On Friday, my friend/colleague Lisa Stolarski and I sat down with Rob Witherell, who is coordinating the United Steelworkers’ freshly-announced plan to create worker cooperatives in North America. This will be modeled after, and in partnership with, the Mondragon cooperatives of the Basque Country (in Spain).

Here are some excerpts from our chat:

Q: How did this agreement unfold? Who initiated it? How did it develop?

Well, we had a lot of interest in worker ownership in the past. We’ve done a lot of work with ESOPs. We thought of doing some type of coops, both here and in Canada. Our ESOP experience soured us a little bit because essentially it was short-lived. 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…

We saved Algoma Steel up in Ontario through an ESOP which was good initially but didn’t work out as we’d hoped although we did save the plant by doing so. So yeah there has been a lot of interest going over the last couple of decades and Lynn Williams, one of our International Presidents, has been very interested and active working on this in Canada. I think they had a little more interested with the coop-stuff in Canada, and being a truly international union, we have lots of members in Canada so it opens us up to another experience.

So Mondragon specifically was somewhat happenstance as these things work out, because of where they are located in the Basque region. They are near where another company called Gamesa are located in that area as well. One of the people we had connected with through Gamesa also happens to be the Mondragon North American delegate… So that’s how the connection was initially made, just having conversations over the past year about the things that we are interested in doing, and what was important to us – what was important to them… And they have 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: When did it really get rolling? When did the serious negotiations for the statement that came out start?

It’s hard to say. It has been a series of conversations and e-mails and some drafts of what we wanted to do. Ultimately our agreement was pretty basic and broad. But 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 and figure out how to make that work. I think one of the key pieces in making this happen is to build the alliances and networks and making these connections. So I think Mondragon and the Steelworkers Union both acknowledge that if we are going to make this work, we probably need help doing that…

It’s one thing for us to have some common goals and say hey, let’s work together, and then it’s another thing to actually get it done. That’s really the hard stuff for us, so we’ve got to figure our situation and target and figure out how to make it work…

I think the figures I saw said there are about 14,000 people outside of Spain that work for Mondragon, but only about 10% are also owners. That concerns them because they want to grow more of the ownership piece. 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.”

So, that’s really important to them, to make that work. They understand that’s not something you can carbon copy – it’s going to have to be something a little bit different – you have to make some adjustments, but you want to keep the spirit of the workers having a vested interest, 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 in the direction that we can really help implement that model. 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. And so, 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?

Not at the moment. There are a lot of ideas…

It’s very preliminary and going to take a lot of work to figure out which ideas are going to be the most suited and also because their estimate is that it takes about 8 months, in their experience, from when they start talking to people to changing over to a coop…

Q: Do you have any sort of plan for accepting Request for Proposals?

I think that we are partly saying this is what we are looking to do, so (the announcement) can serve that purpose. We have gotten a lot of interest from people and are still trying to make as many of those connections as we can to see what possibilities are.

Q: Do you have any financing strategy that you’ve been talking about for these kinds of conversions?

Well, this is going to be the tricky part. Going back to the family business conversion exmple that they have given us. People become members when they put in something like 14,000 euros, so 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 an interested coop interested in investing. They may have farming an investment fund outside the bank. That’s kind of how they piece it together. 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. There is the National Cooperative Bank in D.C. that is interested in getting behind some of this…

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

I don’t know whether it would be the bank or one of the coops – I think there’s a willingness to maybe participate a little bit, but they have been pretty firm that they don’t want to be a venture partner… It goes back to (a) It’s 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: Just to clarify, 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?

Right – they are looking for, 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 5 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 you aware of other unions that are interested in this? Have any contacted you since the announcement and said that they want to get involved?

Generally the answer is no. I think our union is a little bit different – we are more willing to try stuff that is a little outside our experience. I don’t know that anything else is really invested in this yet…

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

Generally the piece is to pull all of our allies and friends together and figure out where the common ground is, where the common ideas are that we can work together and build from that. So that’s really the extent of the education piece because, again, depending on the situation, it could be way different from one piece to another. A bigger piece is going to be a lot more complicated to create – a couple thousand member owners all at once, right? So it really depends on what are the opportunities that come up and how we deal with those. The analogy that we were drawing on this week is the start-up of the blue-green alliance. Very few people in the mainstream media– 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…

Thanks to Susan McLeod for speedy help with transcription of this conversation. (Hi mom!) The original transcript has been cleaned up with some light editing, and the elipses (…) denote longer edits.