The Mondragón cooperatives in the Basque region of Spain form the best-known coop system anywhere, and have inspired emulators the world over. Launched in 1956, the Mondragón complex has grown from a single, five-member coop manufacturing kitchen appliances into a massive enterprise with over 30,000 workers and annual sales of $5 billion. For years its achievements have given many of us in the U.S. coop movement confidence that our enterprises can someday develop on a large scale in all fields of endeavor.
That faith has been shaken, however, by Mondragón's recent deviations from democratic cooperative principles in the name of global competitiveness. To prepare for competition within a unified European market, Mondrag›n's managers say they were forced to centralize decisionmaking in a new corporate structure placed above the individual coops, as well as hire more nonmembers, often in joint ventures with capitalist firms.
These changes bolster arguments of coop critics and stimulate fears among supporters that once a cooperative reaches the size and affluence of Mondragón, it loses its democratic character. It is inevitable, the critics charge, that large co-ops become unaccountable to a disorganized, complacent membership, moving away from worker control toward conventional capitalist practices.
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Perhaps the most crucial gathering for reorienting Mondragón was held in 1988 with the theme "Facing Up to the European Community." There co-op managers agreed that their enterprises were on a collision course with multinationals because of the type of products they made and considered how to get out of the way. "[W]hen we established our companies we paid no heed to multinational consortiums, nor the Single European Market," the Congress reported.
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Having committed themselves to competing with the multinationals, the co-ops adopted characteristics of their rivals. Those gathered decided that they needed a quick, centralized system of decision-making to compete in a rapidly changing and complex global market. So by 1990 co-op leaders formed the Mondragón Cooperative Corporation (MCC).
MCC operates in a much more centralized manner than co-op complex had under the bank's leadership. Its management structure makes important decisions on, and coordinates, distribution and marketing for all three types of cooperative enterprise—financial, industrial, and retail/distribution. Its trademark, "MCC" is plastered on Mondragón products going out into the global marketplace so they are easily identifiable.
Most controversial is the new multinational supply and distribution network MCC built. MCC became a traditional capitalist employer operating its own plants in low-wage countries like Egypt, Morocco, Mexico, Argentina, Thailand and China. Its employees in these countries are not co-op members. But even within Spain, MCC developed non-co-op businesses, many as joint ventures with capitalist partners, and has been using an increasing number of nonmember workers within their core co-ops as well.
Now about one-third of Mondragón workers are nonmembers, far exceeding the original Mondragón commitment to never employ more than 10% nonmembers. The director of MCC's temporary services cooperative informed me that a co-op can now apply to MCC for permission to employ up to 40% nonmember workers. The managers justify this change by arguing that the increased volatility of the global market requires a more dispensible sector of the workforce.
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