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Spain's Astonishing Co-Op Takes On The World

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The Mondragon Corporacion is the world’s biggest co-op with 85,000 'worker-owners’, though the Basque group is better known for products such as Orbea bikes that won gold at the Beijing Olympics and sell for up to £11,000, or Fagur fridges, Brandt ovens, Eroski shops, or the coming electric City Car.

Anglo-Saxon elites might find its pay scale unsettling. Top brass in Mondragon’s mountain lair may not earn more than six times the lowliest cleaner. "In reality it is just three times after tax, but we don’t need much money to live here," said an ascetic Josu Ugarte Arregui, the global director.

The differential in big Western companies can be 400 times, and is getting worse. The top pay of FTSE 100 bosses has jumped from 124 times the minimum wage to 202 times over the last decade, according to the Hutton Review of Fair Pay.


Mondragon weathered the 2009 slump in machine tools, car components, and its other cyclical niches by putting 20pc of full staff leave for a year at 80pc pay, with names chosen by lottery. Some of its 256 co-ops froze pay, others took a 10pc cut.

The membership rule is that all new workers must put up €13,400 in share capital, which they can borrow from the group’s Caja Laboral, one of the few Spanish savings banks in robust health.

Profits are largely reinvested or sunk into research centres, though a chunk is spent on social projects. Worker dividends are paid into retirement accounts. The whole system is run by an elected Congress, known as "the supreme expression of sovereignty".


As chairman Jose Maria Aldecoa puts it, with a Churchillian twist: "the co-operative model is absolutely flawed, but it has shown itself the least flawed in a crisis of values and models".

Burn the heretics this will never do! This sounds like hell on earth, how can the top people survive on merely 6x salary?

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Good luck to them. I'm all for people making free choices about how they want to operate. The best way to reduce the earnings of "top bosses" is to compete them out of a job; if this model can do it then, as I say, good luck.

Not a very interesting model for a genuine entrepeneur of course, but most "top bosses" are nothing of the sort.

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  • 311 Brexit, House prices and Summer 2020

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      • down 5% +
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