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

alex@consultancy.coop

With special thanks to MIKEL LEZAMIZ

mlezamz@mcc.es www.mondragoncorporation.com

Leading the Dragon

http://www.iwa.org.uk/en/publications/view/216