The Mondragon Corporation: Criticisms - Part 3 of 3

By Peter Schnall and Erin Wigger

In our first two blogs we have presented Mondragon’s business structure and corporate values with an emphasis on those aspects we find particularly important in vouchsafing the health and safety of its workers. Here, we’d like to address a few problems with the Mondragon experience as a “worker cooperative” corporation as it has undergone expansion and evolution over the past 30 years.

Expansion of the company:

By the mid-1980s it had become apparent to Mondragon’s that many of its products were in direct competition with other multinational companies. Since retooling their company to make other products would be difficult and costly, it was decided that the company would instead adapt to current global practices rather than dramatically change their own products (2,5). This meant, for example, that Mondragon would embrace expansion abroad,

Erosion of “worker collective” values:

Mondragon opened new plants in Mexico, Morocco, Egypt, Argentina, Thailand and China to name a few and, while Modragon insists it tries to ensure good working conditions in its international plants, its international workforce have not been offered member-ownership. Even within Spain, Mondragon-owned popular Spanish food chain Eroski, did not offer its 40,000 employees a chance to become worker-owners until 2009 (7, 5, 9, 2). This resulted in a loosening of Mondragon’s grip on its own stated values as a worker-owned cooperative.

Today, roughly one-third of Mondragón workers are nonmembers out of 256 companies. This exceeds the original Mondragón commitment to never employ more than 10% nonmembers.

“Temporary” labor and gender inequality:

Gender equality in their hiring practices is also an issue. As with other globally competitive capitalist corporations we’ve seen (e.g.. Foxconn) when Mondragon experiences an increase in demand from the marketplace they draw from a pool of temporary workers to fill the labor gap. Temporary hires at Mondragon are overwhelmingly female, thus many lower positions within the company are being occupied by females while blue-collar jobs at Mondragon’s coops remain largely male (10). Temporary female workers often receive less pay and, by definition, have less job security.  This social stratification of workers by gender is the anti-thesis of workplace democracy.

Alienation:

In the mid-1960s alternative approaches (in the form of Scandinavian work groups) were introduced to Ulgor workers in an effort to replace the rote and alienating line work Taylorism had brought. The recession of the 1980s, however, created a shift away from alternative manufacturing processes as the coops began to be more concerned with their bottom line (11). By the early 1990s several lean production practices had been accepted, including just-in-time inventory along with other manufacturing practices to increase productivity such as shift work (10). It’s hard to imagine in a company where workers have a share in power the actual organization of work within its factories has been left basically untouched. These practices bring into question the ability of Mondragon to support workplace democracy and whether all member-owners are truly active in decision-making within the company. (9,5,10).

Conclusion:

Mondragon is doing, many things right as we discussed in our previous two blogs re the company. However, given their commitment to the goals of worker participation and improved worker health, one would think they would extend offers of membership to their foreign employees, take a stand on gender inequality (possibly through outreach through their educational branch) and do more to encourage democracy and participation on the work floor.

1. http://www.mondragon-corporation.com/language/en-US/ENG/Who-we-are/Introduction.aspx

2.http://en.wikipedia.org/wiki/Mondragon_Corporation

3. http://www.ownershipassociates.com/mcc-intro.shtm

4. http://www.mondragon-corporation.com/ENG/Co-operativism/Co-operative-Experience/Historic-Background.aspx

5. http://participedia.net/en/cases/mondrag-n-co-operative-corporation

6. http://distributistreview.com/mag/2010/06/mondragon-and-the-global-economic-meltdown/

7. http://www.dollarsandsense.org/archives/1997/1197huet.html

9. http://www.yesmagazine.org/issues/the-new-economy/mondragon-worker-cooperatives-decide-how-to-ride-out-a-downturn

10. http://www.globaljusticecenter.org/2011/11/15/cooperativization-on/

11. http://www.community-wealth.org/_pdfs/articles-publications/outside-us/paper-clamp.pdf