Basque Cooperative creates €70 million fund to help Fagor firm

At a time of recession, when companies all over the world are struggling to fight global financial crisis, Basque Country's Arrasate-Mondragón cooperatives led once more the way showing an alternative to the cutthroat and individualistic model that has arguably brought many economies to their knees.

In a general assembly held on Monday evening, workers at the worker-owned co-operative Mondragón Corporation approved unanimously to create a restructuring and employment fund that will guarantee the financial sustainability and employment of Fagor Electrodomesticos, a large domestic and commercial appliance manufacturer run by the Basque cooperative.

By taking this decision, the members of the cooperative maintain the tradition of solidarity and cooperation that has made the Basque group renowned all over the world thanks to its alternative business model and that has proved effective to face economic crisis such as the current one.

Half of the €70 million fund will come those companies in the group that have profits. It will be a 25 % percentage of the so-called 'corporative funds', a permanent fund usually used in order to set in motion new projects.

The remaining 50 percent will come from all the companies in the group, no matter whether they show a negative or positive balance. They will devote 1 percent of their gross salaries for six years. It won't come from the workers' salaries but will be an added stress for their profit and loss accounts.

Fagor Electrodomesticos, considered to be the jewel of the Mondragón Co-operative (MCC), is Europe's fifth-largest domestic appliances manufacturer since it purchased the Brandt Group in 2005. It also includes the brand names of Ocean, SanGiorgio, and De Dietrich.

The Mondragón Co-operative (MCC) is a multidisciplinary group that brings together 110 companies and employs more 100,000 people. The broad spectrum of companies of the Basque group ranges from manufacturing equipment, bicycles, and electronics, to an university and its own savings bank, Laboral Kutxa.