More US unions are now running their own businesses

Updated
In this photo taken Oct. 18, 2012, people talk outside Mondragon cooperative headquarters, in Arrasate, Spain. Amid the recession that profoundly affects...
In this photo taken Oct. 18, 2012, people talk outside Mondragon cooperative headquarters, in Arrasate, Spain. Amid the recession that profoundly affects...
AP Photo/Alvaro Barrientos

A handful of American unions aren’t content to just negotiate with the boss—instead, they’re cutting the boss out of the equation entirely.

For example, the United Steelworkers union (USW) is starting a handful of co-ops across the rust belt in collaboration with the Basque Mondragon Corporation; a sprawling federation of cooperative businesses, in which all of the workers have an equal share in the company and get to vote to determine corporate governance. In Mondragon, company management in the federation is answerable to a democratically Governing Council and General Assembly consisting of all employees. Since 2009, USW has been working to import the cooperative network’s model of workplace democracy into some American pilot programs.

Amy Dean, a fellow with the Century Foundation, tracks the USW’s progress in a recent article for Yes! magazine. The steelworkers union, writes Dean, is currently “helping to launch the Pittsburgh Clean and Green Laundry Cooperative, a new industrial laundry.” Additionally, it is supporting the Cincinnati Union Cooperative Initiative in Ohio, which “has two projects in the pipeline: a railway manufacturing co-op and a cooperative for retrofitting buildings for energy efficiency.”

Meanwhile, another article in the same edition of Yes! charts the progress of New Era Windows, a window manufacturing company founded by members of the United Electrical, Radio and Machine Workers of America after their old workplace closed up shop. Those union workers took over the factory from their former employer, Republic Windows and Doors, and re-opened it as a co-op. The new company has yet to start making windows, but the uphill climb to profitability looks pretty steep.

“In spite of preparing a business plan and reaching out to social impact investors, the co-op has thus far been unable to attract venture capital,” writes article author Laura Flanders. “Even with the collateral of the equipment, the workers have been unable to win any loans. The $500,000 they were able to raise for the purchase came from a single source, The Working World.”

But if the USW and New Era Windows successfully demonstrate that the Mondragon model of workplace democracy can thrive in the United States, their efforts could provide a sort of North Star for the struggling American labor movement. Founding co-operatives is no substitute for fighting within existing workplaces, but it could supplement and augment those efforts.

More US unions are now running their own businesses

Updated