Mondragon's Fagor Cooperative Declares Bankruptcy

Fagor Electrodomesticos, the flagship of the Mondragon cooperatives, announced on November 13 that it would file for bankruptcy protection. Fagor is the fifth largest electrical appliance company in Europe and the original cooperative in Mondragon, the best known federation of worker cooperatives in the world. Fagor has suffered a one-third decrease in sales over the past five years, largely due to Spain's economic crisis and competition from Asia.

Fagor had requested 170 million euros from its umbrella group, the Mondragon Cooperative Corporation (MCC). The MCC's general council rejected the request, noting that it has already provided 300 million euros. In a statement, the council said that Fagor "no longer responds to market needs, and the financial resources it requests would not ensure its business future."

The MCC pledged to support the 5,600 Fagor employees by finding jobs for them in other Mondragon cooperatives, by allowing early retirement, or by providing job training. The MCC also reaffirmed its commitments to "the particular values of cooperativism (people come first, the sovereignty of labour over capital, participatory management and inter-cooperative solidarity) [which] are now more than ever the keys to the management of the companies of the future."