Mondragon Corporation facts for kids
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| Worker cooperative federation | |
| Founded | 14 April 1956 |
| Founder | José María Arizmendiarrieta |
| Headquarters | , |
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Area served
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International |
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Key people
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Iñigo Ucín (president of the General Council) |
| Revenue | €12.110 billion (2015) |
| Total assets | €24.725 billion (2014) |
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Number of employees
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81,507 (2019) |
| Divisions | Finance, Industry, Retail, Knowledge |
The Mondragon Corporation is a large group of businesses in the Basque Country, Spain. It is special because it is a federation of worker cooperatives. This means that the workers own and run the businesses together.
The company started in the town of Mondragón in 1956. It was founded by Father José María Arizmendiarrieta and some of his students. Their first product was paraffin heaters, which are like old-fashioned space heaters.
Mondragon is one of the biggest companies in Spain. It is the top business group in the Basque Country. By 2019, over 81,507 people worked for Mondragon. These workers are part of 257 companies and organizations. They work in four main areas: finance, industry, retail, and knowledge. Mondragon cooperatives follow the rules for cooperatives set by the International Co-operative Alliance.
Contents
How Mondragon Started
In 1941, a young Catholic priest named Arizmendiarrieta moved to Mondragón. The town was still recovering from a difficult time after the Spanish Civil War.
In 1943, Arizmendiarrieta opened a technical college. This school helped train future managers, engineers, and skilled workers. Many of these students later worked for the cooperatives.
Arizmendiarrieta taught young people about working together and helping each other. He believed it was important to learn technical skills before starting a cooperative.
In 1955, he chose five young people to start the first cooperative company. It was called Talleres Ulgor. Today, this company is known as "Fagor Electrodomésticos," which makes home appliances.
In the first 15 years, many new cooperatives were created. This happened as the Spanish economy grew. Arizmendiarrieta also helped start Caja Laboral (a bank, in 1959) and Lagun Aro (a social welfare group, in 1966). These groups were very important for the cooperatives. In 1969, Eroski was founded by joining ten smaller local food cooperatives.
From 1970 to 1990, more cooperatives were formed. Caja Laboral's business section helped start many of them. The Ikerlan Research Centre was also founded in 1974.
In 1984, the "Mondragon Co-operative Group" was created. This group was the start of the Mondragon Corporation we know today. By 1990, the group had 23,130 workers.
Growing Around the World
Mondragon started to grow internationally. They built factories in many other countries. The first international factory was Copreci in Mexico in 1990. By 2013, they had 122 factories outside of Spain.
This helped Mondragon compete better and sell more products. It also helped them be closer to their customers, especially in the car and home appliance industries. This growth also helped create jobs in the Basque Country.
In 2008, two cooperatives, Ampo (metal casting) and Irizar (coaches), decided to leave the Mondragon Corporation.
In 2009, the United Steelworkers union in the United States agreed to work with Mondragon. Their goal was to create worker cooperatives in the United States.
By 2012, Mondragon's industrial businesses made a record €4 billion in sales outside of Spain. International sales made up 69% of all sales that year. They opened 11 new factories abroad, employing about 14,000 people.
In 2013, Fagor Electrodomésticos, a home appliance company, faced big financial problems. It had to declare bankruptcy. This put 5,600 jobs at risk. In 2014, another company bought Fagor. They promised to create new jobs and keep the Fagor brand names.
In 2022, two more successful cooperatives, ULMA Group (scaffolding) and Orona (elevators), voted to leave the corporation. These companies used to contribute to a fund that helped other cooperatives. They will still work with Mondragon University and other cooperatives.
How Mondragon Works
All Mondragon cooperatives share a special way of doing business. It's based on teamwork, fairness, and helping each other. This way of working comes from their shared mission and values.
Over the years, the cooperatives have created rules together. These rules guide how the different parts of the corporation work. They cover how the businesses are organized, how they make decisions, and how they share money.
Mondragon's business culture is built on 10 main Co-operative Principles. These include:
- Open Admission: Anyone can join.
- Democratic Organization: Workers vote on decisions.
- Sovereignty of Labor: Work is more important than money.
- Instrumental and Subordinate Nature of Capital: Money is a tool, not the main goal.
- Participatory Management: Workers help manage the business.
- Payment Solidarity: Everyone shares in the success.
- Inter-cooperation: Cooperatives work together.
- Social Transformation: They want to make society better.
- Universality: Their ideas apply everywhere.
- Education: Learning is important.
They also have four main values:
- Co-operation: Acting as owners and leaders.
- Participation: Being involved in how things are run.
- Social Responsibility: Sharing wealth fairly.
- Innovation: Always trying new and better ways of doing things.
