Mondragon and the Steelworkers

November 16, 2009 12:13 PM

Last month the United Steelworkers entered into an agreement with the successful Spanish cooperative Mondragon to work toward establishing worker-owned manufacturing coops in the US.

• ZNet has an in-depth look at the agreement and Mondragon
• Cooperate and No One Gets Hurt has an interview with Rob Witherell of USW (bonus: an account of a trip to visit Mondragon, parts 1, 2, 3, 4)
• The NYT Economix blog weighs in

posted by enn (29 comments total)

The line between anarchists and DIY capitalism is beginning to get blurry. I'm waiting for Malcolm Gladwell's upcoming book "Homage to Etsy."
posted by geoff. at 12:35 PM on November 16, 2009 [2 favorites]

So who will the the United Steelworkers strike against now?
posted by LakesideOrion at 12:38 PM on November 16, 2009

Corporate cutting. I can see it now.
posted by seanmpuckett at 12:57 PM on November 16, 2009

This sounds like it could be a very good thing. I hope it works out well.
posted by dng at 12:59 PM on November 16, 2009

Hot stuff coming through!
posted by BobbyDigital at 1:10 PM on November 16, 2009 [1 favorite]

My dad retired as manager of the BOF at a steel mill a few years ago so I know more about this than you can possibly imagaine I called him up and asked him about his labor / management experience. In the 24 years he was in management (and the 10 or so years he was in labor) there were 0 strikes at the mill he worked at.

Not that I believe this wasn't motivated by pure love or anything. There was a collective realization that they could stand together or the Japanese steel industry would devour them whole.

Funny that word, collective.
posted by Kid Charlemagne at 1:12 PM on November 16, 2009 [1 favorite]

So capitalism ... leads ... to ... the workers owning the means of production?
posted by ZenMasterThis at 1:14 PM on November 16, 2009 [17 favorites]

employee ownership earlier :P

cheers!
posted by kliuless at 1:23 PM on November 16, 2009 [1 favorite]

You know what they say, ZenMasterThis:
Capitalism is the exploitation of man by man.
Communism is the other way around.
posted by vivelame at 1:23 PM on November 16, 2009 [7 favorites]

Wait. We have steelworkers? Here? In the US?

Last time I checked everyone here either works for the government or in some kind of digital service industry.
posted by Avenger at 1:31 PM on November 16, 2009

Wait. We have steelworkers? Here? In the US?

Number four in the world if you count the EU as a 'country,' number three if you don't.
posted by jedicus at 1:33 PM on November 16, 2009

So capitalism ... leads ... to ... the workers owning the means of production?
That always was the logical progression Marx imagined, yes.
Capitalism completes the tasks of modernity and then through its inherent contradictions throws up the inevitable crisis that leads proltarianised women and men, through their conscious social action, to move to collective solutions - an interim measure such as this until the general crisis, fully socialised production and distribution after the impending social revolution.
Or have I over-explained the joke? :D
posted by Abiezer at 1:43 PM on November 16, 2009 [11 favorites]

So who will the the United Steelworkers strike against now?

Just Googling "Mondragon strike" gives this account of unrest at a Mondragon operation in Poland, but I can't find how it was resolved.
posted by stammer at 1:46 PM on November 16, 2009 [2 favorites]

The strike in Poland seems to stem from a systemic problem with MCC -- in order to remain competitive with traditionally structured global firms, they reduce costs by opening plants in cheaper countries and denying these satellite employees full ownership in the cooperative. From what I've read (enough to write a shoddy college paper a year or two ago), the actual ratio of worker-owners to contractors, partners, or "partial" members is surprisingly low. Now if only I can find those actual figures...
posted by dreadpiratesully at 2:09 PM on November 16, 2009 [2 favorites]

LakesideOrion: "So who will the the United Steelworkers strike against now?"

see, it's funny because unions are all about frivolous strikes.
posted by shmegegge at 2:14 PM on November 16, 2009 [7 favorites]

In 2004, the workforce was 60% non-owners, according to:

Bakaikoa, B., Errasti, A., & Begiristain, A. (2004, March). Governance of the Mondragon Corporacion Cooperativa. Annals of Public and Cooperative Economics, 75(1), 61-87. Retrieved October 30, 2008, from EconLit database.
posted by dreadpiratesully at 2:15 PM on November 16, 2009

Here is what will happen. It will follow the pattern of a mine in upper Michigan. After the corporation that owned it shut it down, a group of workers got together, organized a new employee-owned company, and opened it back up again. It did very well for several years, so well that it caught the eye of a German company which offered to buy it. They sold the company, with each worker getting maybe $65,000, with the promise that it would be kept open and they would remain employed. The new owner did keep it open for a year, maybe two, and then it was shuttered again.
posted by yclipse at 3:00 PM on November 16, 2009 [3 favorites]

Sounds like dot-com startups with less money.

