April 2013, Week 1


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Thu, 4 Apr 2013 22:21:42 -0400
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Can Worker-Owners Make a Big Factory Run?

April 4, 2013
By Jane Slaughter 
Labor Notes (April 3, 2013)

How does a worker cooperative with 1,050 members function? It’s hard enough for worker ownership to succeed at any size, because any company that competes in a market is subject to the same cost-cutting rat race as a capitalist firm. Yet the TRADOC co-op—translation: Democratic Workers of the West—is thriving. 

Part 2 of a two-part series on the TRADOC workers' cooperative in Mexico. Part 1 is here.
A tire is not just a piece of rubber with a hole in it. I learned this when I visited the workers’ cooperative that makes Cooper tires in El Salto, Mexico. A tire is a sophisticated product that comes about through a chain of chemical processes, lots of machine pounding, and still the intervention of human hands.
A fervent inspection worker pointed out that every single tire is tested under road-like conditions: “If not, it could kill people,” he noted. And, he added practically, “keeping the tires safe saves our jobs.”
These workers went without jobs for three years during the strike that ultimately led to the founding of their co-op. They’ve been building tires as worker-owners since 2005, selling them in the U.S. and Mexico and now paying themselves the highest wage in the tire industry.
How does a worker cooperative with 1,050 members function? It’s hard enough for worker ownership to succeed at any size, because any company that competes in a market is subject to the same cost-cutting rat race as a capitalist firm. Workers are impelled to hammer themselves and cut their own pay or be driven out of business. And most workers here have just a middle-school education.
Yet the TRADOC co-op—translation: Democratic Workers of the West—is thriving. Enthusiastic worker-owners have modernized their plant, increasing productivity and quality through their skilled work. Those factors together with their admittedly low prices have made it possible for them to compete on the world market.
Reluctant Owners
The strikers of Continental Tire, 2002-2005, were reluctant owners. When they fought the closing of their plant by the German multinational, all along they just asked for the owners to reopen it. At the end, Continental gave up and offered to sell half the company to the workers and half to its former distributor, Llanti Systems.
“We said to Llanti Systems: ‘You buy the plant. Just hire us as workers and pay us our back pay,’” remembers Jesus Torres, who was then president of the striking union. “For us that would have been the biggest triumph, to reopen the plant and maintain our work.
“But they said, ‘No, no, we’re not crazy, we know what you guys are capable of. We’re interested in you as owners, not as employees.’
“So we said, ‘There’s no other way out? Well, we have to try it.’”
Of the 940 workers on the payroll when Continental closed the plant in December 2001, 587 remained. The rest, driven by hardship, had accepted their severance pay.
The first one to enter the plant as an owner, in February 2005, was Salvador “Chava” Hernandez, who’d been a stalwart maintaining the union’s guards at the struck factory’s gate. He had goose bumps.
“It was our plant,” he told me. “We had been three years with nothing.”
There was no light inside, so workers cleaned away cobwebs in the dark, bumping into machines and avoiding snakes and owls. “It was a cadaver when we went in,” Torres said.
Within five months, they had the machines running again and had built their first tire. “We all ran to get our picture taken with the first tire,” Hernandez said. “It was a truck tire. And many, many people worked on that tire, each doing a little adjustment.”
One problem the new co-op had at the beginning was too many workers on the payroll—but they weren’t about to lay anyone off. They also had a new brand name, Pneustone, which the public didn’t know.
And the aid that Continental pledged never came. The company had said it would sell the co-op raw materials, buy the plant’s production, and give technical advice for a year. None of these promises were kept. Continental said it could get the tires cheaper elsewhere.
“When the company signed the papers,” said Rosendo Castillo, who’s now on the co-op council, “they said, ‘Here’s the corpse.’”
For the first four years, the new company was in the red. The first tires were sold very cheap, at a loss, to Walmart.
Co-op leaders knew the key to survival was to obtain raw materials at a good price, something only a large company could guarantee, and that it would be much better if that company distributed tires in the U.S. So they sought a new, international partner.
In 2008 Cooper Tire, based in Findlay, Ohio, injected new capital; it now owns 58 percent of the Corporación de Occidente (COOCSA), or Western Corp., with the TRADOC cooperative owning 42 percent. Cooper has four members on the Administrative Council and TRADOC three; decisions can be made only if 75 percent agree, or 100 percent for important decisions such as investments or asset sales. In other words, all management decisions are made by agreement between the two entities.
Western Corp. buys raw materials from Cooper, and Cooper buys 95 percent of the factory’s output, most of it for sale in the U.S.
Ironically—since they had fought their own closing so hard—the TRADOC workers were the beneficiaries of a Cooper closing in Georgia, when they bought that plant’s machinery.
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