Worker Ownership for the 99%

via PortsideLabor

Press Release:
The United Steelworkers, Mondragon, and the Ohio Employee Ownership Center
Announce a New Union Cooperative Model to Reinsert Worker Equity Back
into the U.S. Economy

March 26, 2012

USW: Rob Witherell,
OEOC: Jim Anderson,
Mondragon International USA: Michael Peck,

Pittsburgh (March 26, 2012) – Leo W. Gerard, International President
of the United Steelworkers (USW), together with representatives from
Mondragon International, S.A., the global worker industrial cooperative
leader, and the Ohio Employee Ownership Center (OEOC), announced today
that a new “union co-op” model template is available for organizations
wanting to combine worker equity with a progressive collective bargaining
process. This template was created as follow up to the original USW-
Mondragon framework agreement launched in October 2009 to collaborate
in establishing Mondragon-like industrial manufacturing cooperatives
that adopt collective bargaining principles to the Mondragon worker
ownership model of “one worker, one vote” within the United States
and Canada.

Titled “Sustainable Jobs, Sustainable Communities: The Union Co-op
Model”, this new public domain template (available at
and offers a road-map primer for competitive and
equitable employment creation based on fifty-five years of Mondragon
principles put into marketplace practice. Aimed at creating an economy
that can work for everyone who works, the union co-op model shows how
“doing well by doing good” reflects core American values of self-reliance,
community solidarity, and ownership as an ineluctable component of the
American dream based on competitive business practices. The underlying
union co-op principle is that this model will result in improved, self-
reinforcing, virtuous cycle worker and customer satisfaction through
higher accountability, productivity, and efficiency because all workers
will have an equal equity stake in the company, will share common goals,
and adhere to common principles and practices that broaden the definition
of value beyond the “bottom line”. Additionally, union co-ops through
this model are structured to benefit from lower overhead costs while
potentially accessing higher impact union benefit plans, such as
healthcare and pensions. Simply put, union co-ops are a better way
of doing business.

“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,” urged Leo Gerard, USW International President. “This
union co-op model, created through our partnership with Mondragon and
with the assistance of the OEOC, provides a viable road map on how we
might begin fielding these sustainable jobs.  Worker-ownership can
provide the opportunity to figure out collective alternatives to layoffs,
bankruptcies, and closings in hard times, rather than having the rug
pulled right out from under struggling communities to the benefit of a
few at the expense of the many”.

Josu Ugarte, President of Mondragon International, added: “Mondragon
is very pleased to support this historic collaboration - combining 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.”

Building upon this union co-op model, as well as the OEOC’s work with
the Cleveland Foundation through the Evergreen Cooperatives platform
(also designed and based on the Mondragon principles), exciting new
projects in Pittsburgh and Cincinnati are well underway, with specific
announcements anticipated in the next several months.  Additional
projects based on the union co-op concept have begun or have been
proposed in multiple locations from coast-to-coast. Pittsburgh intends
to announce its first union-coop project sometime in the late May,
early June 2012 timeframe.

OEOC Director, Bill McIntyre stated: “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. 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. In the aggregate, employee-owned companies are more
successful than comparable non-employee-owned companies, and the
beauty of employee ownership is that success is shared by all
employees and the wealth created has a positive impact on the
communities in which they live.”

The USW-Mondragon union co-op model seeks to build on the foundation
set by the ten Basic Principles that Mondragon co-operatives have put
into practice during the past fifty-five plus years:

Open Admission
The co-op will not discriminate in the admission of new worker-owners,
except that the worker-owner must accept the Basic Principles and be
capable of performing the work required.

Democratic Organization:
The principle of “one worker, one vote” shall prevail throughout
the co-op, including the annual General Assembly and the election
of the Board of Directors.  Every worker-owner owns an equal share
and has an equal vote through “one class” ownership. 

