I don't know of a film either, but I prepared this 1996 'update' on
Mondragon for the new edition of my book, 'After the Crash', to add to the
overall picture. And just last week, Greg MacLeod (from Cape Breton, who
arranges regular tours to Mondragon) sent me the details of his forthcoming
book on Mondragon. If anyone knows of a film, he will.
>From 'After the Crash' (3rd edition, 1996)
Leaving Britain, we travel south to Mondragon, in the Basque country of
northern Spain. When we left in 1988, 20,000 people were sharing in a
closely woven network of 100 different mutually owned co-operatives (pp 126
- 131), making and distributing everything from automotive parts to sewage
treatment equipment, semiconductors and bicycles. The late 1980s saw
continued success and expansion, but in 1992 - 1993 Mondragon had to
weather the worst recession since World War 2, when economic demand tumbled
throughout Europe. The recession gave Mondragon its worst crisis for a
decade. To keep in good shape they were forced to bring in a 2-year wage
freeze and lay off 500 workers. By the end of 1994 Mondragon had bounced
back, however, rehired the 500, and hired an additional 400 workers who
became members of the Mondragon cooperatives by investing $12,000 each,
bringing the number of owner-workers to 26,621. Mondragon is currently
Europe's No 1 exporter of machine tools, Europe's leader in the field of
domestic appliance components, and the third largest supplier of car
components. They own 300 co-op food stores and 30 hypermarkets, and are
engaged in establishing new hypermarkets across France and Spain at the
rate of two a year. The Entrepreneurial Division of the Caja Laboral (the
credit union) provides venture capital for the new starts, with almost 100%
success. By contrast, venture capitalists in the USA expect to lose 80% of
their new starts within 5 years. At Mondragon, the riskier the loan, the
lower the interest rate, to maximize the chances of success.
Mondragon has proved beyond question that co-operative ownership,
co-operative banking and co-operative networking between businesses bring a
level of success, stability and employment that can be matched by very few
privately owned companies. If a community can pull it off, this is without
doubt the formula to follow.
This success, however, (especially the move into hypermarkets) raises
profound environmental questions. Mondragon has always existed squarely
within the traditions of the industrial way of life, successfully riding
the waves of growing consumer demand. Along with other leading companies in
Europe, Mondragon has accepted the need for change and begun to address the
green agenda. In 1993 a major ECOPlan was finalized, and 1994 saw
environmental action in the areas of CFCs, water, energy and paper
efficiency, and campaigns to collect materials such as used batteries,
motor oil and glass. An ecological fair 'Ekokonsum' was held, aimed at
making consumers more ecologically aware in their own lives, and an
environmental guide was published. ECOPlan will be extending its activities
to include Mondragon's suppliers of products and services, too. As
Mondragon continues to apply its pioneering social consciousness to the
environmental realm, we can look forward to an entire new chapter in the
history of this remarkable experiment.
END
FROM MONDRAGON - TO AMERICA:
EXPERIMENTS IN COMMUNITY ECONOMIC DEVELOPMENT
DATA AND REFLECTIONS FROM FORTHCOMING BOOK by Greg MacLeod
tel 902-562-242 Fax 567-0153 [EMAIL PROTECTED]
info contact UCCB Press
Box 5300 Tel 902-539-5300
Sydney, N.S. Fax 902-562-0119
Canada B1P 6L2
DRAFT ONLY DRAFT ONLY
Contents
1. Inside Mondragon
A: Background
B: Mondragon: The Parts
C: Structures and Governance
1. Single Enterprise
2. The Zone Group
3 The General Congress
2. The Strength of Mondragon
A: Mission Statement
B: Ten Principles
C: Enterprise Creation And Development
D: Providing For Continuance
3. New Vision
A: Sources
1. The Church Tradition
2. The Basque Social Tradition
3. Socialism and Personalism
B: Don JosČ Maria's Synthesis.
