OURbiz

Everyone Can Be An Owner

EVERYONE CAN BE AN OWNER
Worker-owned co-ops growing
By Janis Mara

BUSINESS WRITER LAURA MAYORGA of Oakland was about to leave the United States for a trip abroad, but she managed to squeeze in one last visit Thursday to Arizmendi Bakery in Oakland, grabbing a slice of mozzarella, roasted yellow onion and red cabbage pizza. Arizmendi is worthy of a special trip, Mayorga said. "The food is so fresh," she said.

But the bakery, known for its exceptional cheese bread, scones and pizzas, is special for another reason. It belongs to its employees, known as "owner-workers." There are no bosses — or, more accurately, everyone who works there is the boss. The bakery, along with Berkeley's Cheese Board Collective, the Berkeley Free Clinic and San Francisco's Rainbow Grocery Cooperative, is an example of the 30-year tradition of worker-owned cooperatives in the Bay Area, which has the largest concentration of such companies in the United States.

And insiders say the sector is growing, with numerous co-ops opening in the Bay Area over the last five years. Still more are in the planning stages, with cities including Walnut Creek and Concord seen as "great opportunities," according to a spokesman for the Cheese Board, a Berkeley pizzeria and bakery.

Nationally, worker cooperatives are a $400 million business, according to the National Cooperative Business Association. Bay Area worker-owned co-ops generate more than half that amount, said Melissa Hoover, executive director of the San Francisco-based U.S. Federation of Worker Cooperatives. In the Bay Area, there are two main types of cooperatives: consumer, such as outdoor outfitter REI, and worker-owned. "With a consumer co-op like REI, membership can be extended to anyone who buys its goods and services," Hoover said.

Worker-owned cooperative membership is determined by working at the business. Co-op members say the work isn't bad. "I like the variety of working at a co-op," said Darren Korn, who has been a worker-owner at the Oakland Arizmendi location for seven years. Five days a week, Korn rounds dough, spins pizza into pizza shells and builds and bakes pizzas. "While I'm doing that, I'm discussing policy issues with the other members," he said. "You get to know your co-workers very well. It becomes like family, which is good, but if you're not careful, it can become a dysfunctional family," said Korn, who is starting a family of his own, with a baby due this spring. His co-op has 23 workers and generated $2 million in revenue this year, Korn said. (The bakery has three locations — the two others are in Emeryville and San Francisco — and each operates independently.)

Worker-owners don't have to worry about what management is thinking, since they are management. But this has its drawbacks, too, Korn said. "You can't just say, 'Screw it, I'll let the boss take care of it,'" he said. "You are the boss." Wages can be another concern. Steve Manning, a worker-owner at the Cheese Board, took home around $38,000 last year — though he also pocketed a $12,000 bonus because the business made a profit. With worker cooperatives, profits are shared among the employees and also put back into the business. Still, Manning and Korn said worker-owned cooperatives are good places to work.

At Arizmendi, employee turnover is very low — an anomaly in the food industry, Korn said. Indeed, the 30-year-old Rainbow Grocery, which now boasts 250 workers and $40 million yearly revenue, has employees with 10, 15 and even 25 years' tenure. Arizmendi is also an example of how the co-op sector has been picking up steam in the Bay Area over the last few years.

"Two Bay Area organizations are primarily responsible for the growth in new co-ops. One is the Association of Arizmendi Cooperatives," said Dave Karoly, a staffer at the Network of Bay Area Worker Cooperatives, or NOBAWC, pronounced "no boss." The association formed the first Arizmendi Bakery nine years ago. Members of the 40-year-old, phenomenally successful Cheese Board Collective — one of the country's best-known worker-owned co-ops — helped organize the bakery cooperative. The Cheese Board lent its recipe — literally and figuratively — to Arizmendi, sharing culinary and business secrets, said Steve Manning, a worker-owner at the Cheese Board. The association plans to open a fourth Arizmendi Bakery in the next year or two and is scoping out locations now.

The other association responsible for establishing a number of new worker-owned co-ops in the Bay Area is Women's Action to Gain Economic Security, or WAGES, which opened three co-ops between 1999 and 2003 in Redwood City, Morgan Hill and Oakland, and plans to open another one in the next year. The association works with low-income Latina women to establish worker-owned housecleaning businesses using environmentally friendly products.

Other worker cooperatives are forming independently. Inkworks Press, a 32-year-old worker-owned union print shop that is also an Alameda County certified green business, spawned an offshoot called Design Action Collective about three years ago. Manning, who was laid off from a corporate job in 2001, said cooperatives are becoming attractive to a growing segment of workers. "The standard corporate model is no longer providing pension plans and other forms of security," he said. "People are realizing they have to take more responsibility themselves, and one of the ways they can do that is by becoming an owner-worker and having a vote."

Contact Janis Mara at jmara@angnewspapers.com or (510) 208-6468. Check out her Energy Blog at http://www.ibabuzz.com/energy.

US Federation of Worker Cooperatives Newsletter

The link below will take you to the 2nd edition of the USFWC newsletter.  It's loaded with valuable information.

http://www.usworker.coop/USFWCsummernews07.html

JOB ANNOUNCEMENT

AK Press, perhaps the nation's leading publisher and distributor of books, cds and dvd's, is looking to hire two persons whose work would be to take orders, then package and ship them out of the worker cooperative's Oakland, CA warehouse.

Please forward, repost, and circulate widely. 

For immediate consideration! 

Women and People of Color strongly encouraged to apply. 

AK Press is looking to add two new members to our collective. These positions require a minimum of 40 hours work per week in our  Oakland warehouse, plus additional nights and weekends tabling at special events (bookfairs, concerts, conferences, etc.).

AK Press is a worker-owned and run anarchist collective, which publishes and distributes books and other media. Our politics draw on the rich heritage of anarchist, anti-authoritarian and left-communist thought and action; for more information on our politics as they relate to our business, please see: http://www.akpress.org/about/aboutakpress. AK Press publishes around 20 books, CDs, and DVDs per year, and distributes thousands of other titles from independent presses and publishers to the book trade, individuals, radical spaces, and other outlets.

We are hiring for two Order Entry / Shipping and Receiving positions in our distribution department. 

Job responsibilities include:

• Entering orders and shipping books to stores and wholesalers.

• Receiving incoming shipments (including entering new products, reconciling differences between shipment quantities and purchase order quantities, entering pricing changes, etc.).

• Communicating with our store customers and vendors.

• Shelving and storing books and managing warehouse space.

• Working with other members of the department to select items for distribution and eventually sharing other duties such as ordering stock.

• Coordinating and supervising volunteers and interns to help with jobtasks.

• Collective management: the general management of the company is a collective responsibility. From ensuring our financial health, to assessing our political strategies, to facilitation of meetings, to answering the phone, to changing light bulbs and sweeping the floor, all responsibility and accountability for AK Press rests with its workers. 

We’re actively looking for people:

• Whose politics are compatible with AK’s mission, and whose experiences and interests can contribute to AK’s vibrancy and diversity as a political project.

• Who are detail oriented and well organized.

• Who have good math skills.

• Who have experience with Macs.

• Who have a knowledge of and passion for books.

• Who have an incredible work ethic.

• Who can work well as part of the collective. 

Other desirable qualifications include:

• Experience with Filemaker and/or Acumen Book.

• Experience in other collectives.

• Connections to current political activities.

• Experience in the book trade. 

Our pay is $25,000 per year, comprehensive health insurance including dental, 4 weeks per year of paid time off and all the joys and headaches of being part of a worker owned and managed company. 

Please mail, fax, or email a comprehensive letter of interest and a resume. All applicants will receive a response. Send applications, by July 31, to: 

AK Press
Attn: Jobs
674-A 23rd Street
Oakland, CA 94612-1163
Fax: (510) 208-1701
E-mail: jobs@akpress.org

Thoughts on Corporate Accountablity Conference

I am writing to express my appreciation and my disappointment with Ralph Nader’s Conference on Corporate Accountability (http://www.tamethecorporation.org/index.html). While I am pleased that the cooperative movement in this country gains the recognition it deserves at this conference (as a viable alternative to the Corporation), I am disappointed that someone who is not a member of that movement was chosen to speak for it.

Alisa Gravitz, the Executive Director of Co-op America, who spoke on the topic of “Co-ops and Credit Unions: People’s Businesses†may very likely be a member of a cooperative food market or a credit union, but so are millions of other Americans. Co-op America is a non-profit membership organization whose mission is  “to harness economic power . . . to create a socially just and environmentally sustainable society.†Despite the somewhat misleading name, it is not a member of the larger cooperative movement in the United States.

A member of the South Bronx, Cooperative Home Care Associates (CHCA) would have been a much better choice to speak to the topic of creating an alternative to the sociopathic practices of the corporate world. CHCA is a worker-owned home health care agency that currently employs more than 550 African-American and Latina women—75% of whom had previously been dependent on public assistance.

Or a member from Greenworker Cooperatives, also in the Bronx, would have been able to speak about their project to create a worker cooperative recycle/reuse center. This effort has received over a half-million dollars in start-up grant money to realize their vision of good, “green-collar†jobs, that sustain their communities not decimate them like the corporations.

My disappointment that a representative of the growing worker cooperative movement (now organized nationally as the United States Federation of Worker Cooperatives (http://www.usworker.coop/about) was not invited to speak, in no way should be interpreted as a rebuke of the work that Ms. Gravitz does with Co-op America to educate small business owners about social justice issues.

Inkworks Press, the collectively managed print shop I am a member of in Berkeley,CA, has been an active supporter of Co-op America for ten years. And we have encouraged other worker-managed enterprises to join and to participate in the Green Festivals that they, in partnership with Global Exchange, stage in three major metropolitan areas across the country.

One of the best-kept secrets in this country is the self-managed economy of democratic workplaces, whether organized as cooperatives, democratic ESOPs or loosely legalized as collectives. This diverse economic arena, together with the new movement of staff controlled non-profits and the expanding practice of community-controlled enterprises opens a vista to “economic citizenship.â€

The Solidarity Economy evolving in the countries of the South reflects a similar positive practice (not simply against, but beyond, the transnationals) in the current “exploiting fields†of global trade.

What better alternative can we imagine to the corrupting power of transnational corporations than an international network of people practicing in their daily work lives a perspective that puts people before profit?

Bernard Marszalek
(written as a reflection on his own dime, not intended as a statement endorsed by Inkworks Press)

--
Bernard Marszalek
Inkworks Press
510 845 7111 x110
- - - - - - -
2827 Seventh Street
Berkeley, CA 94710
- - - - - - -
INKWORKS PRESS
• WORKER MANAGED
• UNION SHOP
• CERTIFIED GREEN BUSINESS
"Ahead of the curve since 1974"

WOODSHANTI NEEDS HELP

Cabinetmaker Wanted

This is a unique ownership position, please read entirely before submitting a resume.

Skills Needed

Responsibilities include all aspects of furniture and cabinet construction.
Project leader
Communication and organizational skills
Design skills, experience with oil finish and previous business ownership a plus

Experience qualifications to apply for an interview:
Minimum 5 years of professional experience
Must be interested in assuming responsibility of ownership
Must be enthusiastic about our progressive social and environmental policies

Woodshanti is a worker-owned woodworking shop located in Bayview, San Francisco. We build custom cabinets and furniture. We use certified sustainably harvested, recycled and salvaged lumber as well as natural finishes. We operate as a non-hierarchical cooperative shop based on the values of responsibility, trust, and fun.  We are looking for a new member/owner who is in alignment with our culture of progressive entrepreneurialism, self motivated leadership, and sustainable production oriented policies. Please note that this is not just a job, it is a family environment with a strong sense of purpose. Please check out our website at www.woodshanti.com for more info about us and to see examples of our work.

