Saturday, February 19, 2011

Spain's astonishing co-op takes on the world

The Mondragon group is the world's biggest co-op, though the Basque network is better known for products such as Orbea bikes that won gold at the Beijing Olympics. Photo: JAVIER LARREA

By Ambrose Evans-Pritchard, International Business Editor in Mondragon, Spain 9:09PM GMT 16 Feb 2011

As Britain’s David Cameron embraces the ideal of worker co-operatives, a remarkable hi-tech variant with global operations is already thriving in the industrial heartland of Northern Spain.

The Mondragon Corporacion is the world’s biggest co-op with 85,000 'worker-owners’, though the Basque group is better known for products such as Orbea bikes that won gold at the Beijing Olympics and sell for up to £11,000, or Fagur fridges, Brandt ovens, Eroski shops, or the coming electric City Car. Anglo-Saxon elites might find its pay scale unsettling. Top brass in Mondragon’s mountain lair may not earn more than six times the lowliest cleaner. "In reality it is just three times after tax, but we don’t need much money to live here," said an ascetic Josu Ugarte Arregui, the global director. The differential in big Western companies can be 400 times, and is getting worse. The top pay of FTSE 100 bosses has jumped from 124 times the minimum wage to 202 times over the last decade, according to the Hutton Review of Fair Pay. Mr Ugarte struggled to explain how the group keeps talent. High flyers seem to stay for reasons of tribal loyalty or the ideals of Catholic social doctrine. To be a Mondragon manager is to accept the vows of priesthood, and indeed the movement was founded by a parish priest, Jose Maria Arizmendiarreta. His mission was to lift youths in the hilly Alto Deba region out of poverty after the Civil War, when Basques were on the losing side and a particular target of General Franco’s wrath. Nearby Guernica – flattened in 1937 by the Condor Legion, and seared in our collective mind by Picasso – holds the ancient oak tree and symbol of the Basque nation.
Article posted here

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