We arrived in Mondragon at a challenging time. Fagor Home Appliances, the first and largest Mondragon industrial cooperative was preparing to declare bankruptcy following the collapse of the housing boom in Europe. Two years ago when we filmed at Fagor for SHIFT CHANGE, we knew that production was down and some Fagor workers were transferring to other coops, but until our recent trip we didn’t realize how difficult things had become.

As the Dean of the Business School at Mondragon University explains , “Cooperatives are not isolated. They share suppliers, they share markets, and they share in the general economic climate.” Sales of home appliances like refrigerators and dishwashers fell by 75% in just three years. Fagor’s competitors in Europe were producing in low wage countries and importing those products to Europe. Over the past few years, the other cooperatives in the Mondragon network had pumped in over $300 million euros in emergency funds to try to keep Fagor Home Appliances afloat, but with the greater Spanish economy stagnating this was not enough. However, unlike what happened in the US when the home appliance industry moved to Mexico and beyond, Fagor workers are not thrown into the street with no options. Nearly all will find positions in other Mondragon cooperatives, some will take early retirement, and all are eligible for extended unemployment benefits.

We discussed the situation extensively with Mondragon leadership, worker/owners of several coops, and faculty at Mondragon University. Despite the extraordinary measures of assistance from other Mondragon coops, the bankruptcy at Fagor is causing real hardships. Worker owners will lose their investment in the company. Other companies in the region that have been suppliers to Fagor are losing their principal customer. And as Fagor members transition to other Mondragon coops, those coops will need to lay off probationary workers, those who had not yet become members but were expecting to do so.

Worker/owners across the Mondragon cooperatives are discussing the Fagor bankruptcy and how to avoid anything like this happening again. We talked with Alaitz, a second generation member of Fagor Automation [which is still going strong] one of whose sisters is a worker owner at Fagor Home Appliances. Alaitz has the last word in SHIFT CHANGE, where she talks with pride about the Mondragon Cooperatives and vows to keep working to make them stronger for her children. She said that she had been thinking about what she says in SHIFT CHANGE and about whether she would say the same thing again after what has happened. “Yes,” she said, “I certainly would.”

Filed in: Basque Country • Blog • Cooperatives • Mondragon

