FAGOR in trouble and the end of the Coop Bank as Coop

Its been a troubling week for anyone that follows and values cooperative solutions. The Cooperative group has lost control of the Cooperative Bank and at the same time the flagship Mondragon  worker cooperative FAGOR, one of the first, has had to file for protection. Under Spanish law,  this allows them four months to refinance the enterprise.   This will be an interesting test of the Mondragon federated structure of cooperatives. These include secondary cooperatives that allow them to accumulate democratically controlled assets as mutual investments and accumulated retained commonwealth.  Alongside this is a university,  with research, training and enterprise incubators from which new enterprise are developed. They also hold in cooperative trust  product patents.  This all is overseen by  general assemblies and a social council. Fagor originates from the first Mondragon worker coop set up in 1956 as Ulgor. It started with six founder members drawn from students that Jose Maria Arizmeniarrieta had taught and at inception had education and training  woven into the culture. Not long after to help finance other sister cooperative ventures a credit union like bank was founded as the Caja Laboral in 1959.  Other formation of  worker and other types cooperatives followed from the core of pioneer cooperatives. The growth was impressive even throuhj times of downturns.  Today the Mondragon complex has over 80.000 members and over 100.000 employees. Ulgor eventually evolved into FAGOR which manufacturers  quality white goods.  But the Mondragon Cooperatives are not isolated from operating in a global market and competition from the far east has put them under pressure.  One consequence is that Mondragon Corporation has in the last years brought up several businesses abroad and have become to an increasing extent cooperatives that employ non members.  This goes against the original ethos. but there may be sometimes   justifiable reasons.  It has been difficult to integrate as members workers that have no cultural background of cooperative membership.  FARGOR itself has resorted to moving some of its manufacture to Poland and the consequence has not always been happy with Polish workers going  on strike.   The latest problems seem a consequence of international competition compounded by the economic crisis.

Comments on the demise of the Cooperative Bank and what might be ways of rebuilding cooperative finance which is both  pragmatic while retaining firm cooperative principles  will follow in a  future item.  What emerges from this mess will  one hopes  be strongly  directed  to democratizing  the economy. This should aim  to more equitable social and economic outcomes  while following sound environmental practice.   This is a challenge needing careful thought and effort but will need  sufficient support to become anyway significant.   Democratic enterprises like any human construct can decline and need renewal and reconstruction from time to time.  In the end the outcomes will depend on the effort people put into them. It is probably possible to improve on what there is but this may entail an element of risk and experimentation,

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