New Internationalist

Working together

September 2010

Spain’s Mondragón Co-op has forged a collaborative deal with one of North America’s most powerful industrial unions, the United Steelworkers. The two have long sought to empower working people. But up to now they haven’t had a lot to do with each other. Could this signal a new era for the labour and co-op movements? Erbin Crowell investigates.

Much has been made of the shared origins of the co-operative and labour movements. Both emerged in response to the social upheaval of the industrial revolution and both have sought to empower working people – albeit in different ways. Trade unions have provided workers with a collective voice to counter the owners of capital, while co-ops have presented an alternative, democratic model of ownership and control. At different times and in various places, the two have shared the vision of a ‘co-operative commonwealth’. They’ve both been closely aligned in their goal of creating an economy more accountable to people and communities.

This common vision has not always translated into strong relationships between co-ops and unions. But shared values tend to resurface in tough economic times. Take the recent collaborative agreement between Spain’s Mondragón Co-operative Corporation (MCC) and the United Steelworkers (USW) in the US and Canada.

Photo: Mondragon
A shopper at one of Mondragón Co-operative's Eroski supermarkets in Spain picks peppers Photo: Mondragon

This is an ‘historic first’, Mondragón President Josu Ugarte said last October when the alliance was first announced. It combines ‘the world’s largest industrial worker co-operative with one of the world’s most progressive and forward-thinking unions’. A central goal is to create ‘union co-ops’ – an innovative hybrid of Mondragón’s model of co-operative ownership and control combined with union representation.

The announcement is big news because the Steelworkers are not just any union – and Mondragón is not just any co-op.

The USW is North America’s largest industrial trade union with 850,000 members in Canada and the US. While the organization has faced severe challenges with massive losses of industrial jobs in North America, it has remained forward-looking. Under the leadership of Leo Gerard, for example, the USW formed a ‘blue-green’ alliance with environmentalists to ensure that green jobs are also good jobs. Gerard sees the potential for a revitalized manufacturing sector in North America based on wind turbines, solar cells and other components of a green economy. But he also recognizes that workers and their communities need more than just new things to produce. ‘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,’ says Gerard. ‘We need a new business model that invests in workers and in communities.’

Mondragón offers such an example, particularly for industrial communities. This network of co-operatives, founded in 1956 and inspired by a Catholic priest, began with a technical training school for working class students in the Basque region of northern Spain. Faced with few job opportunities, students formed a small co-op that manufactured kerosene stoves, and then created new enterprises to supply one another with products and services. When cash to expand was needed, they established a co-operative bank to pool the savings of individual and business members. A ‘contract of association’ bound member co-ops in a rapidly expanding system of enterprises that included manufacturing, food processing, supermarkets, insurance and a university. Fifty years later the MCC has nearly 100,000 members, 250 enterprises in 40 countries and annual sales of more than $24 billion.

That success has not been lost on the Steelworkers. Rob Witherell, who co-ordinates the union’s partnership with Mondragón, stresses the concrete results. ‘Let’s always remember that these co-operatives were started and supported not out of some utopian ideal, but rather as a very pragmatic means of helping people put a roof over their heads, clothes on their backs and food on their tables.’ This is a compelling message in a global recession that has produced massive unemployment, scores of bankruptcies, lost wealth and mortgage meltdowns.

Looking for alternatives

Mondragón is not perfect. It has been criticized for buying and operating conventional businesses, particularly outside the Basque region. And a growing number of employees are not members – a topic of vigorous debate. Still, the MCC has been surprisingly open about the challenges of competing in a global economy, while protecting the integrity of a co-operative system built over more than five decades. Recently, there has been a push to bring more employees into the co-op fold, especially in the Eroski supermarket chain, where most of its non-member employees are concentrated.

Mondragón’s agreement with the Steelworkers is a commitment to extending its co-operative model outside of Spain. In the current recession people are looking for alternatives to the economic structures that brought us into this crisis. So the idea of unions and co-ops forging a common vision for the future is attractive.

This dialogue has been developing for some time. In 2006, St Mary’s University in Nova Scotia, sponsored an international symposium where many presenters explored the relationship between co-ops and organized labour. (Papers from this conference are posted at www.mmccu.coop/coopworkers). And in the US, the 2007 Eastern Conference on Workplace Democracy brought together co-operators and union activists.

Dianna Green Lent
Steelworkers from Canada and the US support striking mine workers outside Brazilian mining company Vale Inco's headquarters on Wall Street. Dianna Green Lent

What was missing was a high profile example of what such collaboration could look like. Since the announcement both Mondragón and the Steelworkers have been receiving inquiries, invitations and pleas for help from all over world. Despite being in the preliminary stages the USW’s Witherell argues that the alliance has already been a success, ‘shining a spotlight on a really interesting idea at a time when it is desperately needed’.

There is no question that this agreement has sparked excitement and inspiration. At the same time, the Steelworkers and Mondragón can’t do it all. We now need to take this spotlight and shine it back on our own communities where hope is in short supply – but where many new initiatives are taking place.

