1. 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

2. 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 Organizing local economic strength in global economy

3. 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

4. Community-based enterprise (CBE) Definition Sustainable Locally rooted Intentionally structured to provide community benefits; and Committed to paying living wages Legal form irrelevant 4 Slows Bar BQ Courtyard

5. 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)

6. Types of cooperatives Consumer (food, housing, electricity) Producer (farmers) Worker Multi-stakeholder

7. 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

8. 30,000 U.S. Cooperatives 73,000 Places of Business Assets $ 3 Trillion Revenues $ 654 Billion Economic Impact of U.S. Co-ops: Wages & Benefits $ 75 Billion 2 Million Jobs 857,000 direct

9. Types of worker ownership Traditional Corporate & LLC forms Worker Cooperatives Employee Stock Ownership Plans (ESOP)

10. 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

11. 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 11

12. 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

13. Mondragon Cooperative Corporation “Humanity at Work”

14. 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 14

15. 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

16. Worker ownership makes people healthier & happier, not just wealthier Attorney Deborah Groban Olson www.esoplaw.com 16 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: l Crime: victimisation (C1), policing (C2), confidence (C3), feeling of security (C4), domestic violence (C5) l Education: level attained (E1), age leaving school (E2), truancy (E3), expected truancy (E4), post-school training (E5), perceived importance of education (E6) l Health: physical health (H1), emotional health (H2) (also measured: mortality) l Social Environment: perceived gap between rich and poor (SE1), helpfulness of authorities (SE2), supportiveness of social networks (SE3) l Social Participation: membership of clubs (SP) (also measured: voting, blood donation)

17. Worker owned companies perform better Attorney Deborah Groban Olson www.esoplaw.com 17 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

18. Ongoing, successful, unionized worker owned company examples Homeland Grocery Stores – UFCW Maryland Brush Company – USW

19. 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 UFCW & HAC partnership to increase worker owned & unionized stores

20. Maryland Brush Company (MBC) 20 Started in 1851 Part of PPG Industries since 1904 1990 became 100% worker owned USW ESOP

21. 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 21

22. 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 22

23. 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

24. 2010 MBC bought Photensity 24

25. Now called “Skylouver” 25

26. 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

27. 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%

28. 21 st 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

29. 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

30. 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

31. 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 & non- profits to implement cooperative practices for mutual self-help incubate worker owned companies business members own their support system

32. Detroit Community Cooperative (DCC) “Declaration of Interdependence” Statement of Values Based on Mondragon & International Co-op Association principles Seeking declarers & members Attached

33. 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

34. 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 creatio n Obligations: volunteer 4 hrs/month to help co-op or other members pay dues business members share 2% of co-op generated revenue

35. 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

36. 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.orginfo@c2be.orgwww.c2be.org

37. 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

38. For more information contact www.esoplaw.com 38 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

39. Additional Resources www.usworker.coopwww.usworker.coop – US Federation of Worker Co-ops http://unioncoops.wikispaces.com/http://unioncoops.wikispaces.com/ - USFWC Union Co-op Committee www.ica.coopwww.ica.coop – International Cooperative Alliance www.community-wealth.orgwww.community-wealth.org – Democracy Collaborative www.ncba.coopwww.ncba.coop – National Cooperative Business Association www.nceo.orgwww.nceo.org – National Center for Employee Ownership www.mcc.eswww.mcc.es – Mondragon Cooperative Corporation www.circlepinescenter.org-www.circlepinescenter.org- Circle Pines Center