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Mondragon’s Experience

Mondragón Corporación Cooperativa

Mondragón Corporación Cooperativa

An experience based in:ParticipationDemocracySolidarity

Known Worldwide forBussines SuccesHigh Social CommitmentRelevant Industrial GroupRestructuration’s Capacity

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Mondragon’s Experience

IndexIndex Introdution

History & Reality · 1st Stage· 2nd Stage· 3rd Stage· MCC today

The Co-operatives

The Groups

Co-operative’s Principles

Corporative’s Values

Share Capital

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Mondragon’s Experience

1.- History & Reality1.- History & Reality

1ª Stage 1956 -1980: CO-OPERATIVES’ BEGINING & FAST DEVELOPMENT

Education & Training is the seed of the Group Phase of Creation: Sales 30%

Working force 10%Profit 7.5% sales

Creation of coverage’s entities Credit Co-operative Caja Laboral Health Insurence & Welfare Lagun Aro Promoting Capacity División

Empresarial Research IKERLAN Directive & Cooperative Training OTALORA

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Mondragon’s Experience

1st SATEGE: Evolution of MCC between 1965-1980 Mill/Ptas

Years NºCoops Sales Export. Workforce Invstmt

1.965 14 1.708 0 4.211 580

1.970 40 7.059 786 8.743 992

1.975 65 19.694 2.347 13.808 2.851

1.980 94 69.064 13.576 17.733 4.844

% 12% 28% 88% 10% 15%

Associated Process Members of Caja Laboral Creation of the Grupo: Fagor y otros

Eroski

1.- History & Reality1.- History & Reality

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Mondragon’s Experience

2nd STAGE: THE 80’s. EUROPEAN UNION

Crisis & decitions taken

Suport through the Groups Self- financing Coverage measures & employment

administration

Constitution of the Congress and General Council

1.- History & Reality1.- History & Reality

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Mondragon’s Experience

3rd STAGE: The 90’s : GLOBALIZED MARKED

Strategical adjustment to: Give answer to the European market Sinergies Advantages Create bigger units Group the cooperatives

Creation of Mondragón Corporación Cooperativa Unit for Stategical Direction Divided by Sectors Maximun business and social efficiency:

New organization Creation of the Corporative Founds Promoting the Values

1.- History & Reality1.- History & Reality

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Mondragon’s Experience

Corporate StructureCorporate Structure

CONGRESS

Research, Training and Education Centres

FIN

AN

CIA

LG

RO

UP

DIS

TR

IBU

TIO

NG

RO

UP

INDUSTRIAL GROUPAutomotive

Components

Construction

Industrial Equipment

Household Goods

Engineering and Capital Goods

Machine Tools

GENERAL COUNCIL

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Mondragon’s Experience

Operations 2001(In millions of €)

Industrial Group Turnover3,428

Net Bank Investment5,163

Distribution Group Turnover4,634

PROVISIONAL DATA

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Mondragon’s Experience

MCC Personnel(at the end of 2001)

TOTAL JOBS59,827

Distribution Group30,436 Jobs

(%44)

(%51)

Corporate Activities648 Jobs (%1)

Financial Group2,344 Jobs (%4)

PROVISONAL DATAIndustrial Group

26,399 Jobs

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Mondragon’s Experience

Distribution of employment(at the end of 2001)

PROVISIONAL DATA

Basque Country29,556

48%

Other Spanish Communities25,306

42%

International5,826

10%

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Mondragon’s Experience

Central Departments

PRESIDENCYGENERAL COUNCIL

SocialDepartment

FinancialDepartment

TechnicalSecretariat

InternationalOperations

Innovationand Develop.

GeneralSecretariat

Managementand development

of Directives

SocialworkerRegime

Training andCooperativeDivulgation

CoordinationEducational

Area

EconomicAnalysis

Treasury

RiskManagement

StrategicPlanning

Managementof CorporateResources

Communicationand

Advertising

Model ofManagementDevelopment

TechnologyCenters

Coordination

LatinAmericaArea Manager

Asia AreaManager

CorporativeDelegations

ComercialPromotion &

Trading Comp.