In my area of New England, for example, co-ops are advancing the idea of a ‘co-operative economy’. The Valley Alliance of Worker Co-ops (VAWC), a network of 10 worker co-operatives employing more than 75 people in everything from body care products to installing solar panels, has begun telling its story and providing support to people who want to start new co-ops. And the 17 co-ops in the Neighboring Food Co-op Association (NFCA) have been working together to increase their membership and impact on local agriculture. The NFCA already has more than 64,000 members and yearly sales of $161 million. Together, these co-ops employ over 1,240 people and buy more than $33 million in local products. Aiming for a ‘thriving regional economy’, members of the Association are working to increase access to healthy, regionally sourced food, and to strengthen collaboration among co-ops of all sectors. Many member co-ops are also active in the growing ‘transition town’ movement (see ‘Transition towns, the art of resilience’, NI 430, March 2010).

A common agenda

At the global level the International Labour Organization and the International Co-operative Alliance have agreed to partner on a ‘common co-operative agenda’, while the UN recently declared 2012 the ‘International Year of the Co-operative’.

‘these co-operatives were started and supported not out of some utopian ideal, but as a pragmatic means of helping people put a roof over their heads, clothes on their backs and food on their tables’

This is an historic opportunity for the labour and co-op movements. They have a unique opportunity to remind people of the tools they have to create change, as well as an obligation to play a leading role in offering new strategies for economic justice. For unions, this agreement is an opportunity to explore the potential of co-operative ownership instead of the usual adversarial relationship with capital. For the co-op movement, it is an opening for greater solidarity with working people everywhere – not just in their own co-ops. It is also a reminder of one of Mondragón’s core principles for success: investment in community development, job creation and expanded co-operative ownership.

Those of us in the co-op movement have an opportunity to reassess our assumptions about the role of employees and unions. The potential of ‘multi-stakeholder’ co-ops (demonstrated by Mondragón’s successful mix of workers as members, along with other stakeholders like consumers, farmers and students) seems a promising model for application elsewhere. For example, Eroski, the second largest food retailer in Spain, is a co-operative with both workers and consumers as members. And critical to Mondragón’s success is a ‘systems approach’ – an interconnected web of enterprises, which has overcome the isolation that’s plagued co-ops in other parts of the world.

This agreement is an opportunity for the United Steelworkers, Mondragón and for the wider co-operative and labour movements. But more than that, it’s a chance for people everywhere who have been devastated by the boom-and-bust cycle of the global economy to think about alternatives. With a little luck, and by finding new ways of working together, we can lay the groundwork for a more just, sustainable and participatory future economy.

Erbin Crowell is executive director of the Neighboring Food Co-op Association and a board member of the US National Cooperative Business Association. Email: [email protected]

This column was published in the September 2010 issue of New Internationalist. To read more, buy this issue or subscribe.

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  1. #1 Adam Trott 11 Oct 10

    The growing relationships between unions and co-op complexes has enormous promise for members of either movement and the communities they inhabit. It is also inspiring for the current co-ops and collectives that are unionized in the United States, many for decades – Collective Copies, Inkworks, Red Sun Press, etc – as we see this sense of solidarity brought to a larger scale. Unionized co-ops have the added advantages of member protection and resources to build relationships and job retention. In my experience, labor unions' experience in contract negotiations and democratic process offer the co-operative movement an incredible resource. And Mondragon's Eroski, with workers and consumers co-operating to determine the working conditions and produce in their stores, offers a business model for people to take control of the economic destiny of their communities, their farmers, their employment and their health.
    For me, the new relationship between Mondragon and US Steel Workers catapults the imagination of a co-operative economy back into our own communities. What can we do? How can people participate in and direct their own economy? Should we continue to have our economic systems we depend upon lack democratic process? Co-operative ownership offers democratic, sustainable tools for people to take charge of their economic destiny. And I would like to add interco-operation - collaboration among co-ops and co-op sectors - to the author's 'multi-stake holder' co-ops as models where profound change to societies and economies occurs.
    Though smaller in scale at the moment, many co-operative organizations, like Valley Alliance of Worker Co-operatives (VAWC) and the Neighboring Food Co-ops Assocation, are dedicating resources to common goals and a 'co-operative commonwealth' in the US. VAWC isn't alone, as there are other worker co-operative groups organizing include the United States Federation of Worker Co-operatives, the Network of Bay Area Worker Co-operatives and Madison Worker Co-operatives .
    It is important to remember that these larger co-op complexes began with a vision and those dedicated to it. With the same practice and collaboration we can co-operatively build an economy we are proud of and sustained by.
    For more about VAWC and its mission, go to www.valleyworker.org.
    Adam Trott
    VAWC Staff Co-ordinator
    Worker-Member, Collective Copies
    United Electrical Workers, Local 274

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This article was originally published in issue 435

New Internationalist Magazine issue 435
Issue 435

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