Cab driver Rebecca Kemble is board president of the U.S. Federation of Worker Cooperatives, and President of CICOPA North America.

Rebecca works at Union Cab, founded in 1979, which now boasts 228 worker members – drivers, mechanics, office staff, and dispatchers. Committed to environmental sustainability, they are replacing gas guzzling Crown Victorias with hybrid vehicles. And they designed their own computerized dispatch system to respond to calls for service with the nearest available vehicle, reducing mileage and improving service and efficiency.

Rebecca drove us around and pointed out other long standing Madison coops like Nature’s Bakery and Community Pharmacy. “Worker cooperatives are sustainable businesses, especially in hard times. They are more flexible with changes in the market and give the highest priority to people working in the business. In the U.S. few people are aware of worker cooperatives, but with the economic crisis we are finding lots of interest.”

Isthmus founder John Kessler.

Inspired by Mondragón’s example, Isthmus Engineering was founded 25 years ago. The cooperative designs and builds state of the art automation systems for a broad range of industries. With 50 employees, the majority worker owners, Isthmus is highly project oriented. Self-directed teams of mechanical and controls engineers, plus highly skilled electricians and machinists, collaborate to design, build, and test equipment that meets their customers’ needs.

“The core principle is one worker one vote, not each dollar one vote,” says founder John Kessler. “We’re not giving up anything by being a worker cooperative. It’s an excellent way to run a business.”

Lisa Thoms

A proud workers coop, Isthmus holds weekly board meetings over a catered lunch, so members can more easily stay abreast of current projects. And finances are completely transparent, even how much each person is paid.

Engineer Lisa Thoms, Vice President of the cooperative, explained. “We vote on hourly pay rates every year, based on each member’s discipline, experience, and contributions. So we all have a say in deciding what our fellow worker/owners are paid. But no member is paid more than twice as much as anyone else.”

“We’re democratic with a small ‘d’,” says engineer Ole Olson, “Everyone can have input in a decision. It doesn’t always go your way, but you know how and why the decision is made and that’s different from a conventional company.” Ole, who sits on the Isthmus coop affairs committee, is active with the U.S. Federation of Worker Cooperatives and in MadWorCs, a budding network of Madison worker cooperatives that promotes support among coops in the area, and encourages creation of new coops.

Ole Olson

Inspired by the experience of Mondragón, where complex support networks among individual coops developed over 50 years, similar networks exist in Western Massachusetts. [Valley Alliance of Worker Cooperatives], the San Francisco Bay Area [Network of Bay Area Worker Cooperatives] and Austin TX [Cooperation Texas]. The Evergreen Cooperatives in Cleveland are being developed as part of a network from the outset.

Even in today’s depressed economy, thousands of high tech, highly paid manufacturing jobs in Chicago remain open, because companies cannot find qualified applicants to fill them. So the CMRC is focusing on education, and they’ve begun in the west side neighborhood called Austin.

Erica Swinney, of Austin Polytechnical Academy

“Austin Polytechnical Academy was designed to connect young people in Austin to careers in advanced manufacturing,” according to Erica Swinney, director of career and community programs at Austin. “It was inspired by the early technical school in Mondragón that was part of a regional economic development strategy that led to the Mondragón Cooperatives.” This small public high school works closely with the Austin community, where most of its students live, and it has attracted some very dedicated teachers.

Pablo Varela

According to machine shop teacher Pablo Varela, here working with student Otis Johnson, “The main goal is that a student gain the skill sets to be successful in both manufacturing and engineering, whatever they choose.”

CMRC companies advise the school about curricula, provide internships, and offer job shadowing opportunities where students learn what it would be like to work in a given job. Just five years after the school was founded, students are planning professional careers that once would have been out of reach. Junior Desiree Wordlaw is interested in biomedical engineering, and senior Torres Hughes plans to study law and engineering.

Marquise Booker

Recent graduate Marquise Booker: “Austin set up job shadowing, and I was interested in metal working so I chose Laystrom. I liked working there, and they offered me a summer job.” After Marquise graduated, Laystrom Manufacturing hired him, and now they are helping to pay for him to study mechanical engineering at Triton College.

Photo: Bill Ruhsam / Flickr

As the Occupy movement keeps developing, it seeks solutions for the economic and political dysfunctions it exposes and opposes. For many, the capitalist economic system itself is the basic problem. They want change to another system, but not to the traditional socialist alternative (e.g. USSR or China). That system, too, seems to require basic change.

