Mondragón Cooperative Corporation Totally Explained

Everything about Mondrag N Cooperative Corporation totally explained

The Mondragón Cooperative Corporation (Spanish: Mondragón Corporación Cooperativa - MCC) is a group of manufacturing and retail companies based in the Basque Country and extended over the rest of Spain and abroad. It is one of the world's largest worker cooperatives and one important example of workers' self-management.

Foundation

The company was founded in Arrasate, a town in Gipuzkoa known as Mondragón in Spanish. The town had suffered badly in the Spanish Civil War and there was mass unemployment. A young priest, Father José María Arizmendiarrieta, arrived in 1941 and decided to focus on the economic development of the town, settling upon co-operative methods to achieve his goals. Co-operatives and self-help organisations had a long tradition in the Basque Country but had died away after the War.
   In 1943, Arizmendi set up a democratically-managed Polytechnic School. The school played a key role in the emergence and development of the co-operative movement. In 1956, five young graduates of the school set up the first co-operative enterprise, named ULGOR (now Fagor Electrodomésticos) after their surnames, which during its early years focused on the manufacture of petrol-based heaters and cookers. In 1959, they then set up the Caja Laboral Popular ("People's Worker Bank"), a credit union that both allowed the co-operative members access to financial services and subsequently provided start-up funds for new co-operative ventures. New co-operative companies started up in the following years, including Fagor Electrónica, Fagor Ederlan and Danobat.
   It has also extended by inviting other co-operatives to join the group and offering rescue for some failed companies on condition of co-operativization.
   The group companies give preference to fellow co-operatives. Co-operative workers manage their finances through Caja Laboral, hold health insurances and pension funds at Lagun Aro and have discounts at Eroski markets and on Fagor appliances. Eroski stores are furnished by co-operative trucks. Members may have studied at a group ikastola and extended studies at the Mondragoón University while having a labor stage at a co-operative.
   When a cooperative has got in economical trouble, workers have preferred to take pay cuts over layoffs. If the situation deteriorates seriously, redundant workers are provided with positions in other group co-operatives.

Current developments

In the 1980s, the various companies responded to pressures of globalisation by joining together as the Mondragón Cooperative Corporation . The MCC is now the Basque Country's largest corporation, the seventh largest in Spain. It is considered the world's largest worker co-operative. In 2006 the MCC contributed 3.8% towards the total GDP of the Basque Country.
   Education has always been key to MCC and its development, hence the conversion of the old school into the University of Mondragón in the 1990s, a private university to promote further development. Some 4,000 students attend the university campuses in Oñati, Eskoriatza and Mondragón.
   MCC now constitutes over 150 companies, with important manufacturing and engineering interests, as well as retail, financial and educational arms. Its supermarket arm, Eroski, is the largest Spanish-owned retail food chain and the third largest retail group in Spain.
   The Basque government and the tax authorities of the Basque provinces have special measures to help co-operatives. The Deba county around Mondragón has kept a very high employment rate even during Basque industrial crisis.

Organization

The sovereign body is the 650-member Co-operative Congress, its delegates elected from across the individual co-operatives. The annual general assembly elects a governing council which has day-to-day management responsibility and appoints senior staff. For each individual business, there's also a workplace council, the elected President of which assists the manager with the running of the business on behalf of the workers.

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