But *WHY* did US Steel sell off the factory? Answer? Because it was not making a profit.
If the Unions had bought the plant, can kept the same wage/cost structure, they would not have made a profit either. Socializing something, doesn't magically change the economic math.
This is yet another example, of dozens, where Noam Chomsky proves once again, he's a great linguist, and a terrible economist.
And you've proved, yet again, you're neither.
Neither are you particularly knowledgeable about worker owned enterprises, like
Mondragon, which doesn't pay management at a rate of hundreds of times the average worker.
If you are going to criticize my sources, give me a good reason to believe you possess the necessary intellectual qualifications to make an informed opinion.
Thank you. I get to illustrate the difference between you and me, right here right now.
You cited Chomsky, who said "it could have worked", and that was your 'evidence'.
Here's mine.
Mondragon: Trouble in workers? paradise | The Economist
Mondragon - Trouble in workersÂ’ paradise
NEWS that SpainÂ’s largest