The common solution these activists propose is to change both systems’ production arrangements from the ground up. Every enterprise should be democratized. Workers should occupy their enterprise by collectively functioning as its board of directors. That would abolish the capitalist exploitative system (employer versus employee) much as our historical predecessors abolished the parallel exploitative systems of slavery (master versus slave) and feudalism (lord versus serf)…

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A new employee who wishes to join the coop works for a probationary period, and then existing coop worker owners vote to decide if the new person should become a member. If she/he is approved, the new member will begin to buy in to the company. If the new employee faces any difficulty in immigration then they can hire immigration lawyers. On resolving the issue he/she will be approved. All members have an equal say in setting company policy. The 120 member staff is divided into teams with managers in each department.

Each member can choose to spend 4 hours of the work week to participate in meetings, trainings, and other member development activities. At staff meetings and broad policy discussions, the member owners take an active part in setting company policy, a role that is taken very seriously. In one group discussion on innovation and risk, Daniel Fireside cautions, “A lot of folks look to us as a role model.  If we take a risk and we fail totally, not only are the livelihoods of our members at stake, but so is the model of a successful worker coop.”

EE imports fair traded coffee, chocolate, tea, sugar, olive oil, and bananas. When new worker owners are voted in, the company pays their way to Latin America or Africa for a first hand experience with some of the small coffee and cacao farmers who provide raw materials for Equal Exchange products.

Customers include specialty food stores, coops and faith based groups who appreciate the company’s social mission, ”to build long-term trade partnerships that are economically just and environmentally sound, to foster mutually beneficial relationships between farmers and consumers and to demonstrate…the contribution of worker co-operatives and Fair Trade to a more equitable, democratic and sustainable world.”

Founded 25 years ago, CHCA is 100% owned by its workers who are also members of the Service Employees International Union. The cooperative has set new quality standards for home health care in the New York region while improving wages and working conditions for the women who typically provide these services. The coop’s clients are almost always low income people who qualify for Medicaid. And since Medicaid reimbursement rates are very low, so is the pay for home care aides. So CHCA lobbies for higher Medicaid pay scales.

For new home health workers, the coop provides five weeks of classroom and hands on training, and a guaranteed minimum number of hours of work each week. Office staff members sign up new clients, match home care aides to client needs, and provide telephone backup for aides who run into a problem on the job and need advice or assistance.

Gail Porter told us, “I’m a home health aide and three time board member. I’ve been on the finance and policy action committees. When I needed a job in 1995, I came here for training, and I’ve been here almost 17 years. I love the work I do.”

“We started with nothing, and everything we have achieved was because of our own hard work and dedication,” explains Jose Maria Ormaetxea, who was one of the five founding members of the Mondragon coops in 1956. Now these worker owned coops employ 85,000 people and had revenues of about 25 billion dollars in 2010.

We have to interrupt our reports on worker owned companies in the U.S., because we are now visiting the Mondragon coops in the Basque region of northern Spain. Our days are long and intense as we film in numerous factories, universities, research centers, the coop bank and social service agency. We’ve been given complete access to coop managers, regular workers and others in the region to report on what these remarkable cooperatives have achieved and the complex ways they work together to benefit their worker owners and the economy of the entire region.

People here are feeling the effects of the economic crisis, of course, but unemployment in the Basque country is half what it is in the rest of Spain. The cooperatives take a variety of measures to prevent layoffs of members. They can vote to reduce their own hours or pay, or workers may be transferred temporarily to other cooperatives that are not as affected by the downturn. These worker owned coops employ 85,000 people and had revenues of about 25 billion dollars in 2010.

This worker owned bike factory builds some of the finest bicycles in the world. The Orbea sponsored mountain bike team now holds the world and Olympic championships.

We look forward to sharing more stories, both from here and from North America, in the coming weeks, as we wrap up our Mondragon filming and begin editing the documentary, Shift Change. Stay tuned.

Bill McIntyre

“On average employee owned companies are more efficient, innovative, and profitable,” explained Director Bill McIntyre, “but the biggest gains come when companies nurture an ownership culture. For an employee owned company to reach its full potential, workers – and managers – need to unlearn old habits and develop new ones.”

Karen Thomas

That’s where the training comes in. With an ownership culture, employees offer ideas for new products and services as well as ways for the company to work more efficiently. Karen Thomas points out, “In a traditional business, management develops plans and implementation. In an employee owned business every member has responsibility and influence.”

Not all worker owned companies are organized as cooperatives. Most operate under what is called an Employee Stock Ownership Plan or ESOP. There are about 11,000 ESOP companies in the U.S. Many do not have a strong ownership culture, and the day to day experience for employees is not much different than in a conventional firm. But others truly encourage employees to participate in making the company better and the results can be striking.