These ideas guide all the cooperatives. They help Mondragon focus on customers, grow, be creative, make a profit, support its people, and help the community.
How Wages Are Set
At Mondragon, there are rules for how much people get paid. The highest-paid managers earn more than factory workers, but not by a huge amount. For example, a general manager might earn no more than 5 times what the lowest-paid worker earns. This ratio can be different in different cooperatives, from 3 to 9 times.
Workers vote on these wage ratios. Compared to other companies, Mondragon managers earn less than top managers elsewhere. But the lowest-paid workers at Mondragon earn about 13% more than similar jobs in other local businesses. This fair pay system can sometimes make it hard to hire managers from other companies.
What Mondragon Does
Mondragon Corporation works in four main areas: finance, industry, retail, and knowledge. The "knowledge" part makes Mondragon different from many other business groups. In 2013, the corporation made over €12 billion in total sales. It employed 74,061 workers.
Finance
This area includes the bank Laboral Kutxa and the insurance company Seguros Lagun Aro. It also includes Lagun Aro, which helps workers save for retirement and other benefits.
Industry
Mondragon's industrial companies make many different things. They produce goods for people to buy, like Orbea bicycles and exercise equipment. They also make machines and parts for other businesses.
For example, they are a top Spanish maker of machine tools. These machines are used to shape metal. They also make parts for cars, like brakes, axles, and engines. They produce parts for home appliances too.
In construction, Mondragon builds large structures and supplies materials. They make elevators through the ORONA Group. They also offer services like engineering, design, and language translation.
Many of Mondragon's industrial sales come from outside Spain. In 2013, 71.1% of their sales were international. They have factories in many countries, including China, France, Mexico, and the United States. In 2014, their industrial cooperatives created 1,000 new jobs.
Retail
Mondragon runs Eroski, which is one of the biggest retail groups in Spain and southern France. Eroski has many different types of stores, including hypermarkets, supermarkets, travel agencies, and petrol stations. Workers and customers can both take part in making decisions at Eroski.
The retail area also includes the food group Erkop. This group handles catering, cleaning, and farming. For example, Auzo Lagun is a cooperative that provides catering and cleaning services.
Knowledge
This area focuses on education and new ideas. These have always been very important for Mondragon's growth. Education is mainly provided by Mondragon University. Other schools like Politeknika Ikastegia Txorierri also play a big role. The Otalora center helps train managers and spread cooperative ideas.
Mondragon University is a cooperative university. It teaches students knowledge, skills, and values. It works closely with businesses, especially other Mondragon cooperatives.
New ideas and technology come from the cooperatives' own research and development (R&D) teams. Mondragon also has 12 technology centers and the Garaia Innovation Park. These centers help develop new technologies. In 2013, their network of technology centers employed 1,700 people. Mondragon has many patents for new inventions.
What People Think About Mondragon
Many people have studied Mondragon to understand its success.
In 2012, Richard D. Wolff, an economics professor, praised Mondragon. He said it was a great example of a different way to run businesses. He liked that it paid good wages, let workers make decisions, and treated women fairly.
Noam Chomsky said in 2012 that while Mondragon is an alternative to traditional capitalism, it still exists within a capitalist system. He noted that this can limit some of Mondragon's choices.
Vicenç Navarro wrote that Mondragon is good at being efficient while also being fair and democratic. However, he pointed out that the number of employees who are not owners has grown faster than the number of worker-owners. This means that in some companies, like supermarkets, there are many more non-owner employees. Navarro suggested this could create a two-level system, especially if a company faces problems. For example, when Fagor had to close, worker-owners were more likely to be moved to other Mondragon companies.
The Mondragon system is seen as a good example of how cooperatives can be strong and last a long time.
The founders of Cooperation Jackson, a group of worker cooperatives in the United States, say Mondragon was a big inspiration for them.
Mondragon in Stories
Books by Kim Stanley Robinson
The Mondragon Corporation appears in some science fiction novels by Kim Stanley Robinson.
In his book 2312, Mondragon has become a huge system called the Mondragon Accord. This system uses smart computers to plan the economy. It controls large parts of the Solar System, like Mercury and many moons. Only parts of Earth and its space colonies still have capitalist economies.
Mondragon also appeared in Robinson's earlier Mars trilogy. In these books, it was one of the groups from Earth involved in settling and changing Mars. The cooperative also inspired groups that led a revolution for Mars's independence.
In Robinson's book The Ministry for the Future, Mondragon Corporation is shown as a model for a future economy where cooperatives are very important.
See also
- Cecosesola, association of cooperatives in Venezuela
- Distributism
- Horizontalidad
- John Lewis Partnership
- List of worker cooperatives
- Workers' self-management
