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40+ years a co-operator
• 1972 – joined Cardiff People’s Paper, a radical tenant led local paper. Eventually became second longest surviving in UK
• 1974 – founded Fingerprints in shop premises bought from Council. Finance from CLAP and Cardiff Women’s Action
• 1976 – joined newly formed CDA – elected as Vice Chair
• 1981 – Fingerprints moved to larger premises. • 1982 - Founded Cardiff Peace Shop in the old
shopfront. Sold peace themed Xmas cards through Guardian small ads – over 150,000 each year
40+ years a co-operator
• 1991 - Fingerprints became Wales’ longest surviving co-op
• 1995 – we decided to move on and sold to another co-op formed by NGA colleagues
• 1995 – I went to work for Cardiff Council. • 1998 - Merger with another co-op formed in Council
workshop I ran. Sadly now converted to company • 1999 – Joined Cardiff YMCA Housing Association • 2011 – Founded another worker coop -
consultancy.coop • 2013 – YMCA HA converted to mutual status
MONDRAGON HUMANITY AT WORK
Our visit to Mondragon
• 6 delegates on visit
• 3 days intensive visits
• OTALORA – central management centre
• FAGOR ELECTRODOMESTICOS • EROSKI supermarket • GSR (Co-operative Residencies for elderly people) • MONDRAGON UNIVERSITY (Faculty of Business) • SAIOLAN - Company Incubation Centre • IKERLAN - Technological Research Centre • CAJA LABORAL (credit co-operative)
Our visit to Mondragon
With our host, Mikel Lezamiz (centre)
Footsteps • We were conscious of following in the footsteps of
a previous Wales TUC visit at the end of 1980 :- – George Wright, Wales TUC General Secretary – Les Paul, Wales TUC Vice Chair – Viv Balmont, TASS – Gwyn Jenkins, Aberystwyth Engineering Co-op – Jim Ryan, West Glamorgan Trades Council – Joyce Schutt, Bargoed Blouse Co-op – Barry Scragg, UCATT – Robin Reeves, Financial Times
• That visit led to the creation of the Wales Co-operative Centre in 1982 with the support of the Wales TUC. We want this visit to have a similar impact if we can
Eroski
Eroski
Ikerlan
GSR Care Home
Mondragon University
Mondragon University - Business School
Otalora
Don Jose Maria Arizmendiarrieta
Don Jose Maria Arizmendiarrieta • The instigator of Mondragon, Don Jose Maria
Arizmendiarrieta was born in 1915 in Barinaga about 25 miles away, and joined a catholic seminary at age 13.
• Like many Basque priests, he served on the Republican side during the Civil War. He had lost an eye as a boy so could not join up, but served as a war reporter for a Basque language paper. Arrested by the fascists, he was one of the lucky ones – sentenced to death then released. In 1941, having completed his training he was sent to Mondragon as a curate, to replace the local priest shot by the Franco’s forces.
• He took on the role of religious instructor in the local technical school which was funded by the Unión Cerrajera company
• In 1943 he founded his own independent, community owned technical school funded by public donations.
• In 1955, he selected five students (Luis Usatorre, Jesús Larrañaga, Alfonso Gorroñogoitia, José María Ormaechea and Javier Ortubay.) who were working at the Unión Cerrajera company to take over a local factory making paraffin stoves under licence.
• They raised £60,000 in loans from100 local people to buy the factory
• The name ULGOR was made up from the initial letters of the surnames of its five founders: Luis Usatorre, Jesús Larrañaga, Alfonso Gorroñogoitia, José María Ormaechea and Javier Ortubay.
• ULGOR is now known as Fagor Electrodomesticos – Spain’s largest manufacture of white goods
Don Jose Maria Arizmendiarrieta
History of the Mondragon Co-operative Corporation (MCC)
ULGOR FOUNDERS 1956
ULGOR 1956
Javier Ortubay today
History of the Mondragon Co-operative Corporation (MCC)
History of the Mondragon Co-operative Corporation (MCC)
1941 - DON JOSÉ Mª ARIZMENDIARRIETA arrives in Mondragón 1943 - DON JOSÉ Mª sets up the Polytechnic School 1956 - THE FIRST CO-OP IS CREATED: ULGOR (FAGOR) 1959 - CAJA LABORAL (Bank + Entrepreneurial Division) 1959 - LAGUN ARO (Own Social Welfare System) 1964 - FIRST CO-OPERATIVE GROUP (ULARCO-FAGOR) 1966 - ALECOP (Students working in a worker co-op) 1974 - IKERLAN (Research Centre)
- Design and Production Technologies - Information Technologies - Energy
1987 - 1st CONGRESS of Co-ops: Creation of Mondragon Co-operative Group (GCM)
1991 – 3rd CONGRESS: of Co-ops: Creation of Mondragon Co-operative Corporation (MCC)
• l4th April 1956 - many inhabitants of Mondragón were discreetly celebrating the 25th anniversary of the Second Republic when Father Arizmendiarrieta was celebrating the start of ULGOR
• Nov 20th 1975 - the inhabitant’s celebrated more openly this time on the passing of the Generalissimo Francisco Franco y Bahamonde
History of the Mondragon Co-operative Corporation (MCC)
ULGOR 1961
CAJA LABORAL 1959 ASSEMBLY 1963
CO-OPERATIVES WITHIN MONDRAGON
