On 14th April 1956, whilst many people of Mondragón were discreetly and rather warily celebrating the 25th anniversary of the Second Republic, Father José María Arizmendiarrieta was blessing the foundation stone of Ulgor, a company with a name which drew together the identity of the founders: Luis Usatorre, Jesús Larrañaga, Alfonso Gorroñogoitia, José María Ormaechea and Javier Ortubay.
They had to wait almost three years until May 1959, as Jesús Larrañaga recalls in the introduction, for the first bylaws of Talleres Ulgor to be approved.
Father Arizmendiarrieta and Ormaechea went on foot from the old building of the Escuela Profesional, today Mondragon Eskola Politeknikoa, to the piece of land known as Laxarte, where they had already bought a plot for 27 euro cents (45 pesetas) per square metre. Ormaechea was in charge of methodically measuring out the plot and a fortnight later building work started on the MONDRAGON Experience’s first production plant: a 750m2 two-storey concrete structure.
The Escuela Profesional, today Mondragon Eskola Politeknikoa, came of age with the upgrading of Vocational Training which passed from the Ministry of Labour to that of Education and Science, thereby regulating that training with official recognition.
In the early years of the Profe, the money to maintain it came from the “Ministry of Education, Provincial Council, Chamber of Commerce, Provincial Savings Bank of Guipúzcoa, town councils of Mondragón, Arechavaleta, Escoriaza and Oñate”, local companies, family men and associates.
At the end of the year, by order of the Ministry of Labour, members of cooperatives were excluded from the General Social Security System. This decision of the Ministry was decisive in setting in motion the actions aimed at creating what is today Lagun Aro, a Voluntary Mutual Benefit Organisation. Lagun Aro was the co-operative response to a lack of protection.
The first year of female students at the Escuela Profesional also began their studies and at the same time, a chemistry course aimed especially at female students was also started.
Regarding training and education for women Father José María wrote at the time: “It is a big mistake that women do not enter vocational training on a general basis, nor take part in retraining and in-service training processes opening the way for professions which are rejected today as unsuitable”.
This was the year in which something fundamental for the future of the incipient MONDRAGON co-operative movement took place: Father José María Arizmendiarrieta invented Caja Laboral Popular.
What makes Caja Laboral different from the grassroots co-operatives is the mixed composition of its social bodies, based on both worker-members and representatives from the associate co-operatives. In accordance with its suprastructure nature, which Caja Laboral has had from the start and during its subsequent development, the representatives from the co-operatives have the majority in its social bodies.
For more than twenty years the cooperatives would guarantee with 25% of its share capital all the new credit co-operative’s operations. Likewise, in the early years all of Lagun Aro’s financial reserves were fully deposited in Caja Laboral Popular.
The Escuela Profesional, which started its activities in academic year 1943-1944 with twenty-one students, now had more than 300, a figure that began to be significant in the field of ocational training. It was, like many of our other institutions, a creation, above all of Father José María and his slogan “socialising knowledge truly democratises power” is an accurate reflection of the motivation behind Eskola, one of his most cherished projects.
The Cooperación magazine was set up, later to become T.U. (Trabajo y Unión) and finally T.U. Lankide.
Caja Laboral’s first branch office was opened in a modest premises on Calle Ferrerías in Arrasate/Mondragón and shortly afterwards it moved to its current location at number 27 Calle Don José María Resusta (today Iturriotz Kalea) in the same town. Back then, the slogan libreta o maleta (savings book or suitcase) was popularised, in an attempt to convey the importance of savings to the development of the co-operatives and, by extension, the development of our country.
Sin abandonar su primera actividad, la construcción de troqueles para corte y embutición, Arrasate, apoyándose en la capacidad técnica de sus socios trabajadores, emprende la Fabricación de líneas transfer para cuerpos metálicos (frigoríficos, lavadoras, etc), continuando con máquinas de tubo, perfiladoras, prensas excéntricas y cizallas.
La cooperativa Arrasatecomercializa
sus productos con la marca Taci
(Talleres Arrasate Cooperativa
Industrial) más tarde adoptará la
denominación actual Fagor Arrasate.
Comienza uno década extraordinaria
de desarrollo y consolidación de las
cooperativas con Ulgor y Arrasate
como unidades tractoras, a la vez
que las medidas proteccionistas
arbitradas por la política económica
de la dictadura hacían especialmente
accesible el mercado interior.
The opening of the branch office in Aretxabaleta was the first step in Caja Laboral’s expansion. It left Arrasate/ Mondragón to spread like wildfire to neighbouring towns. Caja Laboral’s Business Division was also created and the industrial co-operatives Copreci, Ederlan and Lana were set up.
Ulgor continued to expand and on 8th February, with the help of the local and provincial authorities, it opened its new manufacturing facilities for selenium semiconductors.
On the same date, we discovered that Ulgor was spending twice as much as anticipated on training, a fact which according to a reporter at the time was highly alarming. Existing documents also show a high level of awareness in the co-operatives as a group about matters like absenteeism due to illness or accidents at work.
In 1963 the following theory was put forward regarding Democracy: “Democracy is one of the rules of the game for the co-operative movement. Democracy has to be conceived as the method and procedure for combining the interests of the individual with those of the group… You have to socialise knowledge to be able to democratise power effectively”.
In March Caja Laboral held its Annual General Meeting. Representative attended from around twenty associate co-operatives, which shows that it was a co-operatives’ co-operative.
It is curious to note that a return to a culture of saving was very effective in raising the awareness of savers, especially in the early years of Caja Laboral. It is worth highlighting that on 1st May, Labour Day, a new branch office was opened in Oñati.
A mutual support movement was established between the co-operatives in which it was possible to begin to see some of the Experience’s future structures timidly taking shape. This was an embryonic movement of what would later be called the Mondragón Co-operative Group, then Mondragóon Co-operative Corporation and now just MONDRAGON.