To apply please email, fax or mail us a letter of intent, resume and photos demonstrating your level of craftsmanship and design. No phone calls, No drop-in’s. We will respond as soon as we can process the applications.

Pay is based on experience and skill level.
Health benefits available
Women and persons of color encouraged to apply.

Send to:
zak@woodshanti.com
fax 415-822-8177
Woodshanti Cooperative
909 Palou Ave
SF, CA 94124

BITS AND PIECES

A collective of professional figure skaters has been formed for the purposes of member education, researching current practice, connecting members with performance opportunities, and promoting the profession. See the Professional Figure Skaters Cooperative at their website.

Josh Mc Fee presents the difficult situation of Just Seeds, a worker-owned non-profit of artists connected to the production and distribution of radical poster art, among other things. Their web business, selling the art projects of their members and others, has been jeopardized by the unexpected bankruptcy of their order-fulfillment company. 

Design Action Collective, one a few worker-owned businesses in which all workers are union members, argues for this form of cooperative organization in unionized trades.

The Contra Costa Times recently published a review of the activity of democratically owned businesses in the Bay Area, one of the hotspots for cooperatives in the United States.

Eric Magnuson of Seattle reports on the formation of The Web Collective in that region. It's a cooperative business of web consultants.

ragebaby, is a distributor of clothing (especially T-shirts) that uses apparel supplied by Fair Trade Zone cooperatives in Nicaragua. Their website has a lot more information as well as a link to the Fair Trade Zone itself.

Finally a report on the Ithaca Biodiesal Cooperative (of New York). The report is from Renewable Energy Access.

Since this is our swan song issue, we want to let you know that most of the information for Bits and Pieces comes from a Google free search service that combs the internet weekly and reports to you via email on the key words you choose. We have found the keywords "worker-owned businesses" to be the most relevant.

DESIGN ACTION CO-OP SERVES PROGRESSIVE MOVEMENT

Our thanks to Innosanto Nagara of Design Action Collective for this article and the photos to go with it.

Design Action Collective is a graphic design studio in Oakland, California.  It is a mission-driven organization; formed to serve the visual communications needs of the progressive movement. But they are also a democratic enterprise, currently employing five full-time collective members and the occasional freelancer.

Design Action was formed in 2002 as a spin-off from Inkworks Press, a worker-owned print shop formed in 1973, which was also mandated to serve the movement for social change. When the desktop publishing "revolution" hit in the 80s, Inkworks jumped in and developed an electronic prepress department that very quickly added desktop publishing and graphic design capabilities. As graphic design became an increasingly important service to non-profits and activist groups, Inkworks was faced with the reality that the design and prepress workflows did not always mesh very well. After a number of discussions about how to provide both services well, it was decided that design department should be spun off as it's own shop.

Thus Design Action was born. Inkworks' two designers left and were replaced by two dedicated prepress operators. Initially operating as a two-person shop working out of a living-room Berkeley, Design Action quickly expanded it's services. In 2003, they moved to downtown Oakland to share offices with The Ruckus Society and Third World Majority. Then they started adding collective members.

While still working very closely with Inkworks (and currently trying to figure out how to develop an umbrella organization for both shops) each is now an independent worker-owned business. They serve many of the same organizations, but Design Action was also able to expand their services substantially into the area of web and multimedia, as well as other non-offset printing projects such as t-shirts and banners. Design Action is also able to now help organizations with full-ad campaigns, messaging, and strategic communications. All of which is proving to be of increased importance to the social justice movement. Without advocating for image over substance, it is also Design Action's assumption that we are not lacking good solutions, theories or even solid working models of how a better world is possible. Yet the other side spends billions of dollars every year bombarding people with the message that we have no alternative to the current system. Thus it is important for progressives to find a way to articulate their vision--and the visual communications piece of that effort is what Design Action seeks to tackle.

At the same time, Inkworks has been able to place a stronger emphasis on the technical side of it's prepress and printing--modernizing it's presses and soon launching an online print-ordering system. So the split has been a win-win for both shops.

As a collective, Design Action models most of its policies on Inkworks. It has a flat decision-making structure, and equal hourly pay. The collective candidacy period is 9 months, but there is no buy-in. The weekly collective meetings are off-the-clock and considered an ongoing investment to the shop as a political project. Design Action is incorporated as a cooperative following the model of Rainbow Groceries and the Arizmendi Cooperatives. Members are active in a number of different social movements, and the shop is a member of the Network of Bay Area Worker Cooperatives, The U.S. Federation of Worker Cooperatives, and their union, Communication Workers of America, AFL-CIO. It is also an Alameda County certified Green Business, and is majority woman-owned. And to top it off, Design Action is majority people of color, with native speakers of Indonesian, Spanish, Hindi and some Bengali on staff :).

For more samples of Design Action's work, check out the slideshow on their homepage (http://www.designaction.org) or their online portfolio, organized by political points of unity: http://www.designaction.org/portfolio/pou/international/international.html

Please find the Design Action website the Co-op Links in the sidebar.

BITS AND PIECES

Here are a few links you might like to explore.

The Daily Californian features a story on worker co-op activity and its impact on the Berkeley, California community. The article presents the work of Network Of Bay Area Cooperatives (NoBAWC). While it mentions a few co-ops in the area, it highlights the work of our old friends at the Cheeseboard Collective.

Ethan Miller is a familiar name in the co-op universe. A member of GEO, Ethan is also the moving force behind the Data Commons Project an attempt to build a database that will collect and disseminate information on the many organizations involved in democratic, cooperative, and community-based economic systems. In this article Ethan challenges us to stop telling and thinking in the dominant economic paradigms and begin instead to tell stories and create enterprises emphasizing democratic, cooperative, community-based values.  Link to this excellent article from Yes! magazine.

Bicycle Retailer recently published an update on developments at Burley Design, the worker co-op, bicycle manufacturing company that recently reorganized as a standard corporation and was subsequently sold to a single owner.

Along that same line of inquiry, epluribus media reviews a book by Peter Barnes: Capitalism 3.0: A Guide To Reclaiming The Commons. Read the review at this link. Click on the book's title in the sidebar. That will take you to Amazon.com where a lot more information is available.

NEWS BRIEFS

Dan Bell of the Ohio Employee Ownership Center writes in Dollars and Sense magazine about the difficult role of unions in employee-owned firms.

Tom Cobb (see book in the sidebar) weighs in with an article from Op-Ed News advocating for the development of a Real Ownership Society (to borrow a phrase from Dubya).

Common Ground Restaurant, a long-time member of the cooperative community in Brattlesboro, VT that closed a while ago, has re-opened. Here's an article from the Rutland Herald.

ABC7/KGO passes along a story about a new cooperative, Three Stone Hearth, in the San Francisco area.

And, from the Capital Times (Madison, WI), a report on the work of The Center for Development in Central America on their extensive work in developing worker cooperatives amongst the very poor in Nicaragua. See the sidebar for a link to CDCA.

WESTERN CONFERENCE NEEDS STAFF

NOW HIRING!
Job Title:  Co-Staff Organizer
The Western Worker Cooperative Conference Planning Board is seeking to hire for a part time co-staff contract position to prepare for the upcoming October 2007 conference.  Skills sought include:

    * Basic website design and maintenance
    * Account management and bookkeeping
    * Fundraising and grant writing
    * Administrative work

The co-staff worker will work with current staff and the planning board by periodic conference calls and internet to plan and host the conference. The staff person will be required to attend and help administer the three day conference.

In an effort to strengthen the position of worker cooperatives and create more democratic jobs the WWCC hosts a bi-annual gathering that facilitates the sharing of information and skills amongst worker cooperatives in the Western United States. The conference allows for skill sharing between co-ops, provides support, education, and training as well as business development training, networking, collaboration, and education through forming local and national worker-coop alliances.

We are seeking to employ individuals who will reflect the community we serve.  Women, People of Color, Seniors, Lesbian/Gay/Bi and Transgendered people are encouraged to apply.

Compensation: The rate of pay for all work performed by this co staff organizer, except at the conference itself, shall be $20.00/hour to be dispensed on a monthly basis. There are roughly 300 hours budgeted for all staff labor (to be assigned according to task and job description).

  Interested parties should submit resume, references, and a cover letter to this address:wwcchiringcom@sbcglobal.net  

NEWS BRIEFS FROM THE UNITED STATES

From time to time we come across links to websites that have run stories of interest. Here are a few.

Burley Design, a long-time worker cooperative was converted to a corporation recently. The corporation has been purchased as noted in this article from the Register Guardian.

Two links from the Vermont scene, one on Vermont co-op law, the second from Infoshop News on the changing face of employment in Vermont.

The San Francisco Chronicle carried an article in 2003 about The Lusty Lady, a worker-owned exotic dance club.

Back in July Professional Healthcare Institute was looking for a Business and Consulting Manager. May be filled by now.

The Boston Herald carried a story recently about the closure of the Someday Cafe, a worker-owned company.

In our next issue we'll send some international links of interest.

 

HEARTWOOD COOPERATIVE WOODSHOP

We asked John Curl of Heartwood Cooperative to help us tell you about their company. Here's his report. We thank him for the thoughtful article. The photos (from top to bottom) are Tom Brown, Gerard Laugier and John Curl.

Heartwood is a cooperative of custom woodworkers sharing a well-equipped 3,000 square foot shop in West Berkeley, California, where we have been for over thirty years. We share machines, knowledge, skills, energy,resources. Some of us specialize in cabinetry, some in furniture.

The cooperative operates the shop, owns most of the equipment, provides basic woodworking supplies such as glue, dowels, biscuits, nails and sandpaper, and provides insurance. We are each responsible for a share of the upkeep,
maintenance and improvements. Each member is self-employed with his or her own business, and contracts jobs separately. We help each other when needed. The
shop is a non-profit incorporated cooperative. We have full-time and part-time members. New members have a buy-in of two months rent. Members do not own shares, so departing members are not bought out.

Important decisions are made at weekly meetings. We strive for consensus but also vote when necessary. No one has any permanent shop job or position of power. There is a special job of dungaloz, which changes monthly in rotation. “Dungaloz†is Armenian for “stupid little darling,†and the dungaloz was created when Rick—who is Armenian, decided he hated the title shop manager. The dungaloz makes sure all the basics are taken care of related to overall shop functioning, and also chairs meetings. Other special jobs are bookkeeping and dealing with insurance.

On the first Wednesday of each month we have Shop Day, when we spend a half day doing clean up, maintenance, and improvements, followed by a meeting. Two weeks later we have Clean-up Day, followed by another meeting, if we need one. This second day usually takes only an hour.

Most of our machines are owned by the cooperative and some belong to individuals, but all are used and maintained collectively. The shop is responsible for replacing any machine used by the shop that has been worn out or damaged. Each of us has individual hand tools. When we need help on a job, we occasionally hire each other, but jobs are usually limited to what one person can handle.
Full-time members have unlimited use of the shop; part-time members can use the shop up to twenty hours per week. “Ghost†members have minimal “hobby†use of the shop; this status is limited to former members.

Our cooperative system is typical of groups of artisans, where the methods of production are basically individual. The artisan cooperative is clearly distinguishable from the industrial worker cooperative, where the methods of production are collective. The former is usually an association of self-employed members, while the latter is a business with the members employees. Heartwood is now over thirty years old. Over the years more than forty woodworkers have been members of our shop. The median average stay has been around five years. We have been able to maintain a cohesive center, while membership has slowly changed. Our longevity can be attributed partly to our system being very simple and practical, arising from our actual needs and the conditions of the industry itself. Our policy of maintaining an affordable buy-in has kept our shop open to new members with limited financial resources. If we had shares which accrued value, the shop would probably become unworkable over time, since most incoming members do not have extensive financial resources to buy out departing members. Much of the turnover in the shop has come because, for one reason, people move around a lot these days, and for another reason, unfortunately even in a cooperative it is still not easy to make a good living doing custom woodworking.  Many former members have gone on to different better-paying professions. Woodworking is rewarding but not very lucrative. As quality increases, fine woodworking becomes increasingly skilled and labor intensive, yet financial compensation does not always rise in proportion. Mid-quality cabinetry often pays better than higher quality. Part of your motivation has to be the craft itself.