• INDUSTRIAL 87 • CREDIT 1 • CONSUMER 1 • AGRICULTURAL 4 • EDUCATION 8 • RESEARCH 12 • SERVICES 7 • TOTAL 120 co-operatives
MEMBERSHIP RULES TO ENTER MCC • Relocation of staff among co-operatives • Profit sharing
– Within the sectorial groups (15% - 40%) – Within corporate funds in MONDRAGON
(Investment 10%, Education 2%, Solidarity 2%) • Solidarity in profit distribution
– 10% Education Fund (Law 10%) – 45% Fund or Reserve of Co-op (Law 20%) – 45% Returns to workers à Capitalise à Interest 7.5%
• Initial capital (€14,000 in 2009) • Solidarity in compensation (6:1) • Reporting of data to MCC • Not internal competition between co-ops within MCC
MCC’s BASIC CO-OPERATIVE PRINCIPLES
1. Open Admission 2. Democratic Organization 3. Sovereignty of Labour 4. Instrumental and Subordinate Nature of
Capital 5. Participatory Management 6. Wage Solidarity 7. INTERCO-OPERATION 8. Social Transformation 9. Universality 10. Education
MONDRAGON Structure CONGRESS
Permanent Council
Training and Research Centres
FIN
AN
CIA
L G
RO
UP
RET
AIL
CH
AIN
GR
OU
P
INDUSTRIAL GROUP Automotive
Components
Construction
Industrial Equipment
Domestic Appliances
Engineering and Capital Goods
Machine-Tools
GENERAL COUNCIL
Basic Structure within a Co-operative
MANAGEMENT COUNCIL
DEPARTMENT MANAGER
A
DEPARTMENT MANAGER
B
DEPARTMENT MANAGER
C
DEPARTMENT MANAGER
D
DEPARTMENT MANAGER
E
ACCOUNTING AUDITORS
WATCHDOG COMMITEE
GENERAL ASSEMBLY
GOVERNING COUNCIL
GENERAL MANAGER
SOCIAL COUNCIL ADVISING BOARD
Mondragon business development
• Education and Training – Technical school established 1943 ~ now
Mondragon University
• Inter co-op support – financial and labour – organised via MCC
• 10% of profits to MCC central fund • Financial contribution from workers €3,000 to €14,000
• Plan for 100% workers ownership
Business development • Emphasis on product or service • €140 million on R&D each year
– IKERLAN established 1974
• Business incubation support – SAIOLAN established 1985
• Caja Laboral • Funding from MCC and others for new
ventures • Split ownership at launch
Mondragon business development
• Income equality – no milking of profits – Most co-ops work on 6:1 ratio – Exceptions up to 8:1 – FTSE100 = 262:1
Mondragon business development
• Works with conventional businesses – Gaztempresa established 2,600
local businesses since 1994 – Partnerships with Toyota, General
Motors, Microsoft, worldwide – Owns enterprises worldwide ~
Brandt, Thomson
Mondragon worldwide
Production Plants (75) Offices (9)
Alemania (2) Rep. Checa (4)
Tailandia (1)
Iran
India
Marruecos(2)
Francia (4)
Brasil (5) Brasil
Mexico (4) Mexico
Polonia (1)
China China (6)
U.S.A.
U.K.(3)
India(2)
Italia (2)
Rumania (1)
Rusia
Turquía (1)
Worldwide model • Wholly owned subsidiary • Information transparency • Same management style as in co-
ops • 30% of shares belong to workers • 5% of profits dedicated to local
development • Developing a methodology for
integration into MCC
MCC Results
2003 2004 2005 2006 2007 2009 2010 2011
SALES €9,638M €10,406M €11,859M €13,390 M €16,300 M €14,780 M €17,80 0M €14,832 M
ASSETS €16,309 M €18,593 M €22,977 M €27,550 M €32,840 M €33,499 M €33,090 M €32,450 M
PERSONNEL 68,625 70,884 78,455 83,601 103,731 85,066 83,859 83,569
NET PROFITS €411M €502M €545M €677 M €792 M €61 M €178 M
€125 M
MONDRAGON’s STRATEGY 1. People are the mainstay of the enterprise 2. We are all owners and protagonists 3. One person, one vote 4. The involvement of everyone in Management,
Ownership and Results 5. Self-management 6. Decentralised organisation 7. Real inter-cooperation in funds and people 8. Reinvestment of surplus 9. Social responsibility 10. Innovation: Technical/Technological, Organisational,
Financial, Social 11. Balance between job creation and financial profitability 12. Internationalization
Secrets of success • Capturing their own money – the initial loans • Repatriating their own money – the bank – Caja
Laboral • Substantial investment by every new member • Wage solidarity – senior wages based on lowest paid • R&D led business development - Saiolan • Product prototyping and incubation – Ikerlan • Development finance & support from MCC • The tithe – 10% of all profits to MCC • Solidarity between co-ops – finance and labour swops • Maintaining and developing the co-operative ethos –
MCC management school - Otalora
Can we have one here? We would need:- • Social solidarity – still strong in many places in the UK • A substantial bank that puts co-ops first • Cash - no shortage if we repatriate it to our movement • Worker involvement and wage solidarity • To be product/service led • To do Principal 6 properly • To share profits within the movement • The will and the courage to take the risk • We don’t necessarily need Govt. support – Mondragon didn’t get any at all until after Nov 20th 1975 – but it would help!
MONDRAGON HUMANITY AT WORK
Alex Bird
With special thanks to MIKEL LEZAMIZ
[email protected] www.mondragoncorporation.com
Leading the Dragon
http://www.iwa.org.uk/en/publications/view/216