We filmed at the EBO Group, an ESOP near Akron, Ohio. They design and build specialized industrial machinery, such as drive trains for heavy mining machinery, and clutches for the tunnel boring equipment used to create the Chunnel between England and France.

Dave Heidenreich

EBO also produces an innovative motorized hospital stretcher/chair. That product was suggested by one of the employee owners, who meet individually with their supervisors on a quarterly basis to offer their ideas to make the company more efficient and innovative. EBO was originally privately owned, but when some of the original partners were ready to retire, the owners decided to turn the company over to its employees. “It’s one of the best decisions we ever made,” according to Chairman and Chief Technology Officer Dave Heidenreich.

The success of the EBO Group helps other Ohio companies since EBO contracts with manufacturers in the region to produce parts for the equipment they design and build. And as the worker/owners at the EBO group aren’t interested in closing the Ohio company and moving it overseas, it remains a stable element in the local economy.

Keith Parkham

Last week we filmed in Cleveland, at the Evergreen cooperatives which are a significant part of an ambitious plan to turn this rust belt city around. Once Cleveland was thriving with lots of good jobs for working class people, but now it is impossible to ignore the abandoned factories and run down neighborhoods.

With support from the city and many civic institutions the Evergreen Cooperatives began with a commercial laundry that serves nursing homes with state of the art laundry services in a facility owned and run by its employees. Keith Parkham, facilities manager and cooperative member showed us around. From the entry room where the soiled linens get unloaded from the trucks, sorted and weighed, through their folding and assembling to return to the health care institutions, we filmed a state of the art process that conserves energy and water.

Washing takes place in the “tunnel”, a giant machine that works much faster than a conventional washer, and uses the heat recovered from one wash cycle to raise the water temperature for the next. Instead of spinning, a giant press expels the water, leaving 150 pound disk shaped cakes of laundry that enter the dryers two at a time. After 20 minutes, the drying is complete and the load moves on to be pressed, folded, and shipped. Each worker owner knows how to do all the jobs that are involved, so they can trade off to keep the work interesting and help each other when someone falls behind. “We’re all in it together,” said one worker/owner, “the more efficient we are, the better we serve our customers, and the better off we’ll all be. This is our company.”

Tracey Nichols

Another Evergreen business that is up and running is the Ohio Solar Cooperative with crews that install solar energy collectors and provide home weatherization. And a third coop will soon break ground on a giant greenhouse and food production facility in a once abandoned area to provide fresh healthy food for inner city residents.

These coops have attracted interest from many other cities who like this model of civic institutions, city government, and inner city residents working together to improve the community. Says Tracey Nichols of the city’s Department of Economic Development, “We used to offer all kinds of tax abatements and other incentives to get businesses to move here, but then after a few years another city would offer other encouragements and many would move away. Now we are looking to support businesses that are a good fit with what we already have, to build a healthy economic environment that will endure.”

India Pierce Lee

India Pierce Lee works on community development with The Cleveland Foundation, which has provided key financing for the Evergreen project and helped gather support from longtime Cleveland institutions such as the Cleveland Clinic and Case Western Reserve University. Technical advice and training have come from the Ohio Employee Ownership Center at Kent State University. And an advisor to the project, Ted Howard of the Democracy Collaborative, was drawn to the Evergreen Cooperatives for reasons that should concern us all. He is troubled that the growing inequality in wealth and income is undermining our democracy. “We are proud that our country is a democracy,” he says, “but most people have to check their democracy at the door when they go to work.”

The Rainbow Grocery, in San Francisco, CA, is worker-owned and managed.

Once you start looking, you discover there are cooperative enterprises all around us. Did you know that Handwork in Ithaca New York is a worker cooperative? C4 Tech & Design in New Orleans? Blue Ridge Biofuels in Asheville NC? Equal Exchange coffee importer in West Bridgewater MA? CH2MHILL in Englewood, CO? Select Machine in Kent, OH? Pedalers Express in Sta. Cruz CA? Big Timberworks Eco Design and Builders, Gallatin Valley, MT? Union Cab in Madison, WI?

While there are many types of cooperatives – consumer, housing, marketing, etc., Shift Change will focus on worker owned and managed cooperatives. Take a look at this map of the expanding numbers of worker cooperatives in the U.S.

It was reposted by the Democracy Collaborative. Alperowitz co-founded The Democracy Collaborative which is helping to develop the Evergreen Cooperatives in Cleveland where we will be filming next week.