Beloved for its charming landscapes and fresh lobster, the rural community of Deer Isle, Maine is now gaining attention in the cooperative world. When Verne and Sandra Seile, proprietors of Burnt Cove Market, V&S Variety and Pharmacy, and The Galley, decided to retire last year, they sold their businesses to their employees. With 62 new worker-owners, Island Employee Cooperative, Inc. (IEC) is now the twelfth largest worker cooperative in the nation.

In a small community of just more than 2,500, with a workforce of 1,300, the loss of 62 jobs would have been felt intimately. Where family-owned businesses are significant, communities face additional challenges. Only30 percent of family-owned businesses, like the Seile’s, survive to the next generation. When these businesses are closed or sold to outside investors, communities lose wealth. For example, an Institute for Local Self Reliance study analyzing thelocal multiplier effect in Maine, found that for every $100 spent at a big box retailer, $14 in local spending is generated compared to $45 when the money is spent at a locally-owned business. Additionally, communities sacrifice social benefits fostered by ownership of local business, such as good health and a politically engaged community. Hoping to keep wealth rooted in their home of over 40 years, the Seiles began working with the Maine- based Cooperative Development Institute(CDI) and the Independent Retailers Shared Services Cooperative to convert their businesses to a worker-owned cooperative.

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As the Dean of the Business School at Mondragon University explains , “Cooperatives are not isolated. They share suppliers, they share markets, and they share in the general economic climate.” Sales of home appliances like refrigerators and dishwashers fell by 75% in just three years. Fagor’s competitors in Europe were producing in low wage countries and importing those products to Europe. Over the past few years, the other cooperatives in the Mondragon network had pumped in over $300 million euros in emergency funds to try to keep Fagor Home Appliances afloat, but with the greater Spanish economy stagnating this was not enough. However, unlike what happened in the US when the home appliance industry moved to Mexico and beyond, Fagor workers are not thrown into the street with no options. Nearly all will find positions in other Mondragon cooperatives, some will take early retirement, and all are eligible for extended unemployment benefits.

We discussed the situation extensively with Mondragon leadership, worker/owners of several coops, and faculty at Mondragon University. Despite the extraordinary measures of assistance from other Mondragon coops, the bankruptcy at Fagor is causing real hardships. Worker owners will lose their investment in the company. Other companies in the region that have been suppliers to Fagor are losing their principal customer. And as Fagor members transition to other Mondragon coops, those coops will need to lay off probationary workers, those who had not yet become members but were expecting to do so.

Worker/owners across the Mondragon cooperatives are discussing the Fagor bankruptcy and how to avoid anything like this happening again. We talked with Alaitz, a second generation member of Fagor Automation [which is still going strong] one of whose sisters is a worker owner at Fagor Home Appliances. Alaitz has the last word in SHIFT CHANGE, where she talks with pride about the Mondragon Cooperatives and vows to keep working to make them stronger for her children. She said that she had been thinking about what she says in SHIFT CHANGE and about whether she would say the same thing again after what has happened. “Yes,” she said, “I certainly would.”

Rufina Coop

Hello from Italy! Mark and I saved up our airline miles, and got free tickets to Italy, in part for a vacation, which we have not had in years, and in part to investigate whether it would make sense for us to make a film about the complex coop economy that is here, in some dimensions richer than what we saw in Mondragon, and with valuable lessons for people in North America.

Coops are so widespread as to be taken for granted here. We’d tell people we’re here to learn about the coops and their response would be, “so, what’s the big deal.” They have been well established since the mid 1800′s, and were long identified with political parties – socialist/communist ones, Christian Democratic ones, etc. Now the different threads are working closely together and dismissing past political quarrels. We have done some filming, visited some coops and our heads are full of information to assimilate once we get back home. I’m afraid we have also been eating way too much absolutely wonderful food.

Enjoying a plentiful lunch in Bologna

Speaking of food, the largest supermarket chain in Italy is COOP, a system of 115 consumers’ cooperatives of various sizes (9 large, 14 medium, and 92 small), with 1,444 shops, 56,682 employees, more than 7.429.847 members, and an annual revenue of €12.9 billion. COOP illustrates something distinctive about Italian cooperatives, which build networks of coops in a given industry – retailing, construction, etc. so that each coop can remain relatively small and responsive to its members while together they achieve certain economies of scale and a national brand identity. Seems to work very well.

Another type of coop here is the social coop, an Italian invention dating from the 1980′s. While we see efforts to cut and privatize social assistance programs in the U.S., which are in some measure in response to real problems of bureaucratization and decline in quality of service, in Italy the government is addressing the same sorts of problems by collaborating with social coops to deliver services. That way the services are still socially minded, rather than driven by profit, and the coop members protect their own professional and monetary interests.

With the help of Ian Richard from the U.S. we visited Ecosphera, a social coop that does recycling, maintenance of outdoor spaces and a recently founded ecologically focused small shopping center. Some of their members are people with learning or physical disabilities, or are re-entering society after prison or drug issues. Coops are privileged in the post-WWII Italian constitution and they get special tax advantages and priority on government contracts.

Ran into an old friend on the street in Bologna, visiting Italy on a Food First tour.

We interviewed an economist who specializes in cooperative history at the University of Bologna – oldest in Europe – and visited Aster, a high tech consortium, a large networking organization called Legacoop, and Voli, a coop of radio and film producers with whom we discussed how we might collaborate if we decide to return to make a new film. As of now we certainly hope we will be able to do that.