Steelworkers Consider Worker-run Coops

The Steelworkers announced a plan October 30 to create worker co-operatives in North America, which overturn the traditional workplace division between workers and bosses by having worker-owners make most decisions on a “one worker, one vote” basis.

The coops will be created in partnership with the Mondragon co-operatives in Spain, a 60-year-old network of worker-run businesses.

Days after the announcement, coop developers Andrew McLeod and Lisa Stolarski sat down with Rob Witherall, who is coordinating the new program for the Steelworkers. Here’s an edited version of their conversation, excerpted from the original on McLeod’s blog, Cooperate and No One Gets Hurt.

Q: How did this agreement unfold?

A: We had a lot of interest in worker ownership in the past. We’ve done a lot of work with Employee Stock Ownership Plans. We thought of doing some type of coops, both here and in Canada. Our ESOP experience soured us. By the time we were offered the opportunity to buy the shares the company was so financially strapped that it had a very small chance of success. Those that did succeed were usually bought out by some other investor, and even earning those shares didn’t actually translate to any accountability to the workers or worker input. It really didn’t change the nature of work in a lot of cases. (see more about that here).

Mondragon has an interest in a North American presence and we have interest in developing a union worker-owner coop model that works, because we are in situations where that’s going to be more beneficial in the long run for our existing members, or a way to build our membership.

Q: How did the partnership develop?

A: Ultimately our agreement was pretty basic and broad. We figured it was better to start with something that was broad and fairly simple and figure out where to go from there, rather than try to figure out all the details at first.

I think the figures I saw said there are about 14,000 people outside of Spain that work for Mondragon, but only about 10 percent are also owners. That concerns them because they want to grow more of the ownership piece. [When] they have gone in and taken over a place and set up without finding out what the culture and ideas are from the beginning, they have a hard time getting people to buy into being an owner. Because [the attitude is] “I’m a worker, I show up, I get paid, and that’s all I have to do.”

You want to keep the spirit of the workers having a vested interest. They understand that’s not something you can carbon copy—you have to make some adjustments. So that’s why, for them, it made sense to work with us because we have a lot of those relationships and can help steer them.

Our members are not making minimum wage and going from one job to another every six months. These are folks that are making, hopefully, a living wage at least and are more vested in what they are doing than the population in general. That’s important to [Mondragon]. They are looking for somebody that is really going to be committed to the work that they are doing and that plans on staying for the rest of their working lives, essentially. They create their own insurance for lifetime jobs.

Q: Do you have any projects lined up?

A: Not at the moment. There are a lot of ideas. Their estimate is that it takes about eight months from when they start talking to people to changing over to a coop.

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Q: Do you have any financing strategy that you’ve been talking about to convert workplaces to coops?

A: This is going to be the tricky part. Going back to the family business conversion example, people become members when they put in something like $21,000. Normally that’s just a piece of the overall pie, but a substantial piece from the perspective of the workers. But you still have to figure out the rest of it.

Normally, they may have a coop interested in investing. They may have an investment fund outside the bank. For us, we have friends in finance, so maybe there is a way to structure some of that, while still having the worker-owner goal. The National Cooperative Bank in D.C. is interested in getting behind some of this.

Q: Is the Mondragon bank going to invest in this?

A: I don’t know whether it would be the bank or one of the coops. They have been pretty firm that they don’t want to be a venture partner. It goes back to (a) a matter of having the money to do that and (b) they don’t want to essentially just be a business owner and employ workers any more than they already are. There may be some role for them to play, but I think it would be fairly small.

Q: They are not planning to work with Steelworkers to create coops to be subsidiaries of their coops—they want to create a whole Mondragon-type system in America?

A: Right. They are willing to help us implement their model, a worker-ownership model that is affiliated with them.

The key part for us is whatever we do first, we want it to be successful even if it’s five people. You want to be sure that it works right and is successful. Then you figure out how to do the next one.

Q: Are other unions interested in this?

A: Generally the answer is no.

Q: Do you have plans for educating your members and the public?

A: Generally [we] pull all of our allies and friends together and figure out where the common ground is. The analogy that we were drawing on is the start-up of the blue-green alliance. Nobody really got it at first, right? And so, as it took formation and there was a lot of interest scattered about, it was a way to kind of channel those folks together, and it developed some momentum. Now there are about 7 or 8 million people who are affiliated with it.