Back then in 1964 thought was being given to updating the organisation and it was emphasised that: “We need to think about developing a set of institutions to provide support for our co-operative aims and plans: institutions consistent with our social and economic vision. The co-operative movement will be a passing phenomenon if it does not come to the fore and openly develop in society as a whole thereby taking root in education and in social and economic relations”.
There were now one thousand students studying at the Escuela Profesional Politécnica and the co-operatives Irizar and Miba formally joined the movement.
As a result of the plan to split Ulgor, the Electronics Division was turned into a new co-operative called Fagor Electrónica, S.C.I. It became the fifth co-operative enterprise to join the Ularco Co-operative Group, which was a promising reality on the threshold of 1966.
There was an accident at Copreci, an interesting report at the time came to the following conclusion: “When trying to clean the milling machine carriage with the machine switched on, the blade got tangled with the cloth, dragging his hand and causing the injury. Conclusion: Accident down to the worker for not having switched the machine off before starting to clean it”.
The Escuela Profesional Politécnica opened new buildings and a sports complex in the area known as Iturripe, occupying a surface area of 40,000m2.
In May Caja Laboral opened branch offices in Gernika, Eibar and Legazpia. This took the total to 24 branches open to the public and the number of associated co-operatives came to 36.
Total sales for the co-operatives were just in excess of €18m (3bn pesetas), with exports for the first time accounting for €312,500 (52m pesetas). The MONDRAGON cooperatives began to open up to international markets and, from that time, exports have always risen significantly faster than total sales.
Danok Bat, today Danobat, a firm of recognised prestige in the machine tool sector, was formally set up as a co-operative enterprise and Fagor Electrónica and Tajo came on board.
During the year work was carried out to update the whole health and mutual benefit system, with the setting up of the Mutual Benefit Service in the new structure known as Lagun Aro, based on changes recommended by experience and developments in social legislation applied generally in the area of Social Security.
It was in 1967 that Lagun Aro’s current system was practically established, although the Mutual Benefit Service was still part of Caja Laboral.
The same year Impreci became a member, and has now merged with the Fagor Ederlan co-operative.
Over the year the total cooperative workforce increased by 17.6% and sales rose by 22.4%.
An Extraordinary General Meeting of Caja Laboral approved the new bylaws for Lagun Aro. This highlighted the level of maturity shown by cooperators in finding a solution to social and economic problems which could affect the co-operatives and their members in the short and long-term.
The Official State Gazette of 15th July Published the Decree by virtue of which the Escuela Profesional Politécnica, today Mondragon Eskola Politeknikoa, was recognised as a State Centre of Middle Grade Technical Education, that is to say, Technical Engineering.
The MONDRAGON co-operatives now had more than 6,000 worker-members, with total turnover in excess of €24m (4bn pesetas). Amat (today part of Fagor Ederlan), Coinma, Danona, Tolsan, Orona and Goiti all joined the Group.
The signing of a preferential agreement between Spain and the European Common Market was on the horizon as a stepping stone towards full membership. This did not pass unnoticed by our co-operatives who saw the need to consolidate their position: either by means of separate development or by means of joint development with other manufacturing or financial enterprises.
Alkargo, T. Ochandiano (today Rochman), Batz, Coinma, Eredu, Biurrarena, Matz- Erreka, Egurko and Elkar all came on board.
Orona, which now had more than one hundred members, started work on its new factory to produce lifts, whilst Alecop began building work on its new blocks to house offices and workshops, on land next to Eskola.
Comerco was set up, which the following year would change its name to Eroski, a co-operative that combines worker-members and consumer members. he merger of five consumer cooperatives was behind this new set-up.
The presentation of the Fagor-Mercier cycling team to the media and the sports authorities took place in Mondragon Eskola Politeknikoa’s auditorium. Some of the most wellknown international cyclists like Luis Ocaña, Stephen Roche, Txomin Perurena and Luis Otaño rode for the Fagor team, which did not finally disappear from the scene until the mid-eighties.
The MONDRAGON co-operatives now had more than 9,000 workers and the Zubiola co-operative, located in Azpeitia in the province of Gipuzkoa, formally joined.
In 1970, a contributor to TU Lankide alerted us to computers breaking in to the work environment, presuming that it would mean the increasing preponderance of technical mastery over the human aspect, which we could well call technical colonisation.
Caja Laboral had more than 100,000 savers, a highly symbolic figure which is a true reflection of the rapid consolidation of our credit co-operative.
The Chief Executive’s report highlighted at the Annual General Meeting that the savings deposited in Caja Laboral showed an increase of 50% over the figures for the end of 1970, in a year in which the general growth in banking activity was 22% and in savings banks 19%.
The associated co-operatives, on the other hand, saw more modest growth: 14%, in a year in which the gross industrial product showed no growth at all. In view of the general slowdown in industry, the year for the co-operatives could be classified as highly satisfactory.
In Tripoli (Libya) Arrasate was awarded a contract, after an international invitation to tender, for a turnkey installation for a production plant to manufacture welded tubes. The plant, with a surface area of 17,000m2, was worth a total of €4,800,000 (800m pesetas).
The Eroski co-operative, with 32 stores in operation, now had more than 17,00 consumer members, with a significant increase in turnover, the composition of which by sections continued to develop in favour of non-food sectors.
It is interesting to note that in 1972 turnover per head for the co-operatives as a whole was around €6,000 (1m pesetas in the currency of the time); a far from negligible amount if we take into account the fact t that working hours had been reduced to 45 hours a week. A lot of hours if we compare it with today, but in the early seventies a 45-hour working week was a considerable advance in social terms.
