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.

[read the complete article....]

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.”

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On April 17, 2012, The Straddler met Christopher Mackin in the lobby of the New Yorker Hotel to discuss his views on present-day American capitalism and the potential for economic alternatives. Mackin is founder and president of the Cambridge-based firm Ownership Associates, and has worked as both a professional and an academic in the field of worker ownership since 1978. A member of the core faculty of the Harvard Trade Union Program, he recently completed his second consecutive year as Ray Carey Fellow at Rutgers, where this past spring he taught a new course, called Democratic Capitalism, that he designed for the Rutgers School of Management and Labor Relations.

On his weekly trips between Cambridge and New Brunswick this past spring semester, Mackin made several stops in New York City to present a less structured version of his Democratic Capitalism course to individuals and working groups affiliated with the Occupy Wall Street movement…. Read the full story >

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May 16, 2012:  As our political system sputters, a wave of innovative thinking and bold experimentation is quietly sweeping away outmoded economic models. In New Economic Visions, a special five-part AlterNet series edited by economics editor Lynn Parramore in partnership with political economist Gar Alperovitz of the Democracy Collaborative, creative thinkers come together to explore the exciting ideas and projects that are shaping the philosophical and political vision of the movement that could take our economy back… [read the full article]

Take a look at the preview and please share your comments.

By Susan Arterian

In our last post we introduced Capital Institute’s Field Guide to Investing in a Resilient Economy series, which utilizes the power of narrative to recast the story of our financial system, chronicling the progress of transformative, scalable, real-world investment models that support the creation of a more just and resilient economy.

We also highlighted the first Field Guide study, Grasslands, LLC. This week we explore the subject of Capital Institute’s second Field Guide study, Cleveland’s Evergreen Cooperatives.

A network of employee-owned, for-profit companies, the Evergreen Cooperatives initiative of Cleveland, Ohio, deserves high praise as an ambitious experiment in worker-ownership, anchor-institution-based “green” job creation, and wealth-building in an impoverished urban neighborhood.

But we at Capital Institute see Evergreen as that and much more….

Read the full story here >

Member-Owners of the Mondragon Cooperative Corporation. Photo by Comercio y Justicia.

This month, Rebuild the Dream is taking a look at a few of the amazing ways people in our communities are coming together to create local economies that empower the 99%.

We call these initiatives the American Dream 2.0 because they are providing a totally revamped way to look at our values as a nation as well as our role in creating the world we want to live in.

In part 2 of the American Dream 2.0 series, we take a closer look at worker-owned cooperatives — businesses owned and operated by the workers. While there are several models for ownership and management of worker cooperatives, the essential question is whether they can prove to be a viable solution to joblessness and economic disparity.

It’s not so far-fetched. In fact, it’s already happened….

Read the complete article >

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.

“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.