I am the only remaining member of the original group of six who founded the shop in the fall of 1973. We started Heartwood because all needed each other, and because we wanted to work with others in an equal and democratic situation rather than becoming an employer or an employee. We each came into the shop without the appreciable economic resources needed to set up a woodshop on our own. Individually our technical knowledge was not always adequate, but together we managed to fill in the gaps.
Bob, John P., Sherry, Eric, Curt, and I had been working together for several years previously, in Bay Woodshop, before we formed Heartwood. We original six had been part of a larger organization called Bay Warehouse Collective, which also consisted of a print shop, an auto repair shop, an electronics studio, a pottery studio, a darkroom, a theater, and a food buying cooperative. Bay was a creation of its era, the early ‘70s, when many people––most of them young––were trying to create more equitable work and social structures in their lives.

Bay Warehouse was a centralized worker collective. It was much more utopian than Heartwood, with all proceeds from the shops going into a common kitty, and everyone getting paid according to their needs, at least in theory. In practice, we were almost all young and without families, and, since Bay was always just scraping by, nobody ever got beyond subsistence pay. Bay Warehouse in turn had been founded on the ruins of an “alternative†high school called Bay High, which focused on teaching skilled trades in a
non-authoritarian environment, meanwhile immersing the students in actual commercial work. Bay High folded when the classroom teachers refused to join in sweeping the floors and taking out the garbage, so the shop workers kicked them out. While both Bay High and Bay Warehouse Collective had fascinating histories, they are part of a different story. Anyway, when Bay Warehouse folded due to cash flow problems in the fall of 1973, the woodshop, print shop and auto shop all went our own ways. Each group stayed together and reorganized itself as a separate shop. Bay Printshop became Inkworks, a worker cooperative. With machinery we inherited from Bay, Bay Woodshop reorganized ourselves into Heartwood.

I started in woodworking in 1970 in a small kitchen cabinet factory in Albuquerque, New Mexico, in what is known in the trade as a production shop. There were around twenty employees. I started at the bottom, a sander. The work was hard and low-paying, and there was no union, but the worst part was my shattered expectation that I would learn woodworking there. In this situation I would never get beyond journeyman. The workers were always limited to particular operations, and large segments of the process were beyond the scope of the job. I realized that I might enjoy being a woodworker if I could do it in a different context. I got that context first at Bay Woodshop, then at Heartwood.
While we were Bay, our average skill level was around journeyperson. The shop would take in a job and the group would collectively figure out how to build it. But we were constantly improving, as well as learning how to run a business. By the time we formed Heartwood, we were all capable of making the leap from workers to self-employed artisans. The shop, and not the job, became our common project.

An enormous amount of excellent work has passed through  Heartwood over three decades, but the real story of  the shop has been the human story. A rich cross-section of humanity has also passed through the shop, with all the same human foibles as the rest of the world. The shop has taken different flavors in the various mixes of people. Sometimes it has been a good sit-com, sometimes a drama. There have of course been personality conflicts and struggles in the shop over the years, dramas have been played out, and on occasion someone has had to leave. In the end, so far at least, it has always turned out okay, and the shop has survived.

In the early days we always had many more applicants than we could handle. Working with your hands was attractive to many young people in the 1970s and ‘80s. But with the dot-com boom, many fewer young people seemed to be going into the trades, and it became more difficult to find new members. I guess they were just following the job market.

While Heartwood has had a lot of continuity, it has also had several distinct incarnations. One group would fall apart by losing key people, but then the shop would reform when new people joined. The early group soon included Jean and Priscilla. In the  late 1970s and ‘80s the group included Liz, Jed, Rick, Bill, Tom, Michael M., Robert, Lynn, Laurie C., Sara, Stu, Trent, Steve W., Shelly, and Closetman Dave. By the 1990s and ‘00s Heartwood members included Laurie M., Steve B, Mike M., Brad, Kim, Debi, Jim, Jason, Moses, Real, Gerard, Joseph, Kristen, Susan, Chickie, and Peter. Every one of these people interacted, struggled, laughed, shared good times and hard times, and made contributions. Every person was coming from somewhere in his or her life and going somewhere.

People don’t miraculously change when they join a cooperative. To the contrary, a successful co-op is structured to function around and to bring out the better parts of human nature. While all people have tendencies which unchecked can destroy a co-op, such as territoriality, competitiveness and envy, some people have worse cases than others. Extremely competitive people cannot work harmoniously in a cooperative. There have been a few members who simply did not have cooperative personalities, who were overly self-serving, opportunistic, and one or two played the system for what they could get out of it. But for most people, a situation stressing cooperation, sharing, and trust serves to temper and minimize the opposite qualities.

Despite personality difficulties such as occur in every group, the great majority of Heartwood members have always worked things out and had productive stays. A good number of former members stay in contact, and appreciate their time in Heartwood as well spent, although they have moved on in their lives.

We currently have four full-time members, two part-time members, and three ghost members:  Tom Brown, Gerard Laugier, Kristen Delmage, Moses Jones, Peter Weege, Rick Magarian, Bill Powning, Susan Quinlan, and myself. We are just losing a couple of members. After six years, Kristen is returning to her native Canada, and Susan has become a ghost member, so we currently have openings for a full-time and a part-time member. If you know any woodworkers in need of a good shop, tell them to give us a buzz (phone below).

In woodworking, as in many fields, while advanced technology has greatly expanded capabilities and productive powers, it has at the same time narrowed the number of  workers able to make a living at it independently, due to the expense of machines and competition from mass production. The market forces set in motion by advanced technology in a very competitive industry, make it very difficult for workers to be productive enough using  simpler machines and tools. A cooperative such as ours helps to reverse this process by democratizing access to the means of production.

Personally, after thirty-plus years, one of these days I know I’ll have to retire, but I still enjoy working in the cooperative and I still get a lot out of the work. You don’t always get to know everything about people’s lives when you work with them, even in a co-op, but you find appropriate spaces for those relationships. You get to know them as work friends. If the work situation is harmonious, as it can be in a well-functioning cooperative, you retain fond memories of those work friendships the rest of your life. The process of woodworking is meditative and creative. Wood is a wonderful medium. The democratic interactive process of a cooperative is also a wonderful medium to pass your work life in.

John Curl
2547 8th Street, Berkeley, CA 94710
510-845-4887

NOW HIRING IN VERMONT

Don Jamison wrote to describe a job opening in Vermont. If you'd like to respond or need more information, click on the Vermont link in the sidebar to the right. Look in Support Groups. Here's the job notice.

As many of you know, Senator Leahy secured an earmark for the VEOC in the FY06 budget.  That funding, which will come to us through the Small Business Administration, will soon be accessible and we are now ready to add staff.  Please see the job description below for a "Technical Assistance Director."  The person we are looking for will be able to: 1) assess the prospects for employee ownership in particular companies, make recommendations, provide referrals to professionals, coordinate transactions and provide post-transaction support; and -- just as importantly -- 2) be a strong communicator and leader.  As the job description says, "The individual hired for this position will be considered for the VEOC Executive Director position as it becomes available."

The VEOC has a fabulous board, a good reputation and track record, and is ready to make an organizational quantum leap.  Please help us find the right person!  Please apply yourself, and/or forward this to any suitable individual.

NEWS BRIEFS

Here are a few bits and pieces from the field.

Burley Design, the veteran bicycle and bicycle accessories cooperative have changed their legal structure from a cooperative to a corporation. The move may be a prelude to bringing in outside owners or selling the company outright. Here are two links that supply more detail; the first from the Register-Guardian and also from Bike Biz.

Colors, the restaurant cooperative put together from the staff of Windows On The World, the restaurant at the top of the World Trade Center, now has a website.

4 STAR COURIER COLLECTIVE FORMS IN THE WINDY CITY

If there is any remnant of the idea of an urban cowboy, it would have to be those dare-the-devil young adults who provide bike messenger services to downtown businesses in large cities. It’s hard and sometimes frantic work with more than its share of physical danger as messengers thread their way through big-city traffic on bikes with no gears and no brakes. Injuries are frequent and most companies provide no health insurance, no workman’s comp, no disability insurance, no holidays, and no paid time-off. And the pay is somewhere just below the poverty line.

A few messengers in Chicago, fed up with these exploitive practices, tried to organize messenger service workers, forming a union through the International Workers of the World, the “Wobbliesâ€. At first all was hopeful, but conflicting interests between the bikers and vehicle drivers rendered the union ineffective.

Then one of the members joined a west coast bike tour and in the process hooked up with folks from the Magpie Messenger Cooperative in Portland. On his return to Chicago, he proposed that Chicago bikers form a messenger cooperative, hoping that a cooperative could provide quality service at a decent price.

Their experiences have been both interesting and perilous. Here’s a link to an article in the Chicago Reader, which has details on their struggle to form a viable business that doesn’t exploit either customers or staff. It’s an interesting case study.

We wish the 4 Star Courier Collective well.

You’ll find a link to Magpie Messenger Cooperative in the sidebar.

ARIZMENDI IS LOOKING FOR WORKER-OWNER

The Arizmendi Bakery, one of the pioneer worker-owned businesses in this country has a position available. To see the particulars, click on the download below. For much more on Arizmendi click on their website in the sidebar. There are additional job listings in the STAFF NEEDED post at the bottom of the page.

Download arizm_job.doc

For The Want of Capital

Is the Joy of Ownership Over at Good Vibrations?

Good Vibrations, perhaps the nation’s first sex toy and bookstore to aggressively promote safe sexual pleasures without shame, is the among largest U.S. worker cooperatives – in terms of the number of owners and gross sales.

But alert professional retailers, as well as customers visiting the Good Vibrations store in San Francisco, began opening similar joy of sex stores around the country, particularly for Internet sales.  Sales growth stalled.

Prudently, the hard-working owners looked outside the workforce for advice, and capital to expand.  Their story follows.  It has sent ripples of disappointment through the growing movement to form, or to enlarge, worker-owned cooperatives.

One might argue the changes that have taken place at Good Vibrations in recent months strip the business of its cooperative features.  After all, since the Rochdale Pioneers lost control of their calico manufacturing mill in the late 1800s, one worker cooperative after another has fallen victim to bankers’ reluctance to lend to working women and men who are minding their own businesses.

Too, unlike the Mondragon Cooperative Group in northern Spain, there is no central, national bank established for the explicit purpose of lending to worker cooperatives.  There are small regional lenders – the Local Economic Assistance Fund [LEAF] managed by the ICA Group in Brookline, MA, and the New England Cooperative Development Fund also based in Massachusetts, for example.

And U.S. credit unions, also spawned by the success of the Rochdale Pioneer’s retail food cooperative and by the calico mill’s early success, pay scant attention to worker cooperatives, despite the fact there are an estimated 88 million credit union members in this country.

There are several crucial matters the following report does not specify:  Can non-member workers purchase stock after proving themselves?  Who elects the Board of Directors?  Must a director be a worker owner?  Are directors elected on the basis of one-person, one-vote?  How many outside investors have board seats?

But, we argue - assuming the voting stock of Good Vibrations is sill closely held, and that Board must be worker-owners, there’s nothing very radical about what is happening at the firm.  What they are doing follows a pattern by many worker cooperatives in states without Cooperative Corporation statutes.

