Monday, June 5, 2023

Mondragon Corporation loses two of its main cooperatives.

Mondragon Corporation (formerly MCC) lost two of its main cooperatives. The working partners of elevator manufacturer Orona and construction firm Ulama have agreed this Friday by a large majority to leave the Basque cooperative group and start their own business alone. The departure of these two companies is a hard blow for Mondragón, the benchmark of Basque cooperativeism, as they represent 15% of total sales and 13% of all employment. Separation is supported by 70% of the votes in the Orona Assembly and 80.52% in the Ulema, as reported by these companies.

Orona and Ulma are no longer the largest industrial group in the Basque Country and tenth in Spain. As did Irizar (bus manufacturer) and Empo (specialized in industrial valves) in 2008, they have opted to maintain the cooperative philosophy, but outside the Mondragon brand. Of the 1,559 Orona members (89%) attending the assembly, seven out of ten (1,089 employees) supported the management’s proposal. Ulema, a group that integrates nine companies, limited itself to reporting that the break with Mondragón was supported by 80.52% of those present with voting rights.

Hours after learning the results, Mondragón Corporation released a statement announcing the start of “a new phase” for the cooperative group, which would “continue to emphasize the values ​​of interoperability and solidarity, hallmarks that they have made of their It has allowed cooperatives to expand their business projects and rely on the solidarity of the group in the face of adversity.

The actions of Orona and the Ulama have been coordinated at all times. These two cooperatives, which have a total of 11,000 employees, expressed their intention to change the relationship model they maintain with the corporation in the middle of this year. He tried to ensure that the Mondragón Congress, held last November, allowed the creation of a new person within the cooperative group. Their intention was to stop a base cooperative associated with Mondragón and create a new figure of “agreed cooperative”, which they would accept so as not to be subject to Congress-approved rules and cease to participate in the system in general. Intercooperation and solidarity distinguish the cooperative model created in 1956. This proposal was rejected outright, leading to growing discontent in both the cooperatives.

According to the idea put forward by Orona and Ulama, they would be exempted from the obligation to contribute a portion of their profits – at least 13% – to the Solidarity Fund, which aims to help loss-making cooperatives. Last year their contribution to this fund was 24 lakh and 18.5 lakh respectively. From now on, after their separation, these economic commitments will disappear for both firms.

The president of Ulma, Lander Díaz de Gereanu, has assured today in an informative note sent by the company based in Onati (Gipuzkoa) that the bodies of the Ulma cooperatives “have received a clear mandate”. “We are part of the success model that the Basque cooperative model represents. And we will always protect and support their values. We believe that the best way to do this is to make Ulma a strong cooperative industrial group”, they say.

Orona is the fifth European group in vertical mobility solutions. In 2021, it recorded sales of 832 million and achieved a net profit of 84 million. It ended that year with 5,507 employees, of whom 1,750 are co-operative members. Ulma brings together nine cooperatives and employs 5,500 people (2,789 are cooperative members). Last year it did a turnover of over 900 million and earned a profit of 66 million. They represent a significant quota within the corporation. Mondragón is made up of a hundred cooperatives, eight foundations, one mutual, 10 coverage institutions, and 80,100 employees. Last year, its sales increased by 5% to 11,404 million and the investment made during the last five years exceeded 1,450 million. This year it is expected to exceed 12,000 million (6,500 million in the industrial sector) in billing.

Both Orona and Ulama, in addition to approving their exodus, have given the green light to those responsible for these two cooperatives to try to “promote future cooperation” with the corporation “for the development of the cooperative movement”. . They wish that the contributions they are making to funds managed by the Mondragón Foundation “could be used for the development of the cooperative movement”, without specifying what kind of operations would receive this funding.

The decision he has taken was one of the most far-sighted considering the deteriorating relations between the parties in recent months. Modragón’s president, Inigo Usain, recently assured this newspaper that the departure of Orona and Ulma would not mean the collapse of the group: “On the contrary, this movement [de Orona y Ulma] This has caused more unity among the rest of the people. The co-operative movement is needed more than ever and it has to be continued.”

“Mondragon wants to convey a message of hope”, says the corporation in its latest message, “in the belief that the cooperative model is the right one to meet the challenges of the markets and create a more harmonious and sustainable society”.

Workers of the Ulma company go to the Ilunbe bullring in San Sebastian this Friday to participate in voting on the departure of the Mondragón group.Javier Hernandez Juantegui

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