Sales of the co-operatives associated with Caja Laboral totalled €72.12m (12bn pesetas), with a workforce of 11,600 members which is significant progress in all respects, showing the viability of new types of management company and democratic participation.
Lagun Aro, the Voluntary Mutual Benefit Organisation, was turned into a second degree co-operative. The Bergara-based co-operative Doiki joined the Group and the process began to set up what would become the Ikerlan Research Centre.
“We are living the end of an era that has lasted a total of fifty years: the era of neo-capitalism and we are entering a time of radical reappraisal that will inevitably mean new suffering and misfortune. The world that emerges from this crisis will be so different from that of the sixties in the same way that the period we have just left behind was different from the inter-war years… there is no solution within the framework of the existing system”..
The historian Geoffrey Barraclough was not pulling any punches in what he had to say and the developed nations were getting ready to enter one of their worst crises, the MONDRAGON co-operatives as well.
Caja Laboral, for its part, opened its brand new head offices on the hillside of Olandixo (now Paseo Don José María Arizmendiarrieta) in Arrasate/ Mondragón. Since then, the hill where legend has it was located the mythical dragon’s lair, has housed one of the co-operative Experience’s most emblematic buildings.Two co-operatives from the province of Bizkaia joined the Group: Eika based in Markina and Lealde in Lekeitio.
The crisis that started in 1974 would lead to serious difficulties in some cooperatives but, in spite of that, there was an increase in net employment in the co-operatives as a whole. Mutual support from the co-operatives and the magnanimous attitude of Caja Laboral, in short, Solidarity, was the key to our strength and this Solidarity has been MONDRAGON’s main tool for dealing with difficult and uncertain times.
Solidarity in terms of effort, but responsible Solidarity as Father José María maintained: “Nobody in need should be left helpless but neither should we protect, without distinction, those who act diligently and with caution and those who show no concern about things that should not be neglected”.
Caja Laboral and several other cooperatives signed formal collaboration agreements with the Ikerlan Technological Research Centre. Ulgor was awarded the Export Leader prize in official recognition of its technological capabilities and the quality of its products.
On 29th November 1976 Father José María passed away, leaving us a final message: “Looking back is an offence to God, you must always look forward”. Father José María Arizmendiarrieta came from Markina and arrived in Arrasate/Mondragón in 1941, as a newly ordained priest. It was to be his first and only placement.
Here are some of the key moments in his life:
1956. Father José María blessed Ulgor’s foundation stone.
1959. Caja Laboral Popular was set up, inspired by Father José María, as a support body for the development of the co-operatives.
1966. The Minister of Labour, Romero Gorría, awarded him the labour medal.
1968. He suffered an angina attack and his friends and colleagues replaced his popular bicycle with a brand new Velosolex motorcycle.
1974. He had open-heart surgery. He died two years later and there was a great show of grief and sorrow at his burial.
“Faced with a near future that looks tough and tense, our greatest strength lies in our willingness to work together, to form a Group, with all that this implies about putting the general interest before that of the individual” so said the introduction to Caja Laboral’s Annual Report. The Caja opened new branches in Donostia-San Sebastián, Vitoria-Gasteiz, Pasai Antxo, Erandio and Santutxu (Bilbao).
In spite of the difficult economic situation and the uncertain prospects, the Group performed extremely well in 1977. Sales were up 37% compared to the previous year and turnover was close to €198m (33bn pesetas.). The following co-operatives from the province of Gipuzkoa came on board: Latz, Kendu, and Dikar together with Aurrenak, based in Vitoria.
It is interesting to note that from 1963 to 1977 the cost of living increased at a constant annual rate of 9.56% and our wages at an average rate of 15.49%, that is to say, 5.93 percentage points higher, which in fourteen years had led us to double our purchasing power.
In 1978 specific work requested by the co-operatives from the Ikerlan Technological Research Centre accounted for 25% of the centre’s total activity, with the projects carried out involving 12 co-operatives from the Group.
The co-operatives Irizar and Alecop took a significant step in the foreign market. The order was for 40 fitted-out trucks for Venezuela, to be used as travelling classrooms and workshops. The bodywork was built by Irizar, and Alecop, a co-operative largely made up of students, was in charge of the educational equipment.
Three industrial co-operatives came into the Group: Herriola from Aulestia/ Murelaga, Kide located in Ondarroa and Ona-Pres from Trapagaran. It is also worth highlighting the setting up of the Goilan and Orbide groups. Goilan included the following co-operatives: Ederfil, Eredu, Irizar, Kendu and Orkli and the Orbide Group, in turn, included Berriola, Latz, Orona and Vicon.
In 1979 Lagun Aro was studying a new benefit to cover unemployment, and the possibility of giving pensioners representation at its General Assembly. It is worth highlighting the work of Lagun Aro and Caja Laboral, not just in the financial field, where their work was more visible, but also in the economic area: providing considerable external economies, which meant significant support for the co-operatives’ results.
In a difficult year of widespread crisis, the exports of the MONDRAGON cooperatives saw a spectacular leap accounting for close to €53.5m (8.9bn pesetas) which was a rise of more than 54% although the starting position (€35.3m, 5.9bn pesetas) seen from the perspective offered by time, was very modest.
Hertell from Ikaztegieta (Gipuzkoa), a co-operative enterprise manufacturing pumps and depressors for agriculture, joined the Group. With this new member, 90% of the Group’s industrial co-operatives were located in two provinces of the Basque Autonomous Community: Gipuzkoa and Bizkaia.
The Basque Parliament was elected and the new Basque Government created, which took over the bodies of the pre-autonomous Basque General Council, and started to develop its own structures and departments for selfgovernment. This was another step towards the normalisation of democracy.
Productivity, which is essential to achieve competitiveness in increasingly globalised markets, had increased in our co-operatives by about 6% in real terms, which reduced the effect of labour on the results. This had not prevented the praiseworthy creation of 400 new jobs in the MONDRAGON co-operatives as a whole.
