managers to those working on the production lines.

That said, Mondragon is not without it’s problems and challenges, and speaking to people from different co-operatives and from the University of Mondragon over the last week has also revealed many questions about the future of this unique business. Above all, there is a concern that the genuine spirit of co-operative culture, of shared decision making, has to be reinforced through training – and there are pressing issues, such as the number of workers in factories abroad who are not cooperative members.

But to find out how they intend to tackle these issues, and to hear from the people there, you’ll have to wait for my radio piece for Making Contact. I’ll be editing the piece later this month, once I’m back from Spain – I’ll let you know on the blog when the broadcast date will be.