However, we think the imaginative owners at Good Vibrations do face challenge.  Stock may appreciate to levels so great new employees may not be able to afford to buy shares.  If so, then Good Vibrations may go the way of the once-great plywood mills in Washington and Oregon.
    - Frank T. Adams

BIG CHANGES AT GOOD VIBRATIONS

On February 1, 2006, Open Enterprises Cooperative, Inc., (D.B.A. and better known as Good Vibrations) restated its articles of incorporation with the state of California to become Open Enterprises, Inc., a corporation organized under the state of California’s general corporation code. The following is an explanation of the reasons for this reorganization.

Good Vibrations was founded in San Francisco’s Mission District in 1977 by sex therapist and educator, Joani Blank, in order to provide a place for women to shop for sex toys and other sexually explicit materials in a clean, well-lighted alternative to traditional “adult bookstores.† The store thrived for the next fifteen years as more and more women, as well as men, discovered Good Vibrations and its novel commitment to promote healthy attitudes about sex and pleasure, while adhering to the business practices of openness, honesty and cooperation.(1)

In 1992, Blank sold the business, incorporated as Open Enterprises, Inc. since 1987, to thirteen staff members, who in turn re-incorporated the business into Open Enterprises Cooperative, Inc. under California’s Consumer Cooperative Code. The co-op existed in practice as a worker co-op, with “matronage†(a feminist rendition of patronage) distributions earned based on hours worked, calculated at the same rate for all worker-owners.

Good Vibrations grew with the 1990s economy. A second store opened in Berkeley, CA and a 1-800 number was added in 1994; the web site http://www.goodvibes.com launched in 1996, and the company added administrative departments to supports its growing retail divisions. In 1998, the worker-owners voted to expand, and in 1999 the OE Board of Directors began researching ways to expand while maintaining the cooperative structure. The desire to grow was largely in response to an explosion of women-friendly sex toy companies, many founded precisely on the model of Good Vibrations, which had begun cropping up in other cities and on-line. Though Good Vibrations continued to chalk up record sales until the economic downturn punctuated by the attacks of 9/11, its owners and management could not ignore the fact that in order to stay profitable in the increasingly crowded niche market, the company needed to reach new customers.

Significant growth was proving difficult for Good Vibrations (GV) due to the fact it lacked access to capital more readily available to non-cooperative businesses. Obstacles faced by co-ops who wish to raise cash have been well-documented. (2) In fact, the reality for GV was a double-whammy–not only was it a cooperative, an unusual corporate structure in the U.S. business market and therefore not an enticing investment risk to banks and venture capitalists, but GV is also a company that promotes sex and sells sexually explicit materials. Financial institutions, even the National Cooperative Bank, were not willing to take sex toys, books, and DVDs as collateral.

After weathering the brief recession of the early 2000s, Good Vibrations opened another San Francisco retail store, this one at Polk and Sacramento, in 2003. GV opened this store entirely with cash reserves. While retaining and using owner distributions is a common method used by cooperatives

One could even say that GV suffered a triple-whammy in that its legal corporate structure, a consumer cooperative, did not match its de facto financial structure, a worker-cooperative. Legal counsel has suggested that this eventually may have proved problematic with the IRS, especially as sales and owner distributions increased to fund growth and capital improvements (3), this left Good Vibrations cash poor for other basic needs–including competitive salaries, quality benefits, and facilities and equipment upgrades. Additionally, the worker-owners of Good Vibrations made it clear again and again that one of the primary perceived benefits of being a worker-cooperative was the opportunity to earn a share of the profits.

Good Vibrations found itself at a crossroads well- known to other co-ops that needed to grow. In the spring of 2005, the OE board of directors began to craft a plan of action to reorganize the company into one that could promote its sex-positive mission worldwide and thrive for the benefit of all its workers. Building on the work of others who came before, the board utilized a previously written values statement to cement what it is that makes Good Vibrations an exemplary institution. After much research, discussion and presentations to the ownership, it became clear that Good Vibrations could maintain its progressive business values–such as promoting healthy attitudes about sex, respecting diversity, paying living wages to all workers, supporting the communities in which GV does business, and offering ownership and profit distribution to workers, to name a few–whether Good Vibrations is organized as a cooperative or not.

With solid support throughout the organization, the Board forged ahead with OE’s legal team to create new bylaws and a shareholders’ agreement that adhered to an updated mission and a vision statement, both written by workers, and the aforementioned values statement. At an ownership meeting in January 2006, worker-owners (all regular workers were owners by that date) received a ballot asking, yes or no, if they supported restating the articles of incorporation to reorganize as a general corporation. Shareholder agreements were also distributed; these laid out the new terms of ownership and the corporation’s obligations to the shareholders–all of whom, as of this writing, are workers at Good Vibrations.

Sixty-seven of seventy-two worker-owners voted “yes,†five abstained, and zero “no†votes were recorded. Thus, Good Vibrations reorganized as a California Corporation with the overwhelming support of its worker-owners.

The benefits to the workers of Good Vibrations as a result of the reorganization cannot be denied. Instead of paying an arbitrary amount of money for “a share†of the co-op that earned no interest regardless of how long a worker stayed with the company, now each worker owns an equal portion of the book value of Good Vibrations in capital stock, the monetary value of which will increase as the value of the company increases.(4) Furthermore, and importantly, GV’s executive team can begin to seek out investment capital in order to further establish Good Vibrations as the industry leader in the women-focused sex toy retail market. This will aid workers by creating more career opportunities through expansion, generating greater profits to be available for distribution as dividends, and creating the financial resources to provide excellent compensation to workers via competitive salaries, opportunities to earn raises and the ability to offer stellar benefits, such as matching 401k plans.

On the flip side, the new capital structure does have some drawbacks for GV workers, present and future. Future workers who wish to purchase shares of GV after one year of employment will have to pay substantially more for their capital stock than workers did for “one share†under the co-op structure. In light of this, workers will have ten years to purchase their stock, though they will be fully vested in five.  Also, under the new model, shareholders have less control over certain financial decisions. Instead of worker-owners voting on surplus distribution splits, as in the co-op structure, .determining whether to issue dividends and at what percentage lies solely with the Board of Directors under California law.

And yet, valuing worker input is hard-wired into the new incarnation of GV. Only a shareholder vote can change the shareholder agreement, which includes a commitment by the Board to hold and honor a shareholder vote to recommend dividend distributions; only a shareholder vote can approve the terms of an investor relationship, as required by law; and only a shareholder vote can change the Good Vibrations’ Corporate Code of Conduct, the document that encompasses the company’s unique and agreed-upon mission, vision, and values.

Though we’ve achieved a new corporate structure here at Good Vibrations, we will continue to extend 10% discounts to NOBAWC members, in honor of our co-op roots. In partnership with Carol Queen’s non-profit, The Center for Sex and Culture, we will continue to host after hours and outreach events to the public, as well as maintain our rigorous sex-educator-sales-associate trainings so that we can offer not only the best selection of products in our marketplace, but the most accurate and up-to- date sex information as well.

We are excited about our new possibilities for growth. We look to a future
in which Good Vibrations’ sex-positive mission reaches more and more people throughout the world. And we’re thrilled with the prospect of doing all of this while continuing to reap the fruits of our own labor.

Adrienne Haddad
Inventory manager and member of the board of directors at Good Vibrations
Used by permission

_______________
Notes:
1. Joani Blank was an early member of the Briarpatch Network, a group of small business owners who believe in “open accounts, business honesty, and information sharing†in order to improve business viability. For information,  see  http.//www.briarpatch.net.

2. For example, see “Co-op Success and Failure: Finance Remains an Issue†by Christopher Gunn,Hobart and William Smith Colleges, Geneva, NY and  “Non-member Equity Instruments for Consumer and Worker Cooperatives†by Jill Storey, University of California, Davis; also see “The Bottom Line on the Conversion of Diamond Walnut Growers†by Sherman D. Hardesty, University of California Gianini Foundation for an example of a similar response by an agricultural
cooperative to the need to adjust market forces, and the effects on the members of the co-op.

3. See again “Co-op Success and Failure,†Gunn and “Non-Member Equity,†Storey

4. Of course the opposite is true as well—if the value of GV decreases, so does the value of the stock. And yet, each shareholder is guaranteed that the corporation will buy back shares for at least the price paid, as defined by CA law

IN THE EYE OF THE BEHOLDER...

“WHEN IS A CO-OP NOT…?â€

Changes in the structure of Good Vibrations, the famous San Francisco sexy gift retailer, gives us another opportunity to examine what constitutes a worker-owned business.

The owners of Good Vibrations seem to feel that their company structure no longer allows them to be considered a worker-owned enterprise.  They raise four concerns:

•    Conversion from a co-operative legal structure to a standard corporation;
•    Creation of a governance hierarchy (board of directors);
•    Creation of a management hierarchy; and,
•    Shifting to valuing stock (and thereby the cost of ownership) from a membership fee basis to a stock purchase with the cost of stock (and thereby ownership) based on the actual valuation of the company.

By defining worker-ownership narrowly along lines some cooperative legal structures suggest, and by using a flat organizational chart so raises the threshold of qualification for ownership and participation that it excludes a number of perfectly solid worker-owned firms.

Our contention is that none of the recent changes at Good Vibrations should exclude them from our movement.  Here’s why:

CONVERSION FROM A LEGAL COOPERATIVE

Workers can own their firms even if not organized as a traditional cooperative. Other legal structures preserve the ownership principal. There are several ways for the standard C Corporation to both function as a cooperative and to enjoy the tax advantages of a traditional cooperative.

The worker cooperative legal form is not available in most states, the result being that in the United States the vast majority of worker owners use bylaws to accomplish their ends, but within C Corporations, S Corporations, even Limited Liability Corporations.

Bylaws can accomplish two of a cooperative’s central purposes - to distribute profit based on labor contribution and to reduce the double taxation on the firm.  The cooperative does not pay payroll taxes, and all profits distributed to members are tax-exempt to the cooperative.

In some industries, and under certain circumstances (the need for dramatic growth being one of them), a cooperative may not be the best structure for workers seeking to become owners, or to exercise ownership rights.

The bottom line social goal is that every vested member has an equal say in the firm’s policy functions, as well as a direct say in all matters related to wages, hours, and working conditions.  The bottom line financial goal is to operate a profitable firm, thus allowing social goals to flourish.

Distributing profits based on simple hours worked may not be the best nor the fairest standard.  Performance-based distribution may be a fairer formula, especially in companies with multiple profit centers.  A print shop offering duplication services and custom printing under one roof is an example.

CREATION OF A GOVERNANCE HIERARCHY
Does the formation of a board of directors at Good Vibrations damage their status as an ownership organization?  Hardly. Untold numbers of perfectly good worker-owned firms have elected boards of directors to deal with operational and policy issues, not the least of which are the guiding lights of modern-day cooperation, the Mondragon industrial, service, and retail food cooperatives.

However, the questions are: “Who chooses the board members? What power do the bylaws invest in them?  How long does each serve?  And, what oversight do worker owners have to hold directors accountable?â€

CREATION OF A MANAGEMENT HIERARCHY
Having â€bosses†to whom the directors delegate responsibilities for day-to-day implementation of company policies is not a disqualifying circumstance.

In fact, owner-managers are probably a necessity in some ownership firms, particularly those with several hundred owners, or more.  These managers have to acquire some special skills - How do you supervise your boss, a director?  How to you manage by teaching? - but these and related skills are attainable and work well in more than one worker-owned firm.

VALUATION OF THE COST OF MEMBERSHIP BASED ON THE COMPANY’S BOOK VALUE
Most ownership firms charge an affordable membership fee as an expression of ownership. But that is not the only alternative. In the Mondragon cooperatives, most membership fees are the equivalent of one years’ pay, and that sum is paid into an individual account over a varying, but reasonable lengthy period of time. 

We’d argue that a membership fee based on stock value and expressed in the equal ownership of stock among all owners is perfectly viable and in some ways fairer than the commonly used practice of artificially determining a membership fee.