BusinessPromotion

Innovation andTechnology

New Sectors

ATEGIPurchasing

ManagementCenter

Legal Advice

InstitutionalRelationships

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Mondragon’s Experience

MCC Worldwide

Production Plants (34)Corporate Representation (13)

Italy

DeutschlandFrance

Chec Repub. (4)

Argentina (4)

Thailand (1)

Iran

India

Maroc (2)

France (3)

Brasil (7)Brasil

Mexico (3)Mexico

Denmark

Poland (1)

China (2)China (3)

U.S.A.

U.K.

Thailand

U.K.(2)

India(2)

(2) Italy(2)

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Mondragon’s Experience

Value added generated by MCC

In millions of pesetas

1999 2000 Annual VariationHEADING

Amount % Distr. Amount % Distri. Amount %

Value added

Personnel costs

327,318

(159,969)

100.0

(48.9)

348,392

(180,179)

100.0

(51.7)

21,074

20,210

6.4

12.6

Internal Yield

Financial costs

167,349

(27,105)

51.1

(8.3)

168,213

(31,959)

48.3

(9.2)

864

4,854

0.5

17.9

Cash-Flow

Depreciations

140,244

(38,268)

42.8

(11.6)

136,254

(43,572)

39.1

(12.5)

(3,990)

5,304

(2.8)

13.9

Operating Profit

Transfer and other income

Lagun-Aro tech. Int. rate

101,976

(9,828)

(15,669)

31.2

(3.0)

(4.8)

92,682

(8,109)

(17,202)

26.6

(2.3)

(5.0)

(9,294)

(1,719)

1,533

(9.1)

(17.5)

9.8

Surplus on year 76,479 23.4 67,371 19.3 (9,108) (11.9)

SURPLUS IN M EUROS 460 23.4 405 19,3 (55) (11.9)

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Mondragon’s Experience

MCC in the Basque Country 1999

* Number of people** Of which 267,389 million pesetas are not purely industrial as they

correspond to the Energy and Water sector*** Without exports of energy products

Basque Country total MCC Total % s/totalHEADING

Total Industrial Total Industrial Total Industrial

G.D.P. 5,562,994 **2,018,986 249,555 121,598 4.5% 6.0%

Employment * 813,400 239,800 26,201 17,500 3.2% 7.3%

Tax 1,222,356 -- 28,265 -- 2.3% --

Exports 1,660,077 ***1,532,216 -- 177,530 10.7% 11.6%

In Millions of pesetas

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Mondragon’s Experience

Basic Functions

Business Policyand

Strategic Control

StrategicManagement

OperationalManagement

Stratetic Planning

Cooperative Congress- Standing Commitee

Divisions

Sectorial Subgroups

Business Units/Cooperatives

General Council

CorporateCentre

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Mondragon’s ExperienceAssets evolution Financial Group 1980-2001

1981 1986 1991 1996 2001

Equity Fund Lagun-Aro Administered Funds Caja Laboral

384

40

Millions of €

1,039

181

2,132

643

4,402

1,204

7,891

2,425

PROVISIONAL DATA

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Mondragon’s ExperienceIndustrial Group Sales evolution1980-2001

1981 1986 1991 1996 2001

National Sales International Sales

1,694

980

977

505

294

M of €

71,2% 72,2% 74,6% 55,7% 48,7%28,8%

27,8%

25,4%44,3%

51,3%

PROVISIONAL DATA

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Mondragon’s Experience

Industrial Group -Sales 2001

Automotive

IndustrialEquipment

Components

Construction

Investigation

MachineTools

Engineer. &Cap. Goods

HouseholdGoods

746 M€

386 M€

337 M€

469 M€

1,034 M€316 M€

176 M€

11 M€TOTAL SALES

3,475 M of €

%21,5

%11,1

%9,7

%13,5

%29,7

%9,1

%5,1

%0,3

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Mondragon’s ExperienceDistribution Group Sales evolution

1980-2001

1981 1986 1991 1996 2001

4,633

579

2,032

24098

M de €

PROVISIONAL DATA