4. A Critique of Private, Social and State Enterprise
A: Capitalist Corporation
B: Traditional Cooperatives
C: Soviet Model
D: Towards a New Model
5. A New Model
A: The Cooperative Corporation
B: A New Role for Management
C: Role of Workers
D: Evaluation and Replicability
6. The Valencia Experiment
A: Beginnings and Development
B: The Parts
C: Evolution to a New Phase
D: The Future
E: Basic Principles
7. North American Glimmerings
A. Community Business Corporations
B. Alternative Financial Initiatives
C. Mexico: A Sustainable Development Project
8. Practical Reflections for Community Economic Solutions
A: Community Economic Development
B: Getting Started
C: Person-Centered Economics
Appendix I: Biographical Sketch of Don JosČ Maria
Appendix II: List of Mondragon Companies
Appendix III: Useful Addresses
Abstract
CHAPTER ONE describes the facts about Mondragon, what the visitor will see
on a visit there or what one will read in the annual business report of the
Caja Laboral Popular (Credit Union or Cooperative Bank) which for many years
served as the glue to hold the complex together. The description includes
how the components function and relate to one another. Mondragon exists as a
concrete, functioning and profitable enterprise.
CHAPTER TWO explains how the strength and success of Mondragon is rooted in
the founders' vision of society and their guiding value system. Aggressive
expansion in response to community needs is seen as a virtue. The complex
techniques of enterprise creation are described in detail. Also analyzed is
their freedom from bankruptcy.
CHAPTER THREE responds to interest in the original intentions and innovative
ideas that gave rise to all this activity. The researcher will find that
none of the components is original but that each was proposed by some
earlier thinker.1 The genius of Don JosČ Maria was to construct out of the’
se
elements an original synthesis which proved to be applicable to the world in
which he lived. Syntheses are extremely important for the advancement of
knowledge. The synthesis of ideas behind Mondragon is important because it
triggered a collaboration among a variety of institutions that are normally
divided and in competition.
CHAPTER FOUR contains a critique of different models for a business
enterprise: capitalist, communist or communitarian. With the fall of the
communist systems in Eastern Europe these questions are important. An
extremely simplistic attitude might assume that the capitalist model has
'won'. However, problems like chronic unemployment, pollution, and events
such as the Los Angeles riots, indicate that traditional capitalist systems
have not provided a formula for human wellbeing.
CHAPTER FIVE presents the new model as envisaged by Don JosČ Maria, the
communitarian model which has yet to be widely tried in the Western world.
An examination of its success in the Mondragon complex reveals that it is
neither simply cooperative nor simply capitalist. The chapter shows how
Mondragon takes elements from several models and results in a community-
based business system which is very flexible and adaptable to changing
social needs and circumstances.
CHAPTER SIX describes the Valencia experiment as an example of the
transferability of Don JosČ Maria's model. Founded by a group describing
itself as followers of the Mondragon approach, the Valencian experiment
consists of a community bank, a string of cooperative retail stores, an
insurance company, employee-owned factories and a professional school.
CHAPTER SEVEN examines how the original motivation which inspired the
Mondragon experiment is shared by many groups in North America, including
one in Mexico, who are struggling to fight unemployment and economic decline
in their own communities. Also discussed are examples of other community
businesses which contain, in various degrees, some of the values associated
with the Mondragon experiment.
CHAPTER EIGHT explains how technology is a way of thinking and a way of
organizing. Based on his involvement in community economic development in
Atlantic Canada during two decades, as well as his visits to the Spanish
projects, the author proposes that basic guiding values and good technology
are essential in making a new economy for a sustainable future.
Appendix II is a useful list of the 96 member-enterprises of the Mondragon
Cooperative Corporation, including product lines and addresses.
MONDRAGON DATA: -
The Mondragon Cooperative Corporation now functions as four groups or
divisions:
1. Corporate, responsible for planning and development. This also includes
the university. 15 enterprises
2. Finance including the Caja Laboral or Credit Union, along with insurance
and social security. 6 enterprises
3. Industrial which includes the factories and agricultural units - 67
enterprises (a sub-set of this group is subsidiary enterprises-13 total of
80 enterprises
4. Distribution which includes the Eroski retail chain.
8 enterprises
These four divisions are united under the general coordinating role of THE
CONGRESS which is comprised of delegates from all the divisions.