CAVEATS
Having said this, we issue four cautionary notes:

1.    1.If the stock value of the company rises dramatically, it may set the cost of ownership so high that no ordinary worker can buy in, setting in motion “the Northwest Plywood Dilemma†gradually excluding workers from ownership.
2.    Any decision that would allow workers to acquire unequal “say†(such as allowing workers to acquire more than one vote, will create fatal inequities.

3.    If stock is sold to non-workers, unless it is sold as non-voting, preferred shares, the workers may lose control of their company.
4.    If seeking expertise from outside the cooperative’s owner workforce (by electing outside board members, for example) becomes a routine practice, then the cooperative’s primary goals can erode.  Quickly.
5.    Hiring staff from the outside the workforce can be accomplished without compromising the integrity of an ownership rooted in the people who do the work.

Frank T. Adams
Dick Gilbert

EQUAL EXCHANGE TACKLES A SIMILAR CAPITAL PROBLEM

Here’s another company’s resolution of approximately the same problem as that experienced by Good Vibrations. This release is from Equal Exchange.

PRESS RELEASE FROM EQUAL EXCHANGE
“West Bridgewater, MA, May 30, 2006—While other small, growing natural product brands continue to get bought up by large corporations, Equal Exchange – the Fair Trade coffee pioneers – and Wainwright Bank have created a unique, company specific Certificate of Deposit to raise affordable capital for Equal Exchange while protecting the latter’s unorthodox structure of employee ownership. This CD offers small and large investors alike a convenient, familiar way to profitably participate in, and support, the growth of Equal Exchange and Fair Trade. Lastly, the CD further strengthens Wainwright Bank’s already strong reputation as one of the nation’s leading socially progressive banks.

This CD is the latest new idea at Equal Exchange, who just last week was named one of the 2006 SBANE Innovation Award winners for their unconventional, yet very successful, business model. Unlike funds raised by other CDs which go into a general account at the issuing bank, and might help finance a subdivision in Miami or a hotel in Las Vegas, purchasers of the Equal Exchange Certificate of Deposit will know that their investment goes to creating a line of credit dedicated to Equal Exchange’s use. To their knowledge this is the first company-specific CD to be issued in the United States.

Thanks to Equal Exchange’s strong growth – it has grown 100% since 2002, and 700% since 1995 – the worker cooperative needs more cash each year to purchase the fairly traded coffee, tea, and cocoa that it is known for. In 2005 alone the cooperative bought 4.3 million pounds of Fair Trade Certified™ coffee, costing more than $5.7 million.

To understand how the CD supports Fair Trade - Rink Dickinson, Equal Exchange co-founder and President, described it this way:
     'Each time someone buys a $2,000 CD that provides the cash Equal Exchange needs to purchase, at a Fair Trade price, the coffee grown by a typical family farm supporting 6-8 people. Over 100,000,000 Americans drink coffee every day, so even if a tiny fraction of them were to add this CD to their portfolio that would make a huge, direct contribution to supporting small-scale coffee farmers around the world.'

Wainwright will handle the sales and customer service for the CD’s, which are now available alongside other Wainwright financial products. The CD has a 3-year term, a competitive rate (currently 4.20% APY) and a $1000 minimum.  Contact David Dolbashian at 800-444-BANK (2265) or ddolbashian@wainwrightbank.com for more information.

Equal Exchange is proud to be working with Wainwright Bank. Wainwright was a natural partner due to its long history of commitment to progressive business practices and for putting its customers assets to work on behalf of the broader community.

Founded in 1987, Wainwright Bank is a socially responsible commercial bank headquartered in Boston with assets of $780 million primarily serving neighborhoods in Boston, Cambridge, Brookline, Newton, Watertown and Somerville, Massachusetts. Over 40 percent of the Bank’s commercial lending portfolio is committed to progressive community development initiatives including affordable housing, homeless shelters, HIV/AIDS services, community health centers, and environmental issues to name a few. Wainwright’s commitment to supporting social justice issues has been widely recognized including being named one of the 11 Best Lenders to Women in the U.S., one of the Top 10 Best “Green†Banking Firms nationwide, and most recently, ranked 18th among the Nation’s ‘100 Best Corporate Citizens’ by Business Ethics Magazine.

Equal Exchange, a market leader in Fair Trade coffee and other foods since 1986, is a full service provider of high quality, organic coffee, tea, cocoa, chocolate and sugar to retailers and food service establishments. Major customers include Shaw’s, Stop & Shop, Hannaford supermarkets, natural food stores, consumer food cooperatives, cafés, and thousands of places of worship nationwide. 100% of Equal Exchange products are fairly traded, benefiting over 30 small farmer cooperatives in 16 countries around the world. In keeping with its Fair Trade mission Equal Exchange is a worker cooperative, owned and democratically controlled by its employees." Link to Equal Exchange   or to  Wainwright Bank 

STAFF NEEDED

From time to time we get word that a worker-owned firm is looking for someone with an interest in workplace cooperation to fill vacancies in their staffs. We are glad to publish these as well as those from folks who wish to work in a cooperative setting. Contact us using the email link in the sidebar. There is no charge for this service.

Here are two we have this week. Just click on the link and they will appear as a downloadable pdf.    Download Woodshanti.pdf          Download bread_collective.pdf

FROM SHARECROPPERS TO OWNERS: CABS IN VIRGINIA

A few minutes before midnight on June 14, 2005, the Alexandria City Council in Virginia unanimously voted to approve a new ordinance, ending the decades long “sharecropper†relationship between taxi owner-operator drivers and cab companies in the Washington, D.C. suburb.

This brought to an end the first stage of a twenty-year struggle for dignity and economic justice by the predominantly immigrant taxi drivers. “I was excited†said Mulugeta Yimer, one of the leaders of the taxi drivers, adding, “The most important lesson is, don’t give up!â€

While this completed one stage of their struggle, the door for the next step – formation of a worker-owned cab company. The ICA Group in Brookline, MA, had just completed a feasibility study for the drivers that shows that not only is the cooperative economically feasible, but that it will significantly reduce the monthly fees the members have to pay, plus improving they services they receive.

The struggle was led by AUTO, the Alexandria United Taxi-drivers Organization, representing drivers from at least a dozen countries and a wide range of ethnic, religious and racial identities. AUTO was formed in 2002, with the support of the Alexandria Tenants’ and Workers’ Support Committee, to provide a focus for the taxi drivers struggle against discriminatory practices in Alexandria dating back to a previous code change that many citizens perceived favored the companies and one man, in particular, who controlled 58% of city’s taxi commerce.

Until that June evening, the city issued certificates to approved cab companies, providing a fixed number of “car cards†which were then assigned to individual taxi owner-operators. These owner-operators could only operate as a member of their assigned company. They had to pay hefty monthly stand fees, often for little or no service.

As driver Syed Hussein said, “….in 1983 when foreigners started coming into the system they reversed [the rules] and gave all the powers to the cab company and put us into a slavery system. So the driver has no right to say anything.â€

The new rules, which go into in January 2007, end control by the major cab companies, and issue licenses to operate cabs directly to the owner-operators who can choose which company to affiliate with. They also put in place a process under which new cab companies, including a worker-owned cooperative, can be formed.

Croneyism is not entirely dead however. The law limits the number of owner-operators that can leave any company in any year, thus restricting the speed with which the cooperative can grow, and the local contracts covering transportation of school children, seniors and people with disabilities have all been let on long term contracts.

The new cooperative will open for business on January 1 2007, the earliest possible date under the new legislation, and will provide its members with a round-the-clock radio dispatching system 365 days a year, a Global Positioning System which will automatically alert and assign the nearest free cab to any new customer, and in-cab credit card processing.

Initially the radio dispatching system will cover Washington DC, the greater Alexandria area and Regan National airport. Within two years the cooperative’s reach will extend to cover Dulles airport. Most importantly, for the members the company will operate in a non-discriminatory manner, reduce monthly stand fees by 25% in year 1 and 53% in year 4 from their current levels, and be a company that they own and control.

The members are excited about their new cooperative and full of ideas about improving the services they offer. Potential member Abbass Abousaidi sees the cooperative providing a small supplemental fee to drivers dealing with clients with disabilities and thus changing a difficult assignment to a more rewarding one and improving customer service. “ The driver, the customer, city hall, everyone will come out ahead!â€

Another potential member, Tesfay Berhane, said enthusiastically that he’s “…been excited about this from the beginning. I realize that we need to be able to offer an alternative and provide the service if we want people to trust us. We will take responsibility, and take this seriously†For additonal information, download this article by Monique L. Dixon.

Outdoor Retailers Stave-Off Big Box Stores Through Cooperation

Across the United States, even around the world, small, often locally owned retailers, are confronting the ever-expanding number of big-box retail stores modeled on Wal-Mart.  Hundreds of retail stores have shuttered their doors when “the Big Boxes†come to town.  Thirty-one outdoor retailers are thriving, as the following report by Janet Hurley, shows.  To learn how Wal-Mart, in particular, uses buying clout to shut down retail shops, order the DVD Wal-Mart: The High Price of Low Price which can be ordered on-line at http://www.walmartmovie.com.  Coming soon to a Wal-Mart near you: health clinics for customers and employees, and the branch of an industrial bank Wal-Mart is setting up that will allow the giant firm to process credit and debit cards, keeping the fees now paid to other banks.
- Frank T. Adams

ROI, Inc. - Retailers of the Outdoor Industry

By Janet Hurley

In 1994, five independent outdoor retail shop owners decided that it was time to let the world know that they weren’t just a sub-set of sporting goods.

The entrepreneurial shop owners who founded Retailers Outdoor Industry, Inc., were Tom Valone of The Great Outdoor Provision Company in Raleigh, NC, Dave Baker of the Summit Hut in Tucson, AZ, Walter Wakefield of the Whole Earth Provision, Co. in Dallas, TX, and Joe Roper and Lawrence Migliera of Outdoors Inc., Memphis, TN.
They believed they could level the playing field with big box retailers through joint buying power and shared knowledge.  Further, they could market their common belief that customers deserve to buy the best and most innovative products from trained sales staff that actually use the products they sell.  ROI was incorporated in Texas in December, 1994, as C-corporation.  For the first three years, Baker ran the corporation from the back of his Tucson store.

In 2005, the 31 ROI members had combined gross sales of over $120 million.  They run 69 storefronts, employing over 700 people. 

The ROI office is now in Asheville, NC, where David Matz is president of the cooperative and works with a very active 7-member board of directors who serve 3-years terms and who must hold voting stock.

Matz says ROI members exemplify excellence in the outdoor industry: great locations, superb merchandising, strong relationships with vendors, pioneers of new products, early adopters of new technology, promoters of outdoor sports and environmental conservation.  These retail owners and their sales staff use the gear and clothing themselves, as outdoor sports enthusiasts, and are committed to excellent customer service.  Fiscally, the members must be absolutely sound.
“We want stores that have paid all of their bills on time, all of the time, for a long time,†Matz says.  “We know that there are probably only 50 retailers in the country who can meet our financial criteria, and they must continue to meet those criteria in order to remain a member.  It is critical for our ability to guarantee payment to vendors, to keep our credibility strong.â€

For the remainder of this article on ROI click on Continue Reading (below). A link to the ROI website is found in the Co-op Links section of the right sidebar.

LEAF, A FUNDS SOURCE FOR WORKER OWNERSHIP

Jim Megson, executive director of the Local Enterprise Assistance Fund, based in Brookline, MA, and is its affiliated organization, The ICA Group, expects that one day soon LEAF will become the national lender of first choice for worker cooperatives throughout the United States.  So does his board of directors.

