Mondragón closing some co-ops, others at risk of closure

[FrodosPet]

http://online.wsj.com/news/articles/SB10001424052702303290904579276551484127412

MONDRAGÓN, Spain—For decades, the giant network of industrial and retail cooperatives born in this small town was held up as an international model. Whenever one co-op got into trouble, the rest of the Mondragón Corporation would rescue it with cash or take on workers at risk of losing their jobs.

Then the unthinkable happened.

In October, home appliance maker Fagor Electrodomésticos, a global exporter and the U.S. market leader in pressure cookers, shut its factories after the other co-ops denied it a lifeline. That, in turn, has shaken the Mondragón network, the largest of its kind in the world, fraying the bonds among its 109 surviving co-ops and eroding confidence in the weaker ones. Many of its 80,000 employees now fear for their jobs in a country with 26% unemployment.

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Fagor's 1,800 workers in Spain have lost their jobs and access to savings they had plowed into the co-op. Tajo, a small co-op in the Mondragón network that makes car parts and components for household appliances, says it could face bankruptcy because Fagor bought much of its production. Creditors owed €2.5 billion by supermarket chain Eroski, the network's largest co-op, have told the management to retrench by selling or closing outlets.

[El_Johns]

1. K&R. Spain has been in an economic nightmare for years, a financial squeeze designed to

achieve just this result -- squeezing & consolidating capital.