Sovereignty of Labor:
Labor is the main factor for transforming nature, society and human
beings themselves. As a result, Labor is granted full sovereignty
in the organization of the co-operative enterprise, the wealth
created is distributed in terms of the labor provided and there
is a firm commitment to the creation of new jobs.

Instrumental and Subordinate Nature of Capital
People are prioritized over profits.  Providing and creating jobs
are prioritized over increasing the marginal return on investments. 
As President Abraham Lincoln wrote in his first State of the Union
address in 1861: “Labor is prior to and independent of capital.
Capital is only the fruit of labor, and could never have existed
if labor had not first existed. Labor is the superior of capital,
and deserves much the higher consideration.

Participation in Management:
“Ownership” must become more than just the value of a share. 
Workers must also undertake the responsibilities of ownership in
the co-op by their participation in the management of the co-op,
ensuring that the co-op remains accountable to its worker-owners.

Wage Solidarity:
Wage solidarity means there is less disparity among workers and
the communities in which they live, reinforcing the equality and
quality of ownership. In most cases, the highest paid worker in
the Mondragon co-operatives makes no more than 5 to 7 times the
lowest paid worker.

Just as workers benefit from working cooperatively in a business,
so too can co-ops benefit from working cooperatively with other
co-ops. Such an interdependent system of co-ops allows each co-op
to create and share common resources such as financing, research
and development, and training, as well as to support each other
through down turns in the markets or the economy.

Social Transformation:
A key part of the co-op’s mission is to support and invest in
their communities by creating jobs, funding development projects,
supporting education, and providing opportunity.

The co-op supports all efforts to promote workplace democracy
and promotes the co-operative model and culture as a means to
achieve social and economic justice.

Education is valued as “the key to the development and progress
of a people” and is critical to “democratize power”, as quoted
from Mondragon’s founder, Father José María Arizmendiarrieta.  
Education and lifelong learning provide the tools for worker-
owners to adapt and sustain the cooperative.

Creating sustainable jobs and sustainable communities requires
broadening the definition of societal value beyond “the bottom
line” and moving to a more stakeholder-centric economy. Democratic
worker ownership principles combined with social and economic
justice differentiate the union co-op model from traditional
business models, making the union co-op option sustainable and
giving it a competitive edge over the long term as worker-owners
get to benefit more fully from their hard work and own their
own decision-making process and all the fruits of their labors.

The full text of the union co-op model is available at or

About the USW: The USW is North America’s largest industrial
union representing 1.2 million active and retired members in a
diverse range of industries.(

About Mondragon: The Mondragon mission is to produce and sell
goods, and provide services and distribution using democratic
methods in its organizational structure and distributing the
assets generated for the benefit of its members and the community
as a measure of solidarity.  Mondragon began its activities in
1956 in the Basque town of Mondragon by a rural village priest
with a transformative vision who believed in the values of worker
collaboration and working hard to reach for and realize the
common good.  Today, with approximately 850,000 cooperative
members in over 260 cooperative enterprises present in more
than forty countries; Mondragon is committed to the creation
of greater social wealth through customer satisfaction, job
creation, technological and business development, continuous
improvement, the promotion of education, and respect for the
environment. In 2011, Mondragon reached annual sales of more
than twenty-four billion dollars with its own cooperative
university, cooperative bank, and cooperative social security
mutual and is ranked as the top Basque business group, the
seventh largest in Spain, and the world’s largest industrial
workers cooperative.  (

About the OEOC: The Ohio Employee Ownership Center is an outreach
center of Kent State University in Kent, Ohio.  It was founded
in 1987 by John Logue who worked tirelessly to bring the successful
Mondragon business practices and employee ownership structure
and governance to the United States. Since Dr. Logue’s untimely
death in 2009, the OEOC’s staff of eleven has continued to carry
out its mission to promote employee ownership through employee
stock ownership plans (ESOPs) and worker-owned cooperatives
in order to broaden capital ownership, deepen employee
participation, retain jobs locally, and increase living
standards for working families and their communities.

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