LEAF’s investment portfolio, as is evident in this abridged 2005 Annual Report, reflects this core policy.  LEAF makes loans for start-up worker cooperatives, or conversion of established firms to ones workers own and manage.  Most LEAF loans are made in high-risk localities, and usually in partnership with more traditional investors. 

According to Megson, LEAF wants to be considered the lender of first choice for workers looking for financing, the banker for the growing movement for asset-based social change, and the financial source for creating new jobs.
    - Frank T. Adams

By Jim D. Megson

As a community development fund focusing on growing the cooperative movement and particularly worker-owned cooperatives, LEAF strives to maximize the impact of its investments.

We focus on those opportunities that traditional investors either do not find attractive, or where they are only willing to invest if we are there to reduce their risk. Many of the projects we finance would not happen without LEAF.  And LEAF would not be there for them without donor support. In 2005, LEAF invested a total of $440,000 in 8 cooperatives, 7 of which are in areas the US treasury considers high risk, and all of which would not have received financing without LEAF’s participation.

Activities during the past year

During the 12 months ended 31 May 2005, LEAF invested a total of $440,000 in 8 cooperatives. These investments were

Navasew Apparel LLC in Montezuma Creek, UT. A $50,000 loan from LEAF in May 2005 leveraged a further $400,000 in capital from the Navajo Nation’s Division of Economic Development, enabling the cooperative to expand from 14 employees to 94 employees. The employees own 79% of the company with the remaining 21% being owned by their partner, Omega Apparel, which has significant experience in government contracting for apparel manufacture. Utah Governor, Jon M. Huntsman, Jr., welcomed the expansion, stating that “Utah is excited to add these stable jobs to our workforce, especially in an area of the state that has 40 percent unemployment.†The expansion also attracted attention from the media.

Inkworks Press in Berkeley, CA.  Inkworks is a 21 person worker-owned and managed union print shop that uses only vegetable-based inks and 100% recycled papers and is certified as a Green Business. They offer discounts for peace and social justice organizations. LEAF provided them with a small loan to buy new equipment and upgrade their computer server network.

Enterprising Staffing Services, Washington, DC. This company is one of four developed by ICA under its staffing services initiative. LEAF made an additional loan to this company to finance its accounts receivable as it grows.

New Source Staffing, Newark, NJ.  LEAF made a second equity investment in this community-based staffing company, the latest to be developed under ICA’s staffing services initiative.

>Win-Win Cleaning, Dorchester, MA. We made a second investment in this cooperative to enable it to expand and take on a major new contract. Win-Win is structured as a marketing cooperative whose members are small 1-3 people cleaning businesses. We believe that this structure that uses a central, cooperatively-owned, marketing and billing operation could serve as a blueprint for enabling many small micro-businesses to grow. Progress has been slow but the company now provides employment for about 13 people.

People’s Food Co-op, LaCrosse, WI. The cooperative is the only major food store in downtown La Crosse, Wisconsin. LEAF participated with a local community development loan fund, to provide a total of $600,000 subordinated debt financing (more than they were able to do alone) that enabled this cooperative to double in size and create 36 new jobs. The area is designated as a Qualified Investment Area.

Lexington Food Cooperative, Buffalo, NY. LEAF provided $100,000 of subordinated debt and helped the cooperative locate other sources of financing that enabled this very small natural foods cooperative move to a new site and triple its size. The expansion has been completed; the cooperative is growing as planned; and 20 new jobs have already been created. Over the next year the cooperative anticipates adding a further 20 jobs. This cooperative is located in a Qualified Investment Area.

Colors Restaurant, New York, NY. The employees of the Windows-on-the-World restaurant at the World Trade Center are opening a worker-owned restaurant, COLORS, at 417 Lafayette Street, one block off Broadway, in New York. LEAF is participating in the financing of this venture that is being led by a consortium of Italian cooperative restaurants. COLORS will employ approximately 100 worker-owners. (Ed. note: see the Recent Archives section for more on Colors)

Much more on LEAF and it's activities is available by clicking on Continue Reading below. To visit both ICA and LEAF's websites, you'll find a link in the Support Organization section of the sidebar to the right.

EQUAL EXCHANGE COLLBORATES AND THRIVES

Rodney North of Equal Exchange sends this year-end report. The collaboration with coffee growers is an innovative wrinkle to an already distinguishd performance by this Ownership Organization. See our prior article On Equal Exchange in the January 16, 2006 archive to the right. You'll also find an EE link in the Co-op Links section of the sidebar.

2005 YEAR END NEWS

▪ Equal Exchange continues to enjoy strong growth. 2005 sales were $20.76 million, that’s 26% over ’04, and our 3rd consecutive year of 26% growth. We’ve now doubled in size in just three years. 2002 sales were $10.1 million.

â–ª Inauguration of our new $1.7 million state-of-the-art coffee roaster

â–ª Imported 4,500,000 million pounds of Fair Trade Certifiedâ„¢ coffee, a 22% increase over 2004.

â–ª Our worker co-op continues to grow apace, too. We now have 68 worker-owners, with more in line to join. This makes us probably the 6th largest worker co-op in the country, and maybe the fastest growing of those six.

â–ª Part of that new growth has been from the new line of organic, Fair Trade chocolate bars we introduced in the Fall of 2004. We have already sold over 1 million bars.

On the Financial/capital fundraising front
▪ We’ve had our best year ever in raising outside equity, totaling over $800,000 in ’05. We now have over $3.7 million in outside equity.

▪ Some of that success came from our new partnership with Trillium Asset Management. In just the last quarter of ’05 they helped raised approximately $320k in equity investments.

â–ª In the last week of 2005 we swapped approximately $50,000 of class B stock for 37,500 pounds of certified organic coffee with one of the coffee farmer co-ops that we have traded with for years, CECOCAFEN in Nicaragua.   

Note: a little over a year ago, another co-op trading partner of ours, CEPCO, in Oaxaca, Mexico, also purchased $100,000 in class B equity from Equal Exchange. We know of no other such investments by coffee farmer co-ops in North American coffee importers or roasters.  It certainly says a lot about their confidence that we are working on their behalf.

New products, initiatives, etc. in 06:

• January:       Black Silk Espressoâ€.
• Feb:             Launch of the Equal Exchange-Wainwright Bank Certificate of Deposit
• March:          Switched website to www.equalexchange.coop.
• March:          In-store espresso bar in Seattle supermarket .
• March:          Dark Chocolate “minis†55% cocoa (.16 oz each).
• By Summer:  3 new teas, including from Sri Lanka and South Africa.
• July 14/15th:  20th Anniversary events.
• Fall:              3 new chocolate bars; cocoa nibs, espresso, and mint crunch, and                        our first domestic Fair Trade products.
  

CONTACT: Rodney North
The Answer Man – information for the Public & Media
(774) 776-7398
Rodney@equalexchange.coop 

ISTHMUS ENGINEERING-ONE OF VERY FEW HIGH-TECH OWNERSHIP BUSINESSES

Isthmus Engineer & Manufacturing, Inc., in Madison, WI, has evolved since the firm's founding in 1980 into one of the few workers' cooperatives using direct democratic decision-making rather than the more common representative governance ideas sparked by the Mondragon cooperatives. How and why this came about is explained here by John W. Kessler, a founder.  A guiding impulse since Isthmus' beginning in 1980 has been to be fair and equitable. As a result, Kessler writes, this has meant constant change, discussion, disagreement, and reconciliation

ISTHMUS HISTORY
John W. Kessler

Isthmus started in January of 1980 as a partnership of four people: Tommy Wachal, Wendell Hottmann, Mara Zimmerman and John Kessler.  Wachal, Hottmann and Kessler had worked together as employees at Backey and Associates, a family-owned engineering company in Madison.  The original Isthmus office was located in an old house at 320 Russell Street on Madison’s east side.  For the first 14 months Isthmus was strictly a contract engineering business, doing design work for Gilman Engineering in Janesville and RayOVac Battery Company in Madison.  During this period, Isthmus worked with a dozen or more contractors including Greg Hottman, John Kohl-Riggs and Dave Tabaska. 

In March of 1981, the partnership was expanded to nine people including two machinists: Randy Kohl and Don Parmer.  The company rented space in the old Gisholt Lathe Co. building on East Washington Avenue and outfitted it with a basic complement of used equipment.  A discontinued model Wells Index four axis CNC milling machine was the single piece of new machinery in the shop.  Job number 118, a set of battery beading dies for RayOVac was the first fabrication job Isthmus completed.

By the fall of 1981, it was becoming obvious that a partnership had a number of serious limitations for a growing company in the business of building machinery.  The
most serious of these was the fact that in a partnership, there was no legal separation between the business and the owners.  If someone were injured while operating a machine made by Isthmus and sued the company, all the personal assets of all the partners could have been lost.  Incorporated businesses on the other hand have the protection of the corporation between the owners of the business and liability for the actions of the business.  This is true of standard corporations, subchapter S corporations and in Wisconsin and a number of other states, cooperative corporations.   Democratic control of the business was another characteristic that was considered essential as a result of the distinctly undemocratic nature of the family business that had previously employed five of the partners.  These were the primary motivations for investigating alternative business structures, which at the time were more limited than what is available today. 

Three of the partners attended a seminar on cooperatives at the University of Minnesota Law School in November 1981.   This seminar provided the inspiration and introduced Isthmus to the legal experts that guided the formation of Isthmus Engineering and Manufacturing Co-op.  Much of this inspiration came from a BBC television documentary called the Mondragon Experiment.  This 50-minute program showed engineers, production line workers, machinists and ordinary working people democratically organized into the most successful group of businesses in Spain.

This film showed that it was possible to make a democratic organization work and the speakers at the seminar explained how it could be done.  The most impressive of these speakers was a distinguished elderly Minneapolis attorney named Melvin D. (Doc) Zeddies who had organized a number of worker co-ops in Minnesota including bicycle shops, electronics repair shops and construction companies.  Zeddies had worked with Minnesota agricultural co-ops for decades and used this background and his knowledge of co-op law to lay the legal groundwork and set the legal precedents to give worker co-ops solid foundations.

Additional investigations revealed several financial advantages that co-ops had over standard corporations in addition to the functional advantages.  In Wisconsin, cooperatives are exempted from state income taxes; they do not even need to file.  In addition, co-ops enjoy considerable flexibility in determining what year income is passed to the members and when the members have to pay taxes on that income.  At the time, there was also a 1% advantage in the amount that co-op members as independent contractors had to pay in Social Security taxes (this has since disappeared).  Added to this were other minor tax advantages that cooperatives had over other corporations.   

Throughout 1982 the partnership of nine worked with Zeddies and a number of other consultants in the Minneapolis area to put together the framework for a cooperative engineering company and draft a set of by-laws.

In December 1982, Isthmus Engineering and Manufacturing Cooperative was officially incorporated.  Eight of the nine partners became members of the co-op, each purchasing $3,000 worth of stock as an initial buy-in.  The Co-op signed promissory notes with the four original partners to repay the money they had invested to start the business.

The original by-laws had been pieced together using examples from other worker co-ops around the country.  However, they were assembled without a clear idea of how Isthmus was going to work and many of the examples came from states that did not have a comprehensive Cooperative Statute like Wisconsin’s.  Much of the language of the original by-laws turned out to be legalistic and inaccurate at describing the organization into which Isthmus evolved.  For example, the original by-laws described a business government similar to that used in most co-ops and almost all capitalist businesses, in which the stockholders (members) would elect a board of directors to run the business.  In this structure, the majority of the members would only have the opportunity to vote for a board of directors and would have little say in the day-to-day details of running the business. 

In reality, at Isthmus, none of the eight original members had any desire to step off the board and let the other members run the business, so the co-op began with all members sitting on the Board of Directors.  As more members were added, it was assumed they too would sit on the board.  This became standard procedure, but the by-laws were never re-written to address this change.

