USW and Mondragon announce new worker co-op plan

Last week, the United Steelworkers, the world’s largest worker-owned cooperative business, and an Ohio-based worker ownership center announced the publication of model template that can be used to set up worker-owned cooperative businesses. The model combines principles of the co-op and union movements to build businesses that are sustainable, democratic, participatory, and accountable.

“To survive the boom and bust, bubble-driven economic cycles fueled by  Wall Street, we must look for new ways to create and sustain good jobs  on Main Street,” said Leo Gerard, USW International President at the announcement of the template’s publication.

USW worked with Mondragon International, a business cooperative owned by more than 80,000 workers, and the Ohio Employees Ownership Center to draft the template model. The collaboration began in 2009 when USW and Mondragon signed a framework agreement to adapt “collective bargaining principles to the Mondragon cooperative model and worker ownership principles.”

The framework agreement goes on to say that “the goals of the collaboration are to develop and grow manufacturing jobs in the United States and Canada to improve the quality of life of workers and to create sustainable jobs in a sustainable economy that supports stronger communities and sustainable environmental practices.”

“Mondragon is  very pleased  to support this historic collaboration,”said Josu Ugarte Mondragon’s president.  It combines “the  world’s largest industrial worker cooperative with one of the world’s most progressive and forward-thinking manufacturing unions to work together so that our combined know-how and complimentary visions can transform manufacturing practices in North America within one hybrid union co-op model based on Mondragon principles and practices that we can believe in because they work.”

The Ohio Employees Ownership Center, that operates out of Kent State University, played a leading role in drafting the open source template, which can be downloaded here. It has helped establish worker owned businesses in the Midwest. In most cases, these co-ops were formed when the owners of a manufacturing plant either went out of business or moved its manufacturing operations to other countries.

Although worker owned co-ops still operate at the margins of the economy, they have a better record than capital oriented businesses when it comes to creating sustainable jobs.

“Statistics emerging from the Great  Recession demonstrate that employee-owners were much less likely to  have been laid off and much less likely to be looking for a new job than  were non-employee-owners,” said Bill McIntyre, OCOC director. “By extension, employee-owned companies have  more stable, loyal and experienced workforces which translate into real  cost-saving, productivity and quality advantages in the marketplace.”

McIntyre added that co-ops are more likely to share the wealth created by its workforce with their workers and the surrounding communities than capital oriented businesses.

The new worker ownership model combines the cooperative principles with trade union principles. Workers are members of the cooperative and have a voice in the decisions that affect their jobs. Workers elect a board of directors, who have the authority to hire and fire managers. The board makes broad policy decisions regarding production, distribution, and financing.

Under the Mondragon model, workers are free to join unions, but the main vehicle for giving workers a voice on the job is the Social Council, which meets with managers and the board to air grievances, give input about production, and bargain over wages and conditions.

The model template, however, allows workers to choose their own collective bargaining representative that would have the authority to bargain collectively and establish a system for giving workers a voice on the job.

Mondragon was established in the mid 1950s in the Basque region of Spain. It originally started as manufacturer of kerosene stores. The co-op provided jobs and an economic stimulus for a region suffering from high unemployment and poverty.

Over the years, Mondragon has expanded all over the world. Its primary focus is manufacturing, but has branched out over the years and now has its own financial center, owns retail stores, and operates its own university.

As it has grown, it has been criticized for centralizing its decision-making and denying some of its workers the right to become members; although more than 80 percent of its workforce are co-op members.

USW said that projects creating worker-owned businesses operating under the co-op/union hybrid model are under way in Cincinnati and Pittsburg. The union anticipates that they will be operating within the next few months.


3 thoughts on “USW and Mondragon announce new worker co-op plan

  1. I have started working with local union members, trying to teach them how unions and worker cooperatives can work together.
    Do you have anyone in the Phoenix area who understands what is happening between the USW and Mondragon.
    There is a lot of scepticism here that unions and cooperatives can co-exist.


    Joe Murphy
    Arizona Cooperative Initiative

  2. A good summary of the content and intent of the agreement, but there is one glaring error in this report. Ohio Ownership has not been organizing co-ops but ESOPs. They have organized a few co-ops, but I think they can be counted on one hand, while I believe that they have over a 100 members in their group as ESOPs, and have assisted many more over the years.

    btw the USW very consitently and explicitily opposed ESOPs as an avenue for “worker-ownership” since they got burned following that path in the 80s. Bankrupt mills sought union support for phoney ownership schemes that in the end failed and caused major unemployment of the workers while the corporate heads walked away with money in their pockets.

    For more on Worker-Co-ops and democratic practices see:

    • Hi Joe: The “Workers’ Independent News” is discussing this very subject now.Look for their podcast……
      Solid ideas to sound out ;=)

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