Mondragon: Worker Cooperatives in a Difficult Economy

Writing in the Guardian, Giles Tremlett described the impact of the economic downtown on the world's largest worker cooperative, the Mondragon Cooperative Corporation (MCC). Headquartered in the Basque Country on the northern coast of Spain, Mondragon is Spain's seventh largest industrial group, with $20 billion in revenue and 84,000 employees worldwide. The MCC is the parent corporation for 111 businesses in sectors from manufacturing to consulting to retail.

While Spain's economy shrinks at a 1.9% annual rate and has unemployment of 26%, Mondragon has, so far, closed just one of its units, a 30-person cooperative that made equipment for the lumber industry. Those workers, and any others that their coops can no longer productively use, are redeployed to other coops within the MCC. Redeployment is one reason the coops claim to be more flexible than traditional business. Another, explains Emilio Cebrián, the social director at Mondragon's Eroski supermarket group, is that "When times are bad, we cut wage costs by deciding it among ourselves." Overall, average wages at Mondragon have dropped by 5%.