USW Report: A ‘Union Model’ Plans to Bring Worker Coops to the Ohio Valley

Michael Peck, Mondragon Cooperative delegate in North America, speaking at recent USW press conference in Pittsburgh

Steelworkers Announce 'Union Model' for

Bringing Worker-Owned Coops to the U.S.

By Carl Davidson
Beaver County Blue

The United Steel Workers and the Mondragon Cooperative Corporation-the largest industrial union in the U.S. and the world's largest network of worker-owned cooperatives respectively-held an upbeat press conference at USW headquarters in Pittsburgh March 26, announcing new progress in their innovative two-year-old partnership.

"For American workers, the traditional corporate model for organizing production and producing jobs has broken down," stated Tom Conway, USW International Vice-President for Administration. "It's simply not fair, and we're not afraid to try something different."

For those unfamiliar with Mondragon, 'something different' was inspired by the Steelworkers investigation into the Mondragon cooperatives (MCC) in Spain's Basque country. MCC is a 50-year-old thriving and ongoing experiment in radical democracy consisting of some 120 worker-owned cooperatives involving nearly 100,000 workers and allied with another 130 allied coops in the region, with revenues in 2011 of some $24 billion.

The MCC coops operate one the basis of one worker, one share, one vote-and no one outside MCC holds any shares. It is the leading edge of the Spanish industrial economy.

The USW took note of MCC after a successful effort with the cutting edge Spanish wind turbine firm, GAMESA, to build three innovation green energy factories in Pennsylvania. While not part of Mondragon, GAMESA and MCC shared a common representative in the U.S., Michael Peck, who then took a USW team to Spain to visit MCC.

Leo Gerard, the USW's president, has long been an advocate for a 'clean energy and green manufacturing industrial revolution' as a progressive way out of the current economic crisis. But given the conflicted and deadlocked Congress on such matters, little is being done on the matter trough traditional channels. Hence the turn toward the Mondragon partnership.

After the initial announcement of the joint effort in the fall of 2009, little was heard about any progress on the matter. Yesterday's press conference, however, revealed what was going on behind the curtains. There were three major projects underway.

The first was the production of 'Sustainable Jobs, Sustainable Communities: The Union Coop Model.'

As a piece of intellectual work, it represents a remarkable effort to take the core MCC principles and model, and translate into an America reality through the lens of progressive trade unionism. It thus connects modern-day cooperativism back to James Madison, Alexis de Tocqueville, Abraham Lincoln and Terence Powderly of the Knights of Labor. More important, it reviews the MCC model from the perspective of existing U.S. law on coops, Employee Stock Ownership Plans (ESOPS) and small businesses, which vary from state to state-and comes up with several variations on how it can work here.

"This is a made-in-America, eclectic pragmatic model," Michael Peck, MCC's North American representative explained. "It's based on and carries over the core values of the Mondragon model, but with new adaptations to American realities and traditions. Most obviously, the American model includes a role for the USW and other unions."

The second component was a gathering of collaborating allies. In addition to the USW and MCC, several other major players attended the event. The Ohio Employee Ownership Center (OEOC), a major partner in pulling together the Evergreen Cooperative in Cleveland, Ohio, was there, as was the National Rural Electric Cooperative Association (NRECA), responsible for the semi-rural and rural coops that brought electricity to every corner of the U.S.

"Employee owned firms with an ownership culture," explained Bill McIntyre of OEOC, "have consistently outperformed both ESOPS without an ownership culture and regular businesses without any employee ownership or ownership culture." Putting this idea in the historical context of rural coops many Americans are familiar with, Martin Lowery, NRECA executive vice president, added: "Statistics emerging from the Great Recession demonstrate that employee-owners were much less likely to have been laid off and much less likely to be looking for a new job than were non-employee-owners. It's all about local ownership and initiative. At bottom we're all about self-reliance. It anchors firms to communities, and shapes a bright future."

Third, Peck announced the launching in Pittsburgh of the Clean and Green Laundry, a worker cooperative doing industrial scale laundry for hospitals, hotel and other major institutions in the city. The project is due to launch in June, with the plant following a little later. It was largely modeled after the successful Evergreen Cooperative Laundry in Cleveland, and now initiated in Pittsburgh with some help from the Steel Valley Authority and other local foundations. Cincinnati was mentioned as another city likely to see USW-Mondragon related coops soon. The Cincinnati Union Coop Initiative there has three projects in the works-'Our Harvest,' a food distribution center coop, an energy retrofitting/green detox construction coop, and Danobat Group Railways, a manufacturing cooperative of rail industry parts that is part of MCC in Spain.

One key to the success of Mondragon overall was its initial three-in-one combination of worker-owned school, bank and factory, where the first two served the latter as sources of financing and innovation. How would that work in the USW Union Coop Model? I asked Peck afterwards. "Here in the U.S. we have the National Cooperative Banks, and the PNB banks in Pittsburgh are connected to it. We can work with them. And it's also an excellent idea to pull in community colleges and trade schools as stakeholder partners."

It's often said that a journey of 10,000 miles begins with the first step. Here in Pittsburgh, several steps have been taken on a new path for U.S. trade unions and their community allies as well.