Eroski began the eighties with 100,000 consumer members, which was approximately 15% of all families in Euskadi. A significant figure without doubt.
Urkide was set up, a group made up of Danona, Egurko, Leioa and Zubiola, co-operatives located in the Azpeitia-Zumaia area.
25 years had passed since the start of the MONDRAGON co-operatives, a symbolic anniversary that invited us to take stock of what we had achieved. Caja Laboral had 114 branches and deposits totalling €383.56m (64bn pesetas), an increase over the year of €74.45m (12.4bn pesetas) which was 24% in relative terms.
The industrial co-operatives, however, with a 21% increase in sales, had posted a total turnover of €498.84m (83bn pesetas) and Eroski, with a 38% rise compared to the previous year, had posted close to €90m (15bn pesetas) in overall turnover. A new hypermarket was opened in Vitoria-Gasteiz, a
key event, which spurred Eroski to go in search of a new dimension.
There were ten Local Groups set up by the end of 1981: Debako in the Bajo Deba, Goilan in Goierri, Indarko in Mungia, Learko in LeaArtibai, Naeko in Navarra, Nerbión in Bilbao, Orbide in Donostia/San Sebastián, Urcoa in Alava, Urkide in the Urola Valley and Ularco in the Alto Deba, with more than 6,000 co-operators.
In these early years in which the Country was starting its political life it was said that the co-operative movement could not classify itself under any specific symbol, as that would go against its own constitution, although it would make sense to place it in the socialist environment in the widest and most noble sense of the word: socialisation of resources, and democratisation of management, ownership and knowledge.
Restraint, on the part of the workermembers as a whole, made it possible to reduce the effect of personnel costs on sales by one percentage point in 1982. This stand made it possible to consolidate jobs in the co-operatives, and even create 327 new jobs.
The following co-operatives joined the Group: Lenniz, now part of Fagor Electrodomésticos, Leunkor, also now part of Fagor Arrasate, Orkli and Ondoan. The technological capabilities of the co-operatives were also reinforced with intense collaboration with the applied research centre Ikerlan.
The maturity reached by MONDRAGON’s industrial co-operatives in terms of exports was clear from the fact that foreign trade now accounted for close to €144m (24bn pesetas), which was 28% of total turnover.
Eroski posted an 18% increase over the previous year and its sales were in excess of €135.82m (22.6bn pesetas).
The food and agriculture co-operative Behi-Alde, located in the Olaeta-Aramaiona area of the province of Alava, joined the Group.
At the end of the year Caja Laboral celebrated its 25th anniversary. If in the early years it was Caja Laboral which received support from the co-operatives, it was now the co-operatives who were being supported by a credit co-operative, set up at the right time, committed to the consolidation of the Group.
The industrial co-operatives posted a total turnover in excess of €727.22m (121bn pesetas) and the highest level of export activity was recorded by companies operating in the capital goods and intermediate goods sectors. Job creation has been a constant objective for Eroski and, with 168 new jobs the co-operative had a total of 1,246 worker-members by the end of the year. The co-operative was also awarded the research prize for consumer affairs which was given annually by the National Consumer Institute. The following worker co-operatives joined the Group: Artxa, Etorki, Fagor Clima (today part of Fagor Electrodomésticos), Leroa (now in turn part of Danona), and Matriplast.
On 1st March the co-operatives’ Group Council was set up, which was the historical embryo of Mondragón Corporación Cooperativa, what is now MONDRAGON.
The benefits funded by the Distribution System increased significantly compared to previous years. Health care stood out as the first benefit to exceed €6m in payouts a year. Over the last five years, the number of machines with numerical control manufactured by the Debako Group had gone from 5% to more than 40%. It was clear that the decline in mechanical components in favour of electronics was one of the causes of the crisis in traditional machine tool sectors.
Barrenetxe now had 80,000 m2 of polytunnel greenhouses, of which 50,000 were in the Markina area. Urssa, for its part, started work on building the support structure for two 170-tonne bridge cranes for Hidroeléctrica Española. Eroski posted sales in excess of €180m, which was 14% up on the previous year.
On 1st January Spain became a member of the European Economic Community, the result of negotiations started back in 1962.
The gradual operational consolidation of the Group Council had enabled basic elements like the remuneration of labour and capital to be updated, new forms of solidarity between co-operatives to be established and solutions to be found to reduce the problem of unemployment.Although the overall wage ratio was 1 to 4.5, the co-operatives’ payment scale based on the structural rate had remained for 30 years at 1 to 3. At this stage of the MONDRAGON Experience, Peter Cook set out the keys to its success in sequence: – A deep-rooted industrial tradition in the area. –A group of young idealists. – Real social concern in the Alto Deba. – Two continuous decades of a policy of economic development.– Father José María Arizmendiarrieta, as the catalyst of the process.
At the 1st Congress of the Mondragón Co-operative Group the Basic Principles of the Co-operative Experience were approved together with the bases for setting up the Inter-co-operative Solidarity Fund, designed as a new co-operation experience aimed at promoting job creation through the funding of co-operative development.
748 new jobs were created over the year which took the total workforce to 18,262 worker-members. It is worth stressing that this growth took place without damaging productivity, which increased by almost 4%. Total sales came to more than €1bn in absolute terms and exports rose by 8.8% in relative terms, totalling €213.96m (35.7bn pesetas).
Eroski opened five new stores in its chain in Bilbao, Vitoria-Gasteiz, Leioa and Orduña. There were also 176 stores in the Erosle chain. This co-operative also focused a lot on consumer information during the year with the publication of the Eroski magazine and Eroskide.
