“Too often we have seen Wall Street hollow out companies by draining their cash and assets and hollow out communities by shedding jobs and shuttering plants,” said United Steelworkers (USW) President Leo Gerard in 2009. “We need a new business model that invests in workers and invests in communities.”
Gerard was announcing a formal partnership between his 1.2-million-member union and Mondragon, a cluster of cooperatives in the Basque region of Spain. Mondragon employs 83,000 workers in 256 companies. About half of those companies are cooperatives, and about a third of Mondragon’s employees are co-op members with an ownership stake in their workplace. Mondragon companies do everything from manufacturing industrial machine parts to making pressure cookers and home appliances to running a bank and a chain of supermarkets. With billions of euros in annual sales, Mondragon is the largest industrial conglomerate in the Basque region and the fifth-largest in Spain.
The cooperatives use workers’ cash investments as part of the capital needed to finance new projects, and worker-owner co-op members get to vote on strategy, management, and business planning. The highest-paid managers’ salaries are capped at six to eight times what the lowest-paid workers make—as opposed to the United States, where CEOs now make 380 times more than the average worker.
As manufacturing in the United States continues in free fall, the USW is working to bring the Mondragon cooperative model to the Rust Belt. It aims to use employee-run businesses to create new, middle-class jobs to replace union work that has gone overseas.