The new owner did keep it open for a year, maybe two, and then it was shuttered again.

So start it up again.
posted by GuyZero at 3:03 PM on November 16, 2009

Awesome!!!!!!!
posted by wuwei at 3:05 PM on November 16, 2009

I think yclipse example just shows that such projects need more practice. For example, you might sell the main company but have the assets held by a holding company owned by the workers. So they can easily reopen if they get bought & closed down.

I imagine however the German company took some core expertise when departing, thus leaving the town with less competent people. Ain't much you can do about other companies raiding your workforce, especially if they own your company already, but surely that's positive for workers overall.
posted by jeffburdges at 3:24 PM on November 16, 2009

See also : The Take
posted by nestor_makhno at 3:28 PM on November 16, 2009

Yclipse, that example sounds like an unqualified success. The workers got several more years of employment, and a nice cash-out. Most corporate buy-outs leave the workers with jack-squat.
posted by billyfleetwood at 5:35 PM on November 16, 2009 [1 favorite]

Well, I think this is fantastic news. I hope it works. Go Steelerworkers, you well-muscled madmen of progress!
posted by dejah420 at 5:42 PM on November 16, 2009

The scenario yclipse describes is supposed to be avoided with the Mondragon model by disallowing outside capital. Workers can't sell their shares to non-workers. I suppose if the vast majority of workers all wanted to sell out they could vote to change those rules, but the focus on maintaining worker ownership is one of the things that sets a cooperative like this apart from the ESOPs you usually see in the U.S.
posted by dreadpiratesully at 7:25 PM on November 16, 2009

Well, good luck to them, I really hope it works out.

One of my dearest hopes out of the current recession is that the USD's decline will breathe some life back into export-generating industries; the big circle-jerk that is the "service sector" (and I say this as a member of said circle-jerk) does not a healthy economy make.
posted by Kadin2048 at 8:01 PM on November 16, 2009

So exciting! Thanks for posting this.
posted by serazin at 10:53 PM on November 16, 2009

It's promising. There have been some union / cooperative dialogues at the U.S. worker cooperative conferences over the last few years but it always seems like neither the cooperatives nor the union members are quite sure how to breach the divide. On the one hand the unions seem to still be a bit burned by the plant closure rescue activities of the 70s and 80s, the disappointments of the O&O Supermarkets and the ESOPs like Rath Packing. On the other hand, the worker cooperative movement still smarts from the collapse of the Knights of Labor in 1905.

Or more practically, the worker cooperative movement, dominated by small retail and light industrial shops, doesn't really have experience to support the creation of large manufacturing cooperatives. There isn't much governance practice at that level, so even though everyone thinks it would be awesome for the manufacturing sector to cooperativize, no one is quite sure how. Oh that and the capital that would have to be found.

Is there are large cooperative in the U.S. that is in manufacturing? Cooperative Home Care Associates, the largest with 1500+ workers, is service sector. Rainbow Grocery, 200+ is retail. Equal Exchange, 75+, does roasting but primarily distribution. It seems like after so many years of people talking about recreating the Mondragon model in the U.S. it is really going to take them coming and doing development work here for it to bring the competence (and capital) to make it happen. And what is in it for them, exactly? They get a "presence?" Probably they just want people to stop flying to Spain to tour their factories year after year.

It does seem like plant conversions for retiring owners, rather than plant rescues, is the right place to start - a potential tax shelter on capital gains for the outgoing owner, rather than a scrap sale that set many previous job-saving efforts up for a short final gasp.
posted by ioesf at 12:17 AM on November 17, 2009 [2 favorites]

i wish them luck. sometimes, though, luck isn't enough.

However, toward the end of the century Weirton Steel had fallen on hard times. In the early 1980's it was purchased from National Steel by the employees, thus at that time, making it the worlds largest Employee Stock Ownership Plan (ESOP).

Sadly this was not enough to ensure the longterm viability of the company. It finally went bankrupt in the early 21 century just short of its 100th birthday. By court order, the assets were auctioned with most being acquired by ISG. ISG then formed a new division called ISG Weirton Steel. On April 5, 2005, ISG completed a merger with Mittal Steel. Then again in 2006 , Mittal Steel completed a merger with Arcelor thus resulting in a new company known as Arcelor Mittal.
posted by msconduct at 2:47 AM on November 17, 2009

Will the workers in the new cooperative be allowed to organize under different union should the United Steelworkers (a.k.a. "management") no longer have their best interests in mind?
posted by LakesideOrion at 9:34 AM on November 17, 2009