MONDRAGON COOPERATIVE CORPORATION -Jan. 1997
CONSOLIDATED FIGURES (Canadian Dollars)
1994 1995 1996
TOTAL ASSETS $10.8 bill $12.3 bill $13.8 bill
I. PRODUCTION AND DISTRIBUTION
SALES - GOODS $4.9 bill $ 5.5 bill $ 6.0 bill
EXPORTS $ .8 bill $ 1.0 bill $1.1 bill
WORKER-MEMBERS 26 thou 28 thou 29 thou
II. CAJA LABORAL ( CREDIT UNION)
ASSETS $ 4.6 bill $ 5.8 bill $ 6.06 bill
INVESTMENT $ 2.9 bill $ 3.2 bill $ 3.5 bill
Equity $ .6 bill $ .7 bill $ .8 bill
WORKER-ACCTS$ 1.5 bill $ 1.7 bill $1.9 bill
The Caja ( co-operative bank) is still the key resource and instrument of
growth.
Internal Investments : 1995-96
Industrial group $147 mill
Distribut. $ 240 mill
Finance 9 mill
Corporate 5 mill
total $ 401 million
Special Purpose Expenditures by the Caja:
Education and Co-operative Development - 6.7 mill
Research .3 mill
Support for Youth Entrepreneurship .3 mill
Promotion of Basque language .4 mill
Institutional grants .4 mill
Cultural Activities and other .7 mill
$8.8 mill
CAJA LABORAL POPULAR ANNUAL REPORT 1996
JOBS in Mondragon Cooperative Corporation:
1995 1996
Industrial Group 15,000 15,839 52,%
Distribution group 10,974 12,377 40.7%
Finance 1,777 1,830 6.0%
Corporate activities 387 400 1.3%
Total 28,228 30,446 100.0%
2, 218 added in 1996 Most of these were from retail system . Still from
non-retail we have a net gain of 905.
STRATEGIC PLAN 1996 TO 2000
(cf. Lankide, April 1997)
CREATE 8,800 NEW JOBS BY THE YEAR 2000
( From present 28,250 to 37,050)
1996 2000
Industrial 16,040 20,000
Distribution 10,030 - 14,530
Finance 2,180 2,520
total 28,250 37,050
In this book we have looked at Mondragon, Valencia and a number of smaller
examples of community initiative to set up businesses dedicated to the
common good. The ones that survive seem to be the ones that maintain a set
of ideals and values but who admit that they cannot be all achieved. Rather
, they hold the ideals as a kind of horizon which we aim at. Progress is
judged not simply in attaining the ideal, but rather coming closer and
closer to the ideal. The danger is that the incomplete, compromise
situation will be accepted as the ideal and that no effort will be made to
change and improve what we have.
While almost every other corporation in the world is cutting back an’
d
reducing the number of employees, MCC has as part of its five year plan the
goal of creating at least 8,800 new jobs in Spain. This is accepted as a
duty to the general community which is suffering from unacceptably high
levels of employment. While for the Guiness Corporation, the priority is to
increase profits, the priority for Mondragon is to increase jobs and
preserve the community. This manifests the over-riding fidelity of
Mondragon to its most basic distinguishing characteristic: THE PRIORITY OF
PEOPLE OVER CAPITAL.
Merger.. Times of London, p. 31, May 13, 1997
Greg MacLeod
University College of Cape Breton
P.O. Box 5300
Sydney, N.S.- B1P 6L2
CANADA
FAX 902-567-0153
Univ. tel 902-539-5300
Res. 902-562-2420
E-MAIL [EMAIL PROTECTED]
Guy Dauncey, 2069 Kings Rd, Victoria, B.C. V8R 2P6, Canada
Tel/Fax (250) 592-4473
Author of forthcoming "The Millennium Chronicles : 2000 - 2015"
Author of 'After the Crash : The Emergence of the Rainbow Economy'
(Greenprint, UK, 3rd Updated Edition 1996)
Victoria Car Share Co-operative
Editor, EcoNews http://www.islandnet.com/~gdauncey/econews/
