by
Attorney Deborah Groban Olson
Executive Director, Center for Community Based Enterprise
and on behalf of the US Federation of Worker Co-ops Union Co-op
Committee
“Good Jobs, Green Jobs” Blue Green Alliance Conference
Detroit Marriott Hotel May 10 - 11, 2012
1
Organizing local economic
strength in global economy
 Unions, cooperatives, worker–owned & community-
based companies share human/community
empowerment values
 Worker owned companies
 More successful at surviving & thriving
 Innovate rather than laying off their workers owners
 Successful unionized examples
 Global economy raises new job-creation question & role
for unions
 Detroit Community Cooperative (DCC) – community
economy platform in Metro Detroit
Worker economic security strategies
 Labor unions
 Community- based enterprises
 Cooperatives
 Worker owned & controlled companies
Why so many terms?




Worker co-op
ESOP (employee stock ownership plan)
Employee-owned, company ; Worker-owned company
Community based enterprise
Community-based enterprise (CBE)
Definition
 Sustainable
 Locally rooted
 Intentionally structured to provide community
benefits; and
 Committed to paying living wages
Legal form irrelevant
Slows Bar BQ Courtyard
4
1940’s Detroit – union & co-op
folks – same people
• Studied working people’s economic problems together
• UAW Locals 22 & 174 loaned milk drivers funds to
start Twin Pines Dairy
• Twin Pines became Co-op Services (CS)
• CS worked w/ Unions creating
• Motor City Food Co-op with UAW Local 60
• Co-op Optical with many unions
Source:-Virginia Thornthwaite (2005)
Types of cooperatives
 Consumer (food, housing, electricity)
 Producer
(farmers)
 Worker
 Multi-stakeholder
Co-op values & principles
VALUES
 Self-help
 Self-responsibility
 Democracy
 Equality
 Equity
 Solidarity
 Honesty
 Openness
 Social Responsibility
 Caring for Others
PRINCIPLES
 Voluntary, Open
Membership
 Democratic Member
Control
 Member Economic
Participation
 Autonomy & Independence
 Education, Training & Info
 Cooperation among co-ops
 Concern for Community
30,000 U.S. Cooperatives
73,000 Places of Business
Economic Impact
of U.S. Co-ops:
Assets
$ 3 Trillion
Revenues
$ 654 Billion
Wages & Benefits
$ 75 Billion
2 Million Jobs
857,000 direct
Types of worker ownership
 Traditional Corporate & LLC forms
 Worker Cooperatives
 Employee Stock Ownership Plans (ESOP)
Employee owned companies are 3 to 4 times less
likely to lay off or lose workers
From 2010 General Social Survey – table used with permission from National Center for worker Ownership worker
Ownership Report p. 6 March-April 2012
Ohio manufacturing job loss
2000-2008
Ohio ESOP Survey – Kent State University
 29% overall
 1% worker Owned Network
 Reasons:
 Far less likely to outsource
 Have avg. 2x higher rates of capital investment
 More worker participation in making business decisions
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Employee ownership trends
From NCEO analysis of US DOL data -used with permission from National Center for worker Ownership (NECO )worker Ownership
Report p. 7 March-April 2012
Mondragon Cooperative
Corporation “Humanity at Work”
Participative worker ownership =
successful job creation & retention
 Mondragon: 50 years from 0 to 100,000 jobs and assets of
38 billion euro
 Emilia Romagna – 8,000 worker coops + family businesses =
7% of Italy’s population; 12% of exports, 30% of patents
 EBO – diversification through active worker ownership –
from mining equipment to recycling equipment & medical
devices – tripled business in 5 years
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Ongoing support & resource sharing
creates more successful start- ups
 Well funded & staffed support centers provide ongoing
assistance with accounting, legal, business plans
 Much more support than US incubators
 Saiolan Start-up center at Mondragon University
 Started in 1980’s
 89% of its start-ups are still in business 5 years later
 83% are still in business 10 years later
 US system – 1 out of 5 start-ups is alive in 5 years
 Detroit Community Co-ops (DCC) - following Mondragon
model – users own support system
15
Worker ownership makes people
healthier & happier, not just wealthier
David Erdal’s 1999 PhD Thesis at St. Andrews “The Psychology of Sharing”
provides preliminary evidence (not conclusive proof) that those living in a
community with a large percentage of worker cooperatives are healthier, better
educated, have less crime and more social participation than people in a
comparable Italian town with fewer worker cooperatives.