Over the years, many other thorny issues that were impossible to anticipate at the beginning have been addressed and dealt with in ways that are fair and equitable within our unique structure.  These issues include the process for becoming a member, the process for terminating a member, the way in which the proceeds are distributed, the role of the general manager and sales manager, the way in which meetings are conducted and the way members review the conduct of other members.  All of these issues and many more that had been hashed out through years of discussions and trial-and-error was addressed in the first major re-write of the by-laws, which was formally accepted in January 2002.

For much more detail, click on "Continue Reading" (below) and on the Isthmus website in the sidebar to the right.

EMPLOYEES BUYOUT LONG-TIME MANHATTAN RESTAURANT

Just on the fringe of the Manhattan theater district you’ll find Rene Pujol Restaurant, a worker cooperative specializing in authentic French cuisine.

The restaurant was founded in 1970 by Rene Pujol, with his wife Helene. It was their goal to operate a fine dining establishment that would serve the pre-theater dining community as well as the Midtown businessmen searching for an elegant place to meet clients for lunches. As the New York restaurant industry expanded, Rene Pujol Restaurant thrived.  Over time, the Pujol family expanded its business into two main dining rooms, two private party rooms on the second floor, and a European-sized kitchen.

Then Rene Pujol decided to retire. Instead of selling the business to an outsider, he chose to offer it to Executive Chef, Vincent Purdy. Realizing that he couldn’t do it alone, Purdy presented an unusual proposition to the front and back of the house staff; to buy the business as a group and run it as a worker cooperative. He reasoned that, by running the house as a cooperative, all employee could take responsibility for running the business and share in the  rewards of its success.  The employees agreed and the Rene Pujol Restaurant Cooperative was born.

Here’s their mission statement:

“We at Rene Pujol Restaurant Cooperative, serve the community by getting our customers to the theater on time while providing them with classically prepared French food served in an elegant setting with a prix fix menu at a reasonable cost.  We strive to create an oasis of calm at the center of the noisy and crowded restaurant world, a place where many come to have quiet conversations and intimate dinners.  At the same time, we, as a cooperative, see our mission to provide excellent service with fabulous food connected to our vision of a worker-owned workplace.â€

Visit their website in the right hand sidebar and stop by when you’re in Manhattan!

FROM THE RUINS OF 9/11, A NEW COOPERATIVE

On 9/11 the world fell in on the surviving staff of the famed Windows on the World Restaurant in the World Trade Center. 76 of their co-workers (the on-duty staff) lost their lives in the violence. Not only did they lose their many friends, they also lost their livelihood.

Last month, just a walk from the site of the WTC, those surviving employees are opening Colors, a new international restaurant in memory of their fallen comrades. The restaurant, staffed by people from more than 22 nations, will serve the native cuisines of that diverse staff.

Funding for the startup was secured from Good Italian Food, a consortium of Italian cooperatives, from Restaurant Opportunities Center of New York (ROC-NY), which was also instrumental in helping the workers secure $1.2 million dollars from the Non-Profit Finance Fund (which the secured the financing of 15 separate lenders).

The new cooperative has 50 employees.

The opening of this business has received extensive media coverage. Here are links to AOLnews, The Philadelphia Inquirer and New Jersy,com  Visit the ROC-NY website in the Support Organization section of the sidebar to the right

EQUAL EXCHANGE, ANOTHER MODEL OF OWNERSHIP

The worker-ownership movement has many faces. In addition to the variety of businesses in which we engage, we also vary greatly in the ways we express ownership in our political and operational structures. Equal Exchange is one of the companies that opens ownership (but not control) to those who are not workers. Recently, Rodney North of Equal Exchange summarized their ownership and managerial structure in the following brief description.

“At Equal Exchange we not only extend employee-ownership to everyone, but we also try to deepen employee-ownership.

Our nearly 20 years of working on this can be seen in two main ways:

First, worker-owners like me have not only equity, but also possess a rare amount of control. For example, the 64 worker-owners nominate and elect the Board of Directors. Any worker-owner may also run for six reserved seats. (I happen to be one of the six. We also elect three outside directors.) The worker-owners, and their elected representatives on the Board, are also the ultimate authority on the largest issues, such as amending by-laws, our compensation philosophy, and adding operations. This worker-control really came to forefront in the last couple of years with our deliberations over taking on debt to expand, and to relocate from our former Canton location, both of which were eventually approved and successfully executed.

Second, at Equal Exchange, as at other Massachusetts co-ops (such as Red Sun Press in Jamaica Plain, or the South Mountain Company on Martha’s Vineyard) we try to make ownership democratic. Therefore, we operate on a one person/one share/one vote basis (in sharp contrast to ESOP’s). Whether one is a founder, or a new warehouse worker, one wields just one vote. The best analogy might be that of a small town. Regardless of rank, each person wields the same weight at the polls. Each may run for a position of leadership. And everything is conducted as transparently as possible.

And like some towns (my hometown of Cambridge for example) the elected leaders hire a professional manager. (We actually have co-managers, but that’s incidental.)

Tthe presence of professional managers, who head a pretty traditional management hierarchy, with a pretty conventional division of responsibilities, helps to keep things moving along. So while’s its true that democracy takes time (and practice, and extra meetings) we’re glad to show that not even deep workplace democracy is incompatible with business success. In fact, even at 20 we remain one of the fastest growing private companies in Massachusetts according to the Boston Business Journal. We’ve also been profitable for 15 of the last 16 years.â€

For more detail on a unique mix of ownership and investment which includes suppliers in their ownership model, open the download below. To learn more about Equal Exchange, visit their website (link in the sidebar to the right).

Download equal_x.pdf

CITY GOVERNMENT CAN ENABLE INNER CITY, GRASSROOTS ECONOMIC INITIATIVE.

Many believe that the future of worker ownership in this country lies in the ability to harness the strategic and financial resources at all levels of government.  Ajamu Nangwaya sends this very detailed article on enlisting city governments in the successful development of inner city economic resources. Here is his introduction.

Greetings,
The article represents the way in which the guardians of capital are viewing the inner city or America's internal "emerging market".  The cooperative economic and workplace democracy options should be at the forefront of the assault on economic marginalization and underdevelopment in the ghettos, reservations, rural communities and barrios.  Those of us who are committed to a transformative form of economic development have essentially given the key to the city to the economic barbarians.  Community-based education and organizing are thankless activities but they are essential to the victory over economic enslavement and alienation.

The inner city must become a strategic center for workplace democracy advocates and organizers.  Capital is preparing to enter the inner city and in some cases have established beachheads, but I believe that it is not too late for us to challenge the normative approach to economic development.  The article below should give an idea of what is at stake.  It is interesting that the writer points to ESOPs and not worker cooperatives as instruments for worker ownership and management.

Ajamu

Download the complete article.   

Download ajamu_inner_city.pdf

INKWORKS: A GREEN, PROGRESSIVE PRINT CO-OP

INKWORKS PRESS is an employee owned and managed printshop founded in 1974 and located in Berkeley, CA. We are all union members and our business is certified as a Green Business by the County of Alameda. There are twenty on our staff, fifteen of whom are member-owners.

Inkworks began as a project to provide high quality, but affordable printing to the social justice and peace community of the San Francisco Bay area. As the non-profit sector grew to a significant economic force Inkworks’ reputation for service made it the obvious choice for many organizations with limited financial resources, but extensive needs.

Unlike the typical printing business we print a wide range of items from business cards to books. We have stayed current with the latest technology and can develop an idea into a final printed piece and have it printed in the “greenest†manner possible. We stock only recycled paper and use only vegetable oil based inks.

When possible we join forces with under-funded social change organizations to collaborate on publishing projects that we can print at a discounted rate.

Internally we make major decisions like hiring, or expensive purchases on a consensus basis at twice monthly meetings. Most simpler managerial decisions are passed by super-majorities to speed the process. We divide our shop into four managerial areas to administer daily operations, besides we have several committees to attend to specific tasks like Personnel issues, Plant maintenance, Health and Safety and so forth. The shop has two overarching groups leading it: a three member Steering Committee which is composed of all members on a rotational basis and a four member Management Group with job role membership. The former deals with the more “collective†and political issues of the group, while the latter handles the business end.

Four years ago the designers who worked at Inkworks created their own design coop called Design Action Collective who are   now a major income source as they bring their design projects to Inkworks for reliable printing.

For the future Inkworks would like to use this model of affiliated coops all linked to provide a full range of media services to the community, from buttons and bumper-stickers to web-design and video presentations. We are currently exploring the establishment of a copy shop modeled in part after the highly successful Collective Copies cooperative in Amherst, MA.

Inkworks is an active member of the Network of Bay Area Worker Cooperatives (NoBAWC, pronounced No Boss!)

Find links to Design Action, Inkworks Press, and NoBAWC. in the Co-op section of the sidebar to the right.

EQUAL EXCHANGE, A FAIR TRADE COFFEE CO-OP

Equal Exchange, a pioneer and U.S. market leader in Fair Trade coffee since 1986, is a full service provider of high quality, organic coffee, tea, cocoa products and chocolate to retailers and food service establishments. Their customers include supermarkets, natural food stores, consumer food cooperatives, cafés, restaurants, and thousands of places of worship nationwide. 100% of Equal Exchange products are fairly traded, benefiting 27 small farmer cooperatives in 16 countries around the world.

In keeping with its Fair Trade mission Equal Exchange is a worker cooperative, owned and democratically controlled by its employees, presently numbering 55 with 15 additional workers in the ownership process. The company is an ownership hybrid with some non-worker, non-voting shareholders. Since its inception the company has been profitable in every year but one. It typically pays a 5% annual divided to all stockholders. In addition to their Massachusetts headquarters, the company has an office in Hood River, Oregon.

A commitment to Fair Trade has existed as the core value and framework from which the company has been built. There are a number of different ways to interpret what is fair. However, it stands to reason that the people who grow the coffee we drink in the morning should not be condemned to live in poverty for their efforts. The Fair Trade Model is not limited solely to beverages. It can and is used for food, clothing and crafts.

Equal Exchange's Guiding Principles
•    Trade directly with democratically
        organized small farmer cooperatives.
•    Provide producers with advance credit
         for crop production.
•    Pay producers a guaranteed minimum
         price that provides a stable source
         of income as well as improved social
         services.
•    Provide high quality food products.
•    Support sustainable farming practices.
•    Build a democratically-run cooperative
          workplace.
•    Develop more environmentally sound
          business practices.

The easiest way to support Fair Trade is to purchase fairly traded products. Our actions as consumers support or discourage actions by businesses. By making the choice to buy fairly traded products we help provide health care, education and a better lifestyle for farmers, workers, and artisans around the world. Look for products produced by Equal Exchange or other Fair Trade vendors and join millions of other socially conscious consumers across the United States in becoming a "fair trader."

The company, very committed to the Fair Trade ethos, has recently objected to the entrance of Proctor and Gamble and Nestle into the Fair Trade market due to the seemingly token nature of their Fair Trade product launches. To see why here’s a link to Rodney North’s article in CSRwire and to the co-op's press release regarding Nestle see this link.  Also check out the Equal Exchange website listed in the Co-op section of the sidebar.

BIG TIMBERWORKS: MONTANA OWNERSHIP BUSINESS

There is hardly a living space quite as restful and welcoming as a well-designed timberframe house. A timberframe allows a spaciousness/openness and an almost mystical connection to the abundance of natural wood with which it is constructed. The sheer symmetry and design of the dwelling makes living in a timberframe a unique and durable experience.

In the high valleys and plateaus just north of Yellowstone Park on the eastern face of the Rocky Mountains is a worker-owned company specializing in the design and construction of unique timberframe homes. There are few companies that can produce that experience with more skill and commitment to the craft of designing and building them than Big Timberworks (BT).

