Interesting news from Spain. The founding cooperative at Mondragon, FAGOR domestic electronics (originally ULGOR) will go bankrupt. Mondragon Corporation, which claims member cooperatives have already provided 300 million euros in financial support to FAGOR, has decided not to support the restructuring plan proposed by FAGORs council. The Basque government, another major source of financial support, will follow Mondragons lead. There have been demonstrations of FAGOR workers in the Basque country demanding support for the continued operation of the company. The causes seem to be the crash in the housing market after 2008 (most appliance sales are for new homes) and competition from low-wage manufacturers. FAGOR, like many Mondragon companies, competes in the global market, with factories and subsidiaries in Poland, Morocco, China, and other countries. Most of FAGORs foreign operations are not worker cooperatives. FAGORs socios -- cooperative members -- will get the usual Mondragon support -- transfer to other cooperatives, support to start new cooperatives, training and education, and 80% pay for two years. FAGORs non-member workers, in Spain and abroad, are not part of Mondragons extensive social insurance program. It is not clear what, if any, support they will get from Mondragon. In related news, another Mondragon cooperative, the massive supermarket chain Eroski, and Spains second largest bank BBVA are in trouble for allegedly defrauding investors in Eroski and Fagor.
Posted on: Sat, 02 Nov 2013 01:12:41 +0000
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