Should Co-ops Create Multi-nationals?

Recently, the membership of Burley Bicycles Cooperative sold their jobs to a private investor ending 28 years of worker democracy for a paltry sum of about $20,000 per member. Burley became immensely popular with Baby Boomers for the creation of their blue and yellow bike trailers perfect for carrying toddlers and/or groceries. In addition to the trailers, Burley also made recumbents, tandems, and high-end road bikes.  They produced everything in the United States which made them one of the last (if not the last) US manufacterer to keep production at home. As Trek and others sought low-wage factories over seas (most notably Asia), Burley stayed the course. During the last three years, they lost money including a whopping $1.5 million last year s reported by the Cooperative Business Journal.

Was it soley the lower production costs of the other companies that did Burley in? Obviously, they were spending money on production that could have been spent on marketing and advertising to increase their share and keep them competitive with other manufacterers. I imagine that the thought of establishing overseas production was anathema to the worker-owners of Burley. Is the lesson to be learned that worker coops can’t compete in a global workplace?

What if Burley had chosen an overseas option? Can worker cooperatives create Multi-National Enterprises without exploiting their fellow workers in the process?

What if the workers of Burley had developed, organized and trained a worker cooperative production facility in Malaysia? They would have been able to partner with them and reduced their production costs which could then be put into marketing and design. The Eugene facility would have been headquarters as well as the “burley design coop” and handled planning and marketing. The asian factory would have been the production co-op. Workers could have been paid a living wage for their area, but split the surplus in a more equitable manner.
It might have meant some big changes for the cooperative, but the net result would have been an expansion of the cooperative movement not a shrinkage. By setting up a cooperative which would still pay a living wage for the region, Burley would still be at a comparative disadvantage over Trek; howev er, they could off-set that by marketing a “fair trade” bicycle and using the cooperative advantage to move product.

Of course, I wasn’t there and hindsight is, well, you know. I am sure that many reasons existed for their demise other that the global bicycle market. When does a coop get lost?

After the conference in NY, I realized that a lot of cooperatives are struggling with growth issues right now. They need to start thinking strategically not operationally. Putting aside slogans and preconceived ideas about business is the first step. Co-opers need to review the history of their movement. The success of Rochdale and the Cooperative Wholesale Society came about in part because they saw the value of shipping in cheap goods from the US and Canada to compete with the retail societies. They grasped the idea of vertical integration and made it theirs.

We need to see the fair trade movement as our movement and its success can be modeled in other industries. I don’t know if my scenario would have kept Burley cooperative or if it would even have worked, but I do know that there are few market sectors where growth can be stifled or the status quo maintainted. The non-coop business world saw the importance of vertical organization created by Rochdale. They have started to see the value of values. We need to start looking at their practices and determining how we can make them work under the cooperative system within our ethics and principles.

We aren’t going to do this alone. We need to start talking to one another. We need to ignore the industry label on our company and focus on the cooperative label. We have a huge amount of unused talent.

About John McNamara

John spent 26 years with Union Cab of Madison Cooperative and currently helps develop co-ops in the Pacific Northwest. He holds a Ph.D. in Business Administration and Masters in Management: Co-operatives and Credit Unions from Saint Mary's University.
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