This creative company not only designs buildings in close collaboration with the building owners, but it manages their production from the sawing and dimensioning of timbers, cutting and preparing for the joining of post and beam members, to the manufacture of unique, panelized wall sections to fit in the beam structure at their final assembly on the building site. Additionally, if you would like a one-of-a-kind entrance, stairway, mantle, railing or furniture for your new or existing dwelling, BT is your company!

On a 2002 visit to BT, I was amazed to learn that most of the wood used for the timberframes (and other components) is salvaged wood from old structures being torn down to make room for new buildings (or other land uses). Much of the BT property is a yard for amazing timbers taken from these buildings; timber which, because of its size and length, could hardly be found in the new-wood market today. Once nails are removed, the timbers are re-sawn for use in new buildings. Some customers prefer the timbers not to be sawn, but used as is. In their commitment to listen to their customers, BT even designed a house that while perfectly square, looks decidedly lopsided from the street!

Founded by Merle Adams and his partner in 1983 as a log home company, the company gradually segued into timberframe construction. Sixteen years later and concerned with the future of the business, Merle decided to sell the company to its workforce (including Merle). Then they hired a new CEO and Merle himself specialized in design and development. Today there are 40 plus workers in the company; about 20 in the shop, 6 at construction sites, 6 in wood milling and re-manufacture and 10 in design, management and support.

As unique as their product and company is the BT value statement:

“Listen. Care. Create.

Listen again.

Respect the environment.

Respect quality.

Create new life from old wood for generations of lasting joy.

Respect and fulfill as many dreams as possible.
Be grateful for people, opportunities, dreams and possibilities.â€

Dick Gilbert

You'll find a link to the BT website in the Co-op section of the sidebar to the right.

SOUTH MOUNTAIN COMPANY: REMARKABLE OWNERSHIP BUSINESS

Founded by John Abrams in 1975, South Mountain Company (SoMoCo) converted to worker-ownership in 1987. Now this 30-worker, design-build company, specializing in a combination of single-family residences and affordable housing, does six million dollars in annual business. Located on Martha’s Vineyard off the coast of environmentally stressed Cape Cod, they concentrate on sustainable, “green†building practices in every every aspect of their work, including siting, landscape, materials, waste, daylighting, and energy and water use.

Space does not permit a full description of what they do, but consider these:
•    Whenever possible, they use reclaimed materials in their buildings. At this point 90% of the interior and exterior  materials in their office/shop buildings are salvaged.
•    They have designed a house that is a net energy producer and part of their business is supplying and installing solar and wind equipment.
•    The company donates 10% of its net annual profit to charitable organizations and is considering increasing that amount.

Want to learn more? Here are two links that highlight SoMoCo’s work: one from Custom Home Online  on the net-energy-producer house, another from the Martha's Vineyard Times  describing the company in more general terms. Also here is an article  Abrams co-authored with Merle Adams of Big Timberworks, also an ownership business.

Additionally, Abrams has recently released his new book: The Company We Keep: Reinventing Small Business for People, Community and Place. Find the link in the Book section of the sidebar on the right. If you wish, you can order it directly from Amazon.com by clicking on the book's title. In a future issue we’ll review the book for you.

John has graciously sent some material from The Company We Keep. The article tackles the issue of what limits ought to be placed on a company's growth and how those limits might be accomplished. Download the article here.

Download Abrams2.doc

Finally, we have included a link to the SoMoCo website in the Co-op Links section of the sidebar

NEW ORLEANS ALTERNATIVE BUSINESSES MAY BE KATRINA VICTIMS

We have just received two communications concerning the well-being of the businesses of workplace activists in New Orleans. We pass them on to you with some links that may be able to reach them.

From Len Krimerman:
In April 2003, Bob Stone and Betsy Bowman of GEO held an all-day conference with some 50 workplace activists in New Orleans. They have asked us to send you the contact information for some of the groups/co-ops, which gathered there. They are almost certainly in dire straits and in need of assistance.

1. A co-op bookstore/lending library. Liberty Eddink: stackabones@hotmail.com
2. A NATURAL food co-op with workplace democracy. John Calhoun: johnalgusto@hotmail.com
3. An urban gardeners’ co-op. Darlene Wolnik, New Orleans Food and Farm Network: <noffn@yahoogroups.com>
4. Cyberspace Central Computer Consultants (C4); (504) 896-TECH [504.896-8324]; nfo@896tech.com. Ian Johnson and Jeff Brite of C4 attended the founding USFWC conference in May, 2004; C4 street address was then 807 Delachaise St., NOLA. 70115.
5. Plan B Bicycle Co-op/Jason Neville/2617 Burgundy, NOLA 70117, tel 945-2835; transit@rox.com
6. Invest Construction/Malik Rahim/331 Atlantic Ave., NOLA 70114, tel 477-3756; Malikinvestconstruction@yahoo.com
7. The main local organizer of this GEO conference was: John Clark/7725 Cohn St., NOLA 70118, tel 504-865-2128  clark@loyno.edu

From Ajamu Nangwaya:
Greetings,
There are organizations that will be receiving funds to aid communities affected by the disaster whose paws should not get close to these funds.  How can we put in place measures to get these resources to organizations on the ground that are more accountable to the local communities in which they are located?  There will be a lot of disaster relief vultures hovering over the incoming resources to meet their own organizational ends.

We should alert organizations in New Orleans with the organizational capacity to promote economic development of the existence of this fund.  This source of financial assistance could be used to promote the creation of worker cooperatives and other cooperatives that will aid the oppressed of New Orleans.  We have to look at long-term solutions, and once the disaster relief stage is over, the reconstruction one will commence and progressive organizations should be looking at ways to exercise the "preferential option" for the economically marginalized.  The worker cooperative can and should be a part of the  solution.

CDF seems to be looking at farmers' cooperatives but New Orleans is a city, which suggests that the approach to reconstruction should be broadened to encompass the realities of urban life (e.g., the need for housing, daycare, worker and food cooperatives).  A conversation with CDF is in order because this must certainly be an oversight on its part.  Why is there a focus on rural economies when the major disaster area is an urban one?

EASTERN CONFERENCE TAPES AND CDS STILL AVAILABLE

At the first Eastern Conference meeting in 2002, Aurora Productions, an Ownership Business (worker-owned), made extensive recordings of each of the workshop and plenary session. Of particular relevance is the address by Gar Alperovitz of the University of Maryland’s Democracy Collaborative. Its title: Movement Building and the Future of Workplace Democracy. These recordings are as timely and information-packed as the day they were recorded.

Tapes and CDs are still available from Aurora, itself a worker-owned company. Download the description, contact information and price list here.

Download

PARAMEDICS REPORT FROM THE HEART OF KATRINA

Two paramedics, Larry Bradshaw and Lorrie Beth Slonsky, were attending a conference in New Orleans.  They found themselves trapped in New Orleans by Hurricane Katrina. This is their eyewitness report.  Their experiences once the storm moved on reveal how deeply cooperation is a embedded in human nature.  And how often this natural instinct is thwarted by authority. 

Download Katrina.pdf

WAGES CLEANING COOPERATIVES ENTER THEIR FIFTH YEAR

WAGES - Women's Action to Gain Economic Security  - was formed in 1995 as a non-profit education center to focus on preparing low-income, chiefly Hispano women, for ownership and management of worker-cooperatives.  The idea was to spin off groups of 6 to 12 women once they settled on the kind of business they wanted to be in, had a business and marketing plan to go along with their interests and skills.

Four years later, Emma's Eco-Clean, a house- and office-cleaning service using only certified "green" cleaning products, was underway.  Their first years were tough.  Gross sales totaled $45,000.  Their 2000 year-end gross was $201,000 with 12 owners, and a handful of substitute cleaners, trained and ready to fill-in for owners.  Emma's now has its own website. 

Following in rather quick succession were ECO Care on Earth Day, 2000 with 12 owners.  They won the Sustainable San Mateo County Award in 2003.  WAGES also got Natural Home Cleaning Professionals operating in Oakland, as well as a retail eco-friendly supply store before turning 10 years old itself!

SFGate ran a good article on Emma's and other WAGES cooperatives. Wages (see sidebar for a link to their website) also carries information on these cooperatives on their website.

BEYOND THE COMMONS by Bernard Marszalek

The idea of the Commons sprang to life at the outset of the Enclosures in Great Britain as British noblemen consolidated their lands, ousting women, men and children from homes and away from tiny plots where their families had grown vegetables, in many cases, for hundreds of years.  Most were forced into ever-enlarging cities, or into villages with mining or textile mills.  As a sop to those who stayed behind and to keep them from revolting against their betters, the noblemen often gave over one or two acres of land for “the common good.† They also hired guards to keep the peasants from poaching, or trespassing on their lands.

Gerrand Winstanley was among the first of the commoners ousted from his home and pitifully small parcel of land to take action.  He and a few other equally impoverished friends planted corn and potatoes on the Commons in their nearly deserted village.  Within days, militia on horseback trampled the Commons into muddy mire.  He tried again and again, thus forever linking the Commons with the Diggers.

Here, Marszalek argues that Argentinean workers, starting with Zanon Ceramics, broke in the locked gates of factories they’d worked in order to re-start the businesses because their bosses, the owners, accepted public monies to keep their business afloat.  He also makes the argument, as did author William Grieder recently, that public workers retirement funds should be invested in local economies, again extending the historic idea of the Commons.  Finally, he analyzes the differences between ownership and that of labor’s control of capital and democratic participation in its management.

Marszalek is a long-time worker at Inkworks Press in Berkeley, CA.  He can be reached at  bernardm@inkworkspress.org 
Download beyond_the_commons.pdf

The Cheeseboard Collective Logs 30+years, helps create spin-off bakeries

Arguably the oldest worker cooperative in the United States is the Cheeseboard Collective of the San Francisco area. This most remarkable organization, is managed without designated managers, assigning those responsibilities to rotating committees thereby insuring that all members have a variety of skills.
Their success is measured in part by the fact that they, despite being in a traditionally low-wage industry, are able to pay themselves the equivalent of almost $30 an hour for their work. Add to that their impressive efforts to help replicate their successfull business model in other California communities. As a result, Arizmendi Bakery and The Cheeseboard Pizza Collective are now well established and at least one more new bakery cooperative is up and running in the Bay Area. The Collective did that without recompense to themselves or any financial interest in the spin-offs.

We have included links to to the websites of three Cheeseboard companies in our Co-op Links section. In the books section (in the sidebar) you will find a "The Cheeseboard: Collective Works", a book we highly recommend to home bakers and to folks interested in how worker-owned businesses work. Finally we are able to offer this excellent article from the Berkeley Daily Planet and a second from Common Ground magazine for those who wish to learn more.

Minneapolis Worker-owned Cafes Earn High Praise

Concept restaurants and workers' cooperatives, historically, seem to fit like a hand in a glove. Not that there are no pinches here and there. Or that owners always expect to stay in the trade forever. Common Ground Restaurant, opened in Brattleboro, VT in 1976, appears to be one of the oldest, continuously operating workers' collectives in the U.S.

Other enduring restaurants owned and managed by waiters, cooks, cleaning crews, and cashiers thrive throughout the Midwest and West Coast. The following features worker-owned firms in and around Minneapolis, including the Hard Times Cafe and the Seward Cafe.

And Then There's Some Good News!

2100 workers of the huge Champion International paper mill at Canton, North Carolina, successfully bought the mill and six subsidiary plants, re-forming the the company and renaming it Blue Ridge Paper Products. In the process not only the mill jobs were saved, but also the future of the small town of Canton, whose economy is built almost exclusively around the mill and its support network.

The new company is formed as a democratic ESOP. Read the story of how it all happened in a new book entitled Under the Workers' Caps by George W. Loveland, available in this site. See Helpful Books and More in the adjacent column. Or visit the Blue Ridge website.