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Rebuilding links: Trade unions and cooperatives get together again

All over the world, trade unions and cooperatives are rediscovering each other and joining forces to save companies and jobs.

Analysis | 22 May 2014
GENEVA (ILO News) -- There was a time when the links were clear for all to see. As Pierre Laliberté, an economist with the ILO’s Bureau for Workers’ Activities (ACTRAV), points out, “The relationship between trade unions and cooperatives is as long as the history of trade unions. In fact, it is fair to say that the first associations of workers that emerged in Europe looked more like cooperatives than trade unions.”

But things have changed over the years. “Despite their common origins, joint history and common goals of fostering economic security and industrial democracy, we can say that in recent times genuine collaboration between trade unions and cooperatives has been rather limited,” says Laliberté.

However, it may be time for the two sides to rediscover each other, adds Laliberté. He maintains that workers and their organizations need to get a tangible sense that economic activity based on more ethical and democratic principles can be possible – and this, he says, is just what cooperatives can do.

Cooperative cases in point

There are some interesting initiatives underway in different parts of the world. In Brazil, for instance, the metalworkers’ union Sindicato dos Metalúrgicos do ABC (SMABC) successfully brought back Latin America’s largest industrial forge Conforja from bankruptcy more than 10years ago as a worker-owner business. It has built on this experience to help establish the new cooperative federation, Central de Cooperativas e Empreendimentos Solidários. In Paraguay, an important ceramics business making roof tiles has been rescued by its workers and relaunched as the cooperative Cerro Guy. There are similar examples in other countries like Uruguay and Argentina.

In Europe unions have also been actively engaged in such ventures. French trade unions have played a key role in several cases of business failure where the enterprise has been re-established under the SCOP (Sociétés coopératives et participatives) legal framework. For the printing company Hélio-Corbeil, for example, the creation of a SCOP has successfully saved around 80 jobs.

Textile firm Fontanille, based in the Auvergne region of France, tells a similar story. After being run for 150 years as a family business, it was successfully saved from failure through its transformation to a cooperative two years ago. The workers helped recapitalize the business by investing their redundancy payments.

From failure to a future

These cases of “phoenix” cooperatives demonstrate that, with appropriate leadership and a sound business plan, otherwise doomed enterprises can find a future. Nevertheless, these kinds of rescue missions face the daunting task of turning around businesses which have already failed. A more active, rather than simply reactive, approach by unions to the cooperative business model may be what is needed.

This certainly is what the United Steelworkers (USW) union in the United States and Canada has been exploring with the idea of the “union cooperative” hybrid model, developed in partnership with the Mondragon cooperative federation based in Spain’s Basque country.

“The union cooperative model adapts the Mondragon model to the United States by turning the social council into a union bargaining committee, combining the ownership of a cooperative with the accountability of collective bargaining,” says Rob Witherell of the USW.

The USW has been working hard in recent months to help launch a new Clean and Green Laundry Cooperative in the old industrial city of Pittsburgh. There is also work being undertaken in Cincinnati where a partnership of community organizations and union bodies is developing the Cincinnati Union Cooperative Initiative (CUCI).

“Workers engaging in collective bargaining with their employer may appear to be drastically different from and incompatible with workers cooperating as owners, but the underlying approach is the same -- workers supporting each other to improve their livelihood,” Rob Witherell explains.

Laliberté of ILO ACTRAV calls for both movements to look again at the complementary roles which they can each play. “Fortunately there is already a wealth of good practices out there to inform a proactive trade union agenda to engage with cooperatives,” he says. A role for ACTRAV’s work in this area will be to create awareness of those experiences and create platforms to share them.