The Cooperative



effect employee responsible
affect  process cooperative
fired coworker  demand (2)
owe struggle shrink/shrank/shrunk
get by sacrifice at the end of the day
region field (2) make my living
crisis average coordinate
drastic fair well drastic emerge
deny reputation adjustment
wage strategic down river
share downsize machine tool
profit chance (2) circumstance
secure invest





There’s still a lot of work to do — but only four days a week.

Ana De Castro is working shorter hours at the moment; the economic crisis has hit the Fragor Company hard.

De Castro has been fitting electric motors in refrigerators for the past twelve years. She’s responsible for this part of the production process now.

As a member of the cooperative, she also owns part of the company . . .

All of the workers are part-owners.

Ana De Castro, Fragor Electrodomestico Employee: “We make the money. It’s ours. It affects us all.

If this weren’t a cooperative, then the company would have downsized — and people would have been fired.”

Fragor hasn’t fired anyone.

And that in spite the difficulty it is to sell refrigerators in Spain, where the market has shrunk 40% in the past three years.

Production manager, Jose Antonio Gonzalez, and his coworkers, have agreed to drastic cuts with management.

Jose Antonio Gonzalez, Production Manager: “At the end of the day, we don’t owe anyone anything.

We workers are lucky to be part-owners.

We are the people who have to decide what to do. And how much to cut our wages. How much we have to sacrifice.

That’s how we’ll get by.”

The Mondragon Cooperative is made up of 255 companies working in different fields.

Most families in this small town of 20,000 people make their living from the cooperative.

Unemployment is just over 9% in the region; the Spanish national average is double that.

Corporate headquarters look down over the town.

General Secretary, Arantza Luskurain, coordinates the finances.

The parts of the cooperative that are faring well, support those which are struggling.

Arantza Luskurain, Mondragon Cooperative Secretary-General: “We can’t deny that the crisis is affecting our business.

But there are differences between us and other companies that will help us emerge from the crisis successfully.

On the whole, we’re still growing.

We’ve been able to maintain worker levels by making the necessary adjustments.

Over the past 50 years, the Mondragon Cooperative learned how to master different crisis.”

The Mondragon Cooperative owns companies with a global reputation. A few kilometers down river, the Danobat Group makes machine tools for customers like Siemens and General Electric.

Business is good at the moment, despite the poor economic situation in Spain.

Mikel Alvarez, DanobatGroup Marketing Director: “How to prepare for something like this? You try to become more international, so you don’t rely on individual markets.

You look for strategic areas that are less effected by the crisis. And develop technologies that are hard to copy.

And you need some luck.”

Nine-five percent of the machines that Danobat makes are for export, mainly to China and Germany.

And demand is growing.

That means the company needs more workers at the moment.

Engineer, Aitor Korta, worked in a different Mondragon company until recently.

But there wasn’t enough for him to do there, so he moved to Danobat.

Aitor Korta: “I’m part of something bigger. Its circumstances mean that there isn’t enough work for me in my company.

Then instead of ending up in the street, I still have the chance to find another job in another firm belonging to the Cooperative.”

Like all the other members, Aitor Korta had to buy his way into the Cooperative for €15,000.

But that gives him a share of the profits.

And it’s an investment in a more secure future.

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1. Employees at the Fragor Company work full-time, 40 hours a week, Monday through Friday. Yes or no? Why do they work four days a week?

2. Does a family or big investors own (most of) the company?

3. Is it better, in this situation, to work for a cooperative or a corporation? Why is it better to work for a cooperative?

4. The CEO, board of directors or upper managers makes all decisions at the Mondragon Cooperative. Is this correct or wrong?

5. The Mondragon Cooperative consists of only one appliance factory. True or false?

6. What happens if some sectors or companies in the cooperative experience market or financial difficulties? Has Mondragon gone through a lot of business cycles (ups and downs)?

7. Describe their marketing and business strategy.

8. Can workers (easily) transfer from one company to another company in the cooperative?

9. Is business good? How is business for the Mondragon Cooperative?
A. Are there cooperatives in your city or region?

B. Compare a cooperative with a corporation. Is the coop an effective business and economic model?

C. Is the coop system capitalist, socialist, communist, a mixture or something different?

D. Would you prefer working in a coop? What are the advantages and disadvantages of a cooperative system?

E. Compare the level of moral, motivation and enthusiasm about workers in a cooperative and a corporation.

F. Are some people against the coop model or system?

G. Will the cooperative be the way of the future?

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