Total sales for the Corporation’s co-operatives exceeded €1.2bn for the first time, with exports totalling more than €240m. It is worth mentioning that Ikerlan was taking part in a number of international projects involving cutting-edge technologies: the Comet, Sprint and Esprit community programmes.
The Ideko Research and Development Centre was set up, with the most advanced computer equipment and at a total cost of €1.6m.
Fagor’s General Assembly approved the integration of Fabrelec (today Edesa) in the Group; whilst Danobat and Soraluce together won the biggest export order to date in the machine tool sector. It was for an 80 metre long flexible manufacturing line worth a total of €9.38m for the Czech firm Agrocet. The co-operative OnaPres was also to supply East Germany with two hydraulic presses worth €960,000. Orkli started to produce electricallyoperated valves for the small domestic appliance sector and manufacturers of semi-industrial distribution machines.
The creation of the European Single Market, with the gradual disappearance of tariff barriers, was a great challenge for our co-operatives which had to adapt to the size and upgrade in technology required by the new rules of the game.
Lagun Aro’s General Assembly eliminated the Marriage Allowance, one of the most traditional benefits in our co-operatives. The social role of women meant that this historic benefit had become an anachronism that was difficult to justify. Fabrelec (today Edesa) became a part of Fagor, increasing its production and sales potential, which took the overall sales in the domestic appliance area to €313.85m, of which €96.71m were attributable to Fabrelec. Eroski added a new hypermarket in Berango (Bizkaia), a supermarket in Arrasate/Mondragón, an urban supermarket in Basauri, two specialist domestic appliance stores in Bilbao and Legazpi and a travel agency in Algorta to its chain.
The MONDRAGON Corporation’s total assets were close to €3.97bn (660bn pesetas) and equity was already in excess of €1.2bn. At 31st December, Lagun Aro was providing health care and benefits to 19,967 members and 46,616 family beneficiaries.
Fagor Arrasate won the biggest order in the history of the machine tool sector, more than €20m for the manufacture of four automated stamping systems for Volkswagen Seat. The proposal to take over Victorio Luzuriaga, approved first of all by the Governing Councils, was submitted for final approval to the Annual General Meetings of Fagor Ederlan and the Fagor Group.
The co-operative Soraluce signed acontract with ITP for the manufacture of a flexible machining system for turbojet engine parts. ITP provided its aeronautical industry technology and Soraluce its knowhow in machining with flexible systems.
The III Co-operative Congress took place to approve the Organisational Project for the MCC (Mondragón Corporación Cooperativa) and the Basic Regulations for the Remuneration Policy. MONDRAGON was named by General Motors as Corporation of the Year in Europe for Service-Price Quality and, the same year, what is now LKS was set up as the continuation of Caja Laboral’s Business Division.
Irizar presented the Century, a new coach model in the design of which equal weight was given to comfort, safety and economy, with a reduction in fuel consumption.
Orona and Urssa, co-operatives in the construction sector, played a leading role in some of the most important buildings at the Universal Exhibition in Seville and in the facilities for the Barcelona Olympics. Fagor’s excellent image in the market was a determining factor in the company being selected as an official supplier for the Universal Exhibition in Seville, both to equip the Expo 92 City homes and for the catering equipment in the Spanish pavilion and in a number of the autonomous community pavilions.
In a difficult year, the Corporation’s co-operatives increased their overall number of jobs. By the end of 1992 1 out of every 25 euros of wealth created in the Basque Autonomous Community was coming from activities carried out by MONDRAGON.
The European Space Agency (ESA), selected the sensors manufactured by Copreci for use in the Ariane 5 rocket. Fagor Automation received the Gold Medal for Technological Innovation awarded by the Organising Committee of the International Engineering and Machine Tool Fair in Brno, in what was then Czechoslovakia, and is now the Czech Republic.
In spite of a slowdown in demand, the Retail Group’s sales rose by 26%, in the year in which the Valencia-based cooperative Consum joined the MCC.
In an interview given to the T.U.Lankide magazine, Iñaki López de Arriortua confessed to his fascination with the
MONDRAGON Co-operative Experience.
In a year so negative for the economy, especially for industry, the Corporation performed satisfactorily. The sales of the Industrial Group and the distribution Group together accounted for €2.55bn, with exports totalling €371.47m.
The industrial employment generated by the Corporation’s co-operatives in the Basque Autonomous Community was close to 7% and more than 15% in the province of Gipuzkoa, which meant that one out of every seven workers in the industrial sector in the province was working for an MCC company.
Ikerlan took part in a new Eureka project and the Orbea co-operative supplied the Euskadi Cycling Foundation with racing bikes.
With the signing of a collaboration agreement between Lagun Aro and the Basque Health Service Osakidetza, it was now possible for Lagun Aro’s members and beneficiaries to be attended to in the public network’s hospitals.
The Max Center in Barakaldo was the first to open in this commercial-property project.
The V Co-operative Congress, held in July, approved the Basic Regulations on the Company Structure of the Grassroots Co-operatives. Caja Laboral’s new strategic plan included support for the MCC corporate model, a policy of diversification in terms of the co-operatives’ financial suppliers and the optimisation of the quality of their services.
Irizar’s Century was already on the road in Great Britain. A lot of investment had been required to adapt the coaches to driving on the left, which is what they do in the United Kingdom and Ireland. A line, weighing 50 tonnes, to automatically manufacture fridge doors for General Electric in the United States was delivered by air and really put Fagor Arrasate’s logistics capabilities to the test.
Eroski celebrated its 25th anniversary with a large programme of activities and cultural events. The Valle Real shopping centre was opened in Camargo, Santander, with different business areas occupying a total retail floor space of 40,000 m2.
