United Steelworkers, Mondragon Cooperatives Launch Joint Agreement

The United Steelworkers and the Mondragon Corporation (the holding company for the Mondragon cooperatives) have agreed to a joint collaborative agreement for the development manufacturing companies in the U.S. that will be organized as worker cooperatives with steelworker representation. No specific projects are yet underway, but Mondragon has an impressive record of business development. Starting off as a handful of small worker coops in the Basque region of Spain, Mondragon now employs close to 100,000 people worldwide in over 260 cooperative enterprises in more than forty countries. It had 2008 annual sales of more than sixteen billion Euros and has its own cooperative university, cooperative bank, and cooperative social security system. Its entrepreneurship center helps new cooperatives get started. It has strict limits on the ratio of top management pay to the pay of other employees, but has been ranked as one of the most desired places to work among graduate business students. It is the largest Basque business group and the seventh largest in Spain.

A number of smaller efforts to emulate the Mondragon model have been attempted in the U.S., the largest of which is probably in the San Francisco Bay Area, where there are several very successful worked-owned cooperatives in a linked network, mostly in the food business. The Steelworkers have had considerable experience with ESOPs, many of which they helped organize to prevent plant closings in the 1980s. Experience on this was mixed. While a few have had considerable success, others closed anyway, while still others ended up being sold after some years. In the press release on the agreement, Steelworkers President Leo Gerard that the union "has lots of experience with ESOPs, but have found that it doesn't take long for the Wall Street types to push workers aside and take back control. We see Mondragon's cooperative model with 'one worker, one vote' ownership as a means to re-empower workers and make business accountable to Main Street instead of Wall Street."