Caption: the graph shows the differences on the following
measures:
1.20
1.00
Crime:
victimisation (C1), policing (C2), confidence (C3), feeling
of security (C4), domestic violence (C5)
Co-operative town better
0.80
Education:
level attained (E1), age leaving school (E2), truancy
(E3), expected truancy (E4), post-school training (E5), perceived
importance of education (E6)
0.60
Health:
physical health (H1), emotional health (H2) (also
measured: mortality)
0.40
Social
Environment: perceived gap between rich and poor (SE1),
helpfulness of authorities (SE2), supportiveness of social
networks (SE3)
0.20
0.00
-0.20
-0.40
C
1
C
2
C
3
C
4
C
5
E
1
E
2
E
3
E
4
E
5
E
6
H
1
H
2
S
E
1
S
E
2
S
E
3
S
P
Social
Participation: membership of clubs (SP) (also
measured: voting, blood donation)
Attorney Deborah Groban Olson
Co-operative
town worse
www.esoplaw.com
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Worker owned companies
perform better
ESOP companies compared to comparables or
themselves pre-ESOP




Increase sales growth 2.4% faster
Increased employment 2.3% per year
Increased sales per worker 2.4%
Continue in operation longer
Source: 2001 Study by Dr. Douglas L. Kruse and Dr. Joseph R. Blasi, School of Management and Labor
Relations at Rutgers University
Attorney Deborah Groban Olson
www.esoplaw.com
17
Ongoing, successful, unionized worker
owned company examples
 Homeland Grocery Stores – UFCW
 Maryland Brush Company – USW
UFCW & HAC partnership to increase
worker owned & unionized stores
 AWG bought stores in 2002 bankruptcy
 2011 HAC created to sell 100% ownership of s 76 stores +
expansion stores to workers thru ESOP
 Employer sought to terminate UFCW’s defined benefit plan
 UFCW negotiated:
 New defined benefit plan
 ESOP participation for union members
 Union seats on board of directors
 Collective bargaining agreement covering any new stores
Maryland Brush Company (MBC)
•Started in 1851
•Part of PPG
Industries since
1904
•1990 became
100% worker
owned USW
ESOP
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Maryland Brush co-op values
 Sees itself as long term community asset
 Must retain competitive edge to continue
 Maintains cash reserves
 Reinvests in company
 Balances risk- protecting investment of older
workers & jobs needs of younger worker
 Involve workers in all major decisions
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Maryland Brush: co-op governance
structure in a 100% S corporation ESOP
4 internal board members
 MBC president
 Local union president
 1 selected by salary group
 1 selected by wage group
3 external board members
 1 appointed by USW district director
 1 appointed by MBC president
 1 nominated by USW, affirmed by MBC
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Mature markets problem – Maryland
Brush finds solar product
 Specializes in custom designed power brushes for:
 Steel industry
 Nonferrous metals industry
 Truck Tire retread industry
 Industrial distributor market
 Special machinery market
 Welding industry
 By 2007 - Maryland Brush Company knew it needed to
diversify outside of the brush industry
 Finds new solar energy product
23
2010 MBC bought Photensity
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Now called “Skylouver”
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Union role in MBC product diversification

Maryland Brush needed funding to build its
“proof of concept” array - $750,000
 Union helped Maryland Brush get funding
from the State of Maryland and the US
Department of Energy
U.S. union density
Percentage of US
workforce Unionized
as of 2010 ( Source = Wikipedia)
▪ Total: 12.4%
▪ Public sector: 36.8%
▪ Private sector: 7.6%
21st century challenges
create union role in job creation
 Job scarcity
 Unions
 Not in job-creation business
 Could use assets to


Create union members
Help worker ownership
 Increase political capital
 Benefit from focus on community-based businesses
Challenges for worker co-ops
 Mostly small
 Investment capital hard to find
 Need political clout to get resources
 Need managers with
