Fagor Household Appliances (hereafter FagorE) has been a tough blow, seen from many points of view, not just in the Upper Order. For those who followed the subject closely, in the end what had to happen has been done and for those who went further the problem could not be a failure, because it is Fagor Fagor. But defeat has come.
Now, in a few months you'll see what's going to happen to foreign and local companies. But surely the consequences for foreign workers and for the large network of suppliers are going to be harsh, the loss of thousands of jobs is on the table. In the meantime, the views of what has happened are coming down quickly in search of answers, in order to debug responsibilities and also in order not to fall into the same mistakes in the future. Vertices are numerous and sharp, painful, but you have to look for them.
There are many contradictory sensations in Arrasate. In the midst of the hardness of the situation, the other cooperatives are not very happy because the background was touched, because the situation is very distant, because in the name of solidarity FagorE has absorbed a lot of money in recent years, because they were adopting stale solutions and because it was best to reach the bull by horns before very late. This has now been done. A view of the crisis as an opportunity.
Why has it happened? The defeat was mainly attributed to FagorE’s management, which Brandt purchased in 2005. He had purchased a bigger rival than him to be able to compete with the biggest in Europe. The one who led the operation was Txema Gisasola, current president of the General Council of the Mondragon Corporation.
But some people think that FagorE did well and had no other way than the growth promised by competition, otherwise there was no future. And as for the decision, it was dealt with by Gisasola, but approved by the Governing Council of Fagor, which is the highest governing body, and finally by the members' assembly of the cooperative. Would the loss of the cooperative spirit of the partners who have spoken so much over the last 10 years affect this disaster?
It can be argued that, given the strength of the technostructure, the members have little to say in such a large cooperative, and whoever does so will not lack reasons. But to what extent is the reason for technocracy good? Also in other great coperatives? And for the time being, there are answers to everything, because there are big cooperatives like Fagor Arrasate, Fagor Ederlan or Fagor Copreci that are successful in their growth. Who is going to tell you, for example, that the strategy of extending these three cooperatives will become their granddaughters?
But the argument is not a joke and an example of this is the Eroski who has been caught up in the growth strategy. So how far should we go, how far should we go? But is the main key to growth or the characteristics of the current crisis? In the case of FagorE it is clear that the explosion of the real estate bubble has been key in its decline. In the case of Eroski, as the decline in consumption has a tremendous effect. After all, these two factors have come together in the case of Fagor, who has come to the crisis of the difficult and complicated decision – Brandt.
Internationalisation and enlargement are not the doubts of yesterday evening. At the 1999 round table for LARRUN, José María Ormaetxea, of the founders of Fagor, said: “The biggest distortion of the cooperative experience could come from internationalization.” Also in 2006, the then president of MCC, Jesús Catania, launched in the press: “I have doubts that the cooperative model can be maintained in a corporation of almost 100,000 people with different countries, cultures and interests.”
At the moment it is clear that yes, it has resisted, as well as success, but all this will have a price and, for the time being, one of the compensations is that which took place at FagorE.
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