The creation of 1,960 new jobs in the Corporation’s co-operatives as a whole was one of the most gratifying achievements in a year in which there was spectacular export growth in the capital goods sector. Danobat made sales worth €18m to Meizhov and Norinco in the Peoples’ Republic of China. Also in China, Fagor Arrasate supplied Jianghui with the biggest mechanical press built in Spain.
The setting up of MTC, dedicated to the research and development of products manufactured with thermoplastics, at a cost of €3.6m, was a further step in the consolidation of the policy to strengthen the cooperatives in terms of technology.
The Irizar co-operative was awarded the Prince Felipe Prize for professional excellence in the design category and the Coach of the Year Award in Spain. In the construction sector, Urssa’s participation in the building of the metal structure for the Guggenheim Museum in Bilbao designed by Frank Gehry and in the work on the Bilbao Metro stood out. Fagor Electrodomésticos opened a refrigerator plant in Mohamedia in Morocco.
Twenty years had passed since Father Arizmendiarrieta passed away and forty since the start of the Co-operative Experience. “The best tribute we can dedicate to Father José María is to work as a Group” said an article in T.U. Lankide, something which was still applicable and still had meaning.
The promotion of a continuous and quantitatively important investment policy, led to dynamic growth in employment which by the end of the year totalled more than 30,000 jobs. The insurance and leasing activities linked to the Financial Group had now come of age and their combined results were, for the first time, in excess of €6m, well above the forecasts.
It is worth highlighting the participation of Urssa in a number of important projects, amongst which the metal structure for the Guggenheim Museum in Bilbao and two viaducts in Baix Llobregat stood out; together with international projects like supplying the metal structure for the Luo Huang power station in China, worth €7.8m.
On 14th April, coinciding with the anniversary of the setting up of Ulgor, the first co-operative, the MONDRAGON server was created on the Internet. This server offered visitors extensive information about the Corporation and about the unique characteristics of the Co-operative Experience (www.mcc.es).
MCC Desarrollo was formally set up as a corporate platform, with both the Basque Government and the MCC taking a holding, aimed at funding and developing industrial co-operative projects, by taking a temporary stake in their capital. The Household Division, in which Fagor Electrodomésticos was the biggest firm, posted sales of more than €600m, which was the mythical figure of 100bn pesetas. Enyca, a company specialising in telecommunications based in theCantabria region joined the Group. Fagor Ederlan improved its production capacity with the installation of two new aluminium die-casting cells, of 1,800 and 2,500 tonnes respectively. Fagor Automation strengthened its international presence by opening new subsidiaries in United States.
At the end of the year, in the Basque economy as whole MONDRAGON accounted for: 3.1% of employment, 4.5% of GDP and 9.3% of exports. This meant that out of every €100 of wealth generated in Euskadi, €4.5 came from the activities of the Corporation’s firms.
Consonni, a company based in the province of Bizkaia joined the Group, as part of the Components Division, together with Domusa, from Gipuzkoa, a manufacturer of individual boilers for homes. The co-operative Ecotècnia, a company producing wind turbines, wind mills, became the first Catalan enterprise to join MONDRAGON. 1998 was an excellent year for Irizar as they opened their new plant in Ormaiztegi and increased sales by 52%. This was an increase similar to that posted b y the Danobat Group which had the best year in its history. It is interesting to note that the first machine was sold for the Japanese aeronautical sector. It was also the first year of operation for Mondragon Unibertsitatea, a cooperative university set up in 1997 through the association of three educational co-operatives, Mondragon Goi Eskola Politeknikoa Jose Mª Arizmendiarrieta S. Coop., ETEO S. Coop. (currently MU Enpresagintza S. Coop.) and Irakasle Eskola S. Coop. It had 2,400 students studying different levels and specialities and, this same year, the Co-operative University Institute, KUI, was set up at its heart.
The year was a clear example of the policy of support and co-operation for the development of the MCC cooperatives, which overall earmarked around €523m for investment. Caja Laboral surpassed another mythical figure: one trillion pesetas, or what amounts to the same, €6bn in terms of assets under administration, with a year-on-year increase of 12%.
The MCC’s total sales also passed the trillion barrier in pesetas (€6.27bn), a result in which the excellent performance of export sales stood out, in spite of the initial lethargy in the international markets. The takeover by Fagor Electrodomésticos and MCC Inversiones of the Polish firm Wrozamet, a local domestic appliance manufacture, stood out. It is also worth highlighting that the following firms all set up plants abroad: Batz in Brazil, Cikautxo in the Czech Republic, Maier in Great Britain and Irizar in Mexico. The Basque Foundation for Quality Euskalit also awarded Irizar the Gold Q; whilst Copreci and Fagor Electrónica were awarded the Silver Q. The EroskiGroup, which had signed a collaboration agreement with the Food Bank Foundation, handed over close to 300,000 kilos of products to this humanitarian organisation.
In the first year of the 21st century, MONDRAGON had 54,000 workers, assets under administration with Caja Laboral totalled €7bn, total sales came to €7bn and international sales, timidly started way back in 1966, accounted for 49% of industrial sales.
Irizar won the EFQM’s European Prize for Business Excellence. This was the icing on the cake to a period of nine years of uninterrupted success for the co-operative based in the province of Gipuzkoa. Bamesa awarded Fagor Arrasate a contract to manufacture and supply an important sheet metal cutting and processing line for its new service centre in Turkey (Bamesa Celik). The Bizkaiabased co-operative Elkar opened a new factory building in Larrondo and Fagor Ederlan opened, in Borja in the region of Aragon, a new factory to manufacture front suspensions. Likewise, continuing the policy of moving into new geographical areas and expanding its activities, the MCC, the ONCE and Gureak opened a Special Employment Centre in Guadalajara.
Faced with the widespread economic slowdown in the industrial sector, with a 1.2% drop in Spain, the MONDRAGON Industrial area achieved growth of 0.1% and continued to promote cooperative employment: 740 workers became co-operative members.
Investment set an historic record: €872m to increase and modernise production capacity, raise the level of internationalisation and consolidate the Corporation’s presence in activities related to new technologies. In the area of internationalisation Copreci moved into Italy with the takeover of Rampgas, Maier into Great Britain through Chromeco, Eika into the Czech Republic, Irizar, Coinma and Danona into India, and Copreci, Cikautxo
and Fagor Ederlan into Brazil.
Caja Laboral now had 300 branches and continued its expansion programme with 26 new offices, mainly in the regions of Castilla-León and Aragón.
January 2002 saw the euro come into force, the new European currency to replace the currencies in the Eurozone, which then consisted of 12 States of the European Union. The peseta with which the MONDRAGON Experience had started its development was now consigned to history.
The name euro had been officially adopted on 16th December 1995; it was introduced into the world financial markets, as a unit of account on 1st January 1999, replacing the previous European Currency Unit (ECU). The notes and coins came into circulation on 1st January. As a reminder and for accounting purposes: the exchange rate with the peseta had been set at 166.386 pesetas per euro. At the end of December, the members of the Lagun Aro mutual benefit organisation totalled 27,202 people, divided among 116 co-operatives, with a net annual increase of 1,252 people. During the year, €48.4 had been paid out in pensions due to Retirement, Widowhood and Invalidity, and there were a total of 6,167 pensioners at the end of year. All these benefits were guaranteed by an Equity Fund, which at the end of the year totalled €2.55bn.
The strong appreciation of the euro compared to the dollar had its effect on MONDRAGON’s international sales, which fell slightly over total sales: export sales and those from production plants at subsidiaries abroad accounted for €2.15bn.
Caja Laboral made progress in the implementation of the client-company Management Model, with new branches and combined offices, taking the total to 336, whilst its client base had reached 1,039,000. As for Lagun Aro, there were a total of 28,204 members, 52,835 beneficiaries and 6,523 pensioners.
The Eroski Group continued to grow with new stores including the hypermarket which was the driving force behind the Boulevard hopping Centre in Vitoria-Gasteiz. The second issue of “Eroski Financial Contributions”, to the value of €70m, funded the increase of the stake in Mercat. In the retail sector the Valencia-based cooperative Consum left the Group.
Their Royal Highnesses King Juan Carlos and Queen Sofia visited the MONDRAGON co-operatives on 9th December. Received by the Basque Prime Minister, Juan José Ibarretxe, the President of the MCC General Council, Jesús Catania, and other authorities, they proceeded to place the foundation stone for the Garaia Innovation Park, and to inaugurate in Garagarza the new Fagor Electrodomésticos facilities.
The Annual General Meeting of Fagor Electrodomésticos approved on 25th March, with the favourable vote of 83% of members (2,045), the 100% takeover of Brandt, a French domestic appliance firm of a similar size to Fagor. This was a decision aimed at strengthening its future development. Fagor Arrasate, a manufacturer of presses, systems and production engineering, won an order worth €13m from the Argentine company MB Ciganotto. The following firms were turned into co-operatives: the Gipuzkoabased Becker, a manufacturer of electric conductors; and the Vitoriabased Loramendi, a manufacturer of machinery for casting and assembly. As the result of a decision of the Basque Government, the Lagun Aro health care system entered a phase of abolition. In terms of prizes and awards, Fagor Industrial and Fagor Minidomésticos were awarded the Gold Q by Euskalit.
It was a very positive year for MONDRAGON with an increase in the workforce of more than 7,500 people and sales up more than 13%, together with €866m of investment, mainly in the industrial sector.
Lagun Aro had a total of 29,538 members, in 120 co-operatives, with an increase of 299 people. There were 7,303 pensioners, 419 more than the previous year. Investment totalling €298m enabled the Retail Group to open 140 new stores, including 5 hypermarkets, 7 petrol stations, 49 branches of Eroski Viajes, 8 leisure and sports outlets and 49 perfume stores. The firm commitment to quality in product and process management was clear from the 108 IS0-9000 certifications and 42 IS0-14000 environmental quality certifications and EFQM assessments that the MONDRAGON co-operatives held. By way of example, Fagor Electrodomésticos’ Comfort Business received the Silver Q from Euskalit.
It was an especially significant year, historically speaking, for Fagor, and for MONDRAGON as a whole, with the 50th anniversary of the creation of Ulgor, the Corporation’s industrial embryo and the starting point for a Co-operative Experience, which fifty years on had become an international point of reference. And all this in what was an excellent year in all aspects.
The favourable performance of the markets led to a considerable improvement in financial activity. Caja Laboral posted a 17.1% increase in profit before tax, with assets under administration rising by 11.8% and investment in customer loans up 23.2%.
Total sales for Eroski accounted for €6.5bn, with the opening of more than one hundred new stores occupying a retail floor space of 86,000 m2.
The international dimension was evident in MONDRAGON as a whole. 63% of turnover in Consumer Goods (€1.2bn) came from international sales; in Capital Goods they were up 20% and accounted for 60% of total turnover (€1.63bn).
The international economic crisis began to be apparent, in a year of two clearly different parts: a first half of economic prosperity and a second half in which a fall in demand began to show. In this economic climate, MONDRAGON’s sales rose by 12%.
It was clear that for the Retail Area the takeover of Caprabo was the most important milestone in the year. With this operation, Eroski increased its retail and service floor space by 30% (2.5m new customers). In addition to this, new stores were also opened, 53% more than the previous year.
In the Financial Area, Caja Laboral’s turnover continued to rise, with an 8.7% increase in equity, 8.8% in total assets under administration and 15.5% in loans. As far as Lagun Aro EPSV is concerned, new record figures were achieved in terms of the number of members (30,476) and pensioners (8,176).
In the Industrial Area, sales totalled €7.44bn, up 8.2%.
The MONDRAGON co-operatives tackled a tough, complicated year of international economic crisis, maintaining and focusing more on the characteristics of their co-operative nature, based on the solidarity and commitment of everyone in their capacity as members and workers; banking on innovation and internationalisation.
2008 will be recorded in Eroski’s history as the year in which the process to convert the whole Group into co-operatives was approved at an Extraordinary General Meeting. The public limited companies and those in which Eroski has a holding will be turned into co-operatives and the workers will become worker-members. Caja Laboral’s financial activity was also complicated by the worsening of the global crisis, but it still had a satisfactory year. MONDRAGON continued to focus on its worldwide presence, setting up factories of its own. This was also a basic tool for maintaining local employment: 8 new production plants were set up abroad, taking the total number to 73. The Industrial Area posted sales figures of €6.3m, of which 58.2% (€3.66bn) were from international sales, with not such a big drop (2.2% down on 2007).
The year was characterised by significant adjustment, structural and strategic measures, taken to improve the co-operatives’ competitiveness, tackle the complicated economic situation and, in turn, emerge stronger from the global crisis.
There was a very special element to this crisis in terms of the people affected in that a very high proportion of the members of the MONDRAGON cooperatives had joined over the last 10-12 years, and had never before lived through a crisis and, therefore, were now experiencing something that was new to most of them. At the end of December, the number of people affiliated to Lagun Aro EPSV totalled 30,757, 636 people less than the previous year.
Caja Laboral, a body set up in 1959 and therefore celebrating its 50th anniversary, performed modestly, with the assets on its balance sheet accounting for €21.2bn, with an annual increase of €405m. In the Industrial Area, the slowdown in demand had a big effect on construction, capital goods and consumer durables.
The MONDRAGON Corporation ended 2010 with profits of €178m, tripling those posted the previous year and back on the road to winning back industrial employment, with 1,378 more jobs. Total sales accounted for €13.9bn (+1.2%).
These results were mainly due to the effectiveness of the steps taken to allow companies to substantially improve their competitiveness; to the diversity of supply and an increasing presence in international markets; and to the firm commitment shown to innovation, which meant that 21.4% of the sales in the Industrial Area in 2010 were new products and services, that had not existed five years earlier. The Industrial Area posted sales totalling €5.7bn (+5.6%), with international sales accounting for 63%. There were now a total of 77 plants abroad, consolidating the Group’s presence in Europe and emerging countries like China, Brazil, India and Russia.
MONDRAGON continued its process of internationalisation, in a year in which sales in foreign markets were, once again, the driving force behind the industrial sector. In June, Orona started building work on its new facilities in Galarreta (Hernani) in which the company, university and research centre will work together in a common space to be known as Orona Ideo Innovation City.
On 28th September, the 650 delegates of the MONDRAGON Co-operative Congress unanimously approved the Socio-business Policy 2013-2016, which proposes to transform its business fabric to generate value-added employment that is preferably co-operative in nature. This is a challenge that will require significant changes: adjusting the size of businesses to the global market, orientation towards emerging markets, possible development of new strategic partnerships, reorganisation of activities with less potential for growth, and firm commitment to carrying out integrated corporate projects, among others.
The MONDRAGON Co-operative Experience continues its daily work to develop its project in a difficult but especially important year: the International Year of Co-operatives, which is a great opportunity for MONDRAGON to make its singular model known and show itself to the world as a co-operative, competitive, innovative, socio-business reality operating at the global level.
MONDRAGON is part of the UN advisory group for the International Year of Co-operatives. Dame Pauline Green, President of the International Cooperative Alliance set out in TU Lankide the goals for the year, “the proclamation of 2012 as International Year of Cooperatives is something very special and we mustn’t waste the opportunity. The cooperative network is made up of thousands of people and all those co-operatives will be more visible in 2012; it will be an important year for co-operatives taking decisions at the local, national and world levels. We have planned a strategy to make the co-operative movement and its essence more visible in the world. We must create a real movement, fill it with content and promote it. This is how we’ll try to diversify the world economy, and in short, try to promote our model. Co-operatives are the key to the world economy, and must expand all over the world”.
In a year starring the Fagor Electrodomésticos crisis, other more positive news had also occurred, such as the integration of Caja Laboral and Ipar Kutxa, becoming the new LABORAL Kutxa, one of the most solvent financial institutions of the State.
In the industrial sector, it is worth mentioning the progress of the Orona Ideo project, the Orona Innovation city in Hernani (Gipuzkoa); the events commemorating the 50th anniversary of the cooperatives Fagor Ederlan, Copreci and Batz; or the integration of the activities of Fagor Arrasate and Onapres to expand the range of solutions in the forming and processing of sheet metal.
Overall, 2014 was a satisfactory year for the group with a slightly lower level of sales than the previous year, but with a high level of investment while also managing to maintain and even create some jobs throughout the Group.
With regard to the section on the significant events of 2014, the efforts made by all the cooperatives in trying to relocate the members affected by the Fagor Electrodomesticos crisis must be emphasised. An unprecedented demonstration of solidarity that required the determined involvement of all the cooperatives and a work of coordination of many people, the result of which was that 90% of the 1,900 affected members found an employment solution.
From an institutional perspective, 2015 has been the prelude to the forthcoming Congress, and the year has seen a great deal of hard work done on the content of two of the proposals to be debated there: MONDRAGON of the future and Corporate business policy 2017/2020.
2015 has been a good year for the group, with significant advances made in both turnover and earnings. Furthermore, progress has continued to be made in responding to the needs of worker-members affected by structural unemployment in certain cooperatives. Special mention should be made accordingly of the Industry area, which over the course of the year has managed to create just over 1,200 new jobs.