 business sophistication
 participatory values & skills
 If co-ops want union involvement, they need to find
ways to generate union membership
Proposal: co-op union members
 Continue to organize & represent collective bargaining
members
 Create a new class of “Co-op Union Members”
 Provide different services for these members:
 Access to business experts
 Pooled resources like insurance & purchasing co-ops
 Lobbying
 Connections to labor friendly inventors & entrepreneurs
 Become bidders for public & private outsourced work
Mondragon in Detroit
•Center for Community Based Enterprise (C2BE)
teaches co-op & community based enterprise best practices
•Ingenuity US, L3C
seeks products & business opportunities
focused on rich local technical knowledge & resources
•Detroit Community Cooperative (DCC)
•collaborative platform for individuals, businesses & nonprofits
•to implement cooperative practices for mutual self-help
•incubate worker owned companies
•business members own their support system
Detroit Community Cooperative (DCC)
“Declaration of Interdependence”
• Statement of Values
• Based on Mondragon & International Co-op
Association principles
• Seeking declarers & members
• Attached
Detroit Community Co-op Mission
• Encourage, enable & educate about
collaborative action as a way to build a
healthy, sustainable, and inclusive local
economy;
• Meet members’ needs - providing
quality products & services at reduced
prices
Detroit Community Co-op Membership
•Members are businesses, organizations and individuals
•Benefits: members provide each other quality business &
consumer products, services & information
• at a discount
• thru barter, work exchange or co-op hours
•1 vote/ person
• find collaborators in business/job creation
•Obligations:
•volunteer 4 hrs/month to help co-op or other members
• pay dues
• business members share 2% of co-op generated revenue
Detroit Community Co-op (DCC)
• Founding Members
Better Detroit Youth Movement, Brightmoor Alliance, Center for
Community Based Enterprise, Church of the Messiah, City Mission,
Congressman Hansen Clarke, ConnectPay, Creative Community Pathways,
Detroit Black Pages Newspaper, Fresh Corner Café, Highland Park
Business Association, IngenuityUS,l3c, Michigan Alliance of TimeBanks,
Michigan Urban Farming Initiative, Motor City Blight Busters, New
Liberty Baptist Church, Pioneer Building, Project L.I.V.E., Sustainable
Community Farms, Williams Acosta, PLLC, Gregory Hicks, Richard Hillier,
Jacquise Purifoy, Esq., Salam Rida, Tom Stephens, Maria Martin-Thomas
• Seeking New Members
DCC Membership
•Applications available
•Next DCC potluck
-June 6, 2012, 6:00 p.m. at Motor City
Java House, 17336 Lahser, Detroit 48219
– All Welcome
• Seeking opportunity to present to your
organization
• Contact (313) 331-7821, info@c2be.org or
visit www.c2be.org
Unity builds local economic strength
 Unions & worker owned companies are primary
protection for workers
 Good models of unionized worker ownership exist
 Shared resources can scale up community economy
 Technical support & cooperative platform, MCC, Italy,
Cleveland, Detroit Community Co-op
 Existing union technical and political assets can help
 Unions can create new “co-op” memberships
 Source for new union members
 Inventors are potential allies in job protection
 Workers & unions need to be proactive in job creation
For more information contact
www.esoplaw.com
dgo@esoplaw.com
(313) 331-7821
(313) 300-6517
Center for Community
Based Enterprise, Inc.
(C2BE)
2795 E. Grand Blvd., Detroit, MI 48211
(313) 331-7821
www.c2be.org
info@c2be.org
dgolson@c2be.org
www.esoplaw.com
38
Additional Resources
www.usworker.coop – US Federation of Worker Co-ops
http://unioncoops.wikispaces.com/ - USFWC Union Co-op
Committee
www.ica.coop – International Cooperative Alliance
www.community-wealth.org – Democracy Collaborative
www.ncba.coop – National Cooperative Business Association
www.nceo.org – National Center for Employee Ownership
www.mcc.es – Mondragon Cooperative Corporation
www.circlepinescenter.org- Circle Pines Center