Ulma and Orona leave Mongragon and do so with a loud slam. The 4,550 members of these cooperatives have overwhelmingly supported leaving the corporation and embarking on solo paths from now on and leave the giant of Basque cooperativism touched and lame. With the departure of these two companies, the most important today in the industrial area, the group will lose 15% of its sales, 13% in jobs and 28% in results. It is a full-blown hole that plunges the corporation, the largest cooperative in the world but not so much anymore, into a major crisis that from now on it will have to rebuild.
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Specifically, the 1,750 members of Orona, meeting in Hernani, have decided to leave Mondragon by 72% votes. For its part, Ulma, which has brought together its 2,789 members from its nine divisions in Illunbe, the Donostia bullring, will leave the group with the support of 80.5% of the cooperative members. Ulma sources have indicated that the agreement backed by the partners means “agreeing to drop the Ulma cooperatives in Mondragon and the agreements derived from it. And at the same time, to instruct the Grupo Ulma Governing Council to try to promote future collaborations with Mondragon for the development of the cooperative movement and promote the necessary regulatory development so that the contributions made up to now to the funds managed by the Mondraon Foundation can be continue allocating to the development of the cooperative movement”.
“It is the members who determine with their vote the path that the cooperative follows. Today, the bodies of the Ulma cooperatives have received a clear mandate. We are part of the success model that the Basque cooperative model represents. And we will always defend and support their values. We believe that the best way to do it is to make Ulma a strong cooperative industrial group”, Lander Díaz de Gereñu, president of the Ulma Group, stated after the assembly. Regarding Mondragon, he has shown his “maximum willingness to work hand in hand in all those actions that benefit the success model that we all represent”.
For his part, Oier Lizarazu, president of Orona, has highlighted that this exit agreement “so important to guarantee the future of Orona and its contribution to the cooperative association movement has been reached after holding more than 80 informative sessions with a high participation level. Our objective is to continue increasing the number of members, thus promoting the Orona cooperative project, collaborating with the rest of the cooperatives, and providing social balance and employment in the Basque Country and the rest of the country”.
The assemblies of what is now known as the ‘coopexit’ have been held throughout the morning of this Friday in a climate of great expectation, and with many members who have arrived on buses, -by the way from Irizar, another of the cooperatives that They decided to break with the group – and some after traveling by plane from their respective places of work in different countries where these cooperatives are established.
The exit is the end, and at the same time the beginning, of an announced story. Both cooperatives tried to have their proposal to become “agreed cooperatives” unsuccessfully debated at the last Congress on November 15. In other words, “not being subject to the regulations approved by Congress, they do not participate in general in the cooperatives’ inter-cooperation and solidarity mechanisms and establish in an annual agreement the possible areas and commitments of collaboration with Mondragon”, according to reported the management of the corporation, which refused to address an issue of this entity in Congress without a prior “calm” debate, and relations became even more difficult than they already were. Days after the Congress, which was not attended by any representative of Ulma or Orona, both companies set a date for the exit assemblies.
For this reason, the decision that Ulma and Orona have taken this Friday was expected, despite the efforts that the corporation’s management has been making throughout this week to convince the cooperative members of these companies of the benefits of staying in Mondragon, in a turbulent period and with crossed accusations of which there was no precedent. The president, Iñigo Ucin, has lavished himself with statements in the TULankide magazine -published by the cooperative group- and in other media such as Basque public television, reiterating the importance of continuing “together” and that “the rupture does not benefit anyone ”, but, in view of the results, with little success. It must be borne in mind that the two wayward companies are at a peak in terms of results and expansion. It was easy to foresee that the partners would not turn their backs on a direction that has led them to be at the top of the ranking in their respective sectors. And although Mondragon’s argument is that they are at that point thanks to the corporation’s umbrella, the arguments in favor of starting independent trajectories have weighed more heavily, without being subject to the rules of the cooperative council and the solidarity systems by which all the Companies contribute 10% of their results to a fund that allows those who earn the most to avoid the fall of those who are experiencing difficulties. A mechanism that has worked successfully over the years except for the resounding bankruptcy of Fagor in 2013. Precisely Orona, one of the companies that is now saying goodbye to the group, was then one of the most belligerent cooperatives and critics of It was time to continue providing funds to the company, which had squandered many millions from the solidarity fund to try to reduce its debt, and finally one of those that blocked new injections of liquidity to the electrical appliance company that was dropped and entered into bankruptcy so that it would not drag down the rest of the group.
Message “in the key of illusion” from Mondragon
The Mondragon management has insisted all this week that, whatever happens in the assemblies, the group will continue to be strong. This same Friday, after learning about the setback of the decision and showing their “respect” for what was voted by the partners of both companies, the group’s management made sure that “the new horizon is focused, emphasizing the values of intercooperation and solidarity, signs of identity that have allowed their cooperatives, in a totally autonomous and sovereign way, to have been able to expand their business projects and have the solidarity of the whole in the case of going through adverse circumstances”. In addition, “a key message of hope was conveyed, supported by the positive evolution of its businesses, in the future projects that are currently being addressed and in the confidence that the cooperative model is adequate to face the challenges of markets and to build more cohesive and sustainable societies”.
But the truth is that both companies that are now breaking have a very important weight. Orona is the fifth European manufacturer of lifting systems or elevators and employs 5,507 people, of which 1,750 are cooperative members. Last year its turnover increased by 4.1% to reach 832 million. Its industrial network spans thirteen countries and wants to continue growing. In the last assembly, it set forecasts for 2030 in sales of 1,200 million and a workforce of 7,500 workers. As for Ulma, it has a turnover of around 900 million euros and employs 5,500 people, of which 2,789 are partners, with a presence in 81 countries, in a business dedicated to construction with various divisions that include, in addition to the construction proper, maintenance services, logistics, agriculture, architecture, packaging and capital goods. In other words, these are two companies of great economic and employment weight, but also of Mondragon’s image projection in the world.
The cooperative group is not the first, facing a rupture In the history of Mondragon there was another well-known internal discrepancy, now 14 years ago, in 2008, which led the assemblies of Irizar and Ampo partners to decide to go it alone . Ampo is now a global leader in high-alloy and stainless steel casting components and high-tech valves for oil and gas. In 2021, it billed 157.79 million and earned 6.8 million euros. For its part, Irizar, a leader in coach manufacturing and fully involved in electric vehicles, has a turnover of more than 620 million euros and has a presence on five continents.
This process did not lead to the departure of more cooperatives, and now they are also convinced that if there is a rupture, the Ulma and Orona cooperatives will be the last to flee. “This milestone reinforces the conviction in our values, and a feeling of unity and cohesion that has really impressed me,” Ucín pointed out a few days ago.
The truth is that this week many of the strongest cooperatives in the group, from Laboral Kutxa to Eroski, have come out in defense of the corporation’s values, assuming that there are more “leaks” in the group than waiting discounting what Orona and Ulma add up, this year it expects to exceed 12,000 million in sales and employs 80,100 people.
The Basque Government, meanwhile, has observed the entire crisis from the sidelines, asking for “respect” for the decision that the partners made this Friday, whatever it was, as the Minister of Economic Development and Competitiveness, Arantxa Tapia, said this morning. who was confident that “the cooperative spirit of that responsibility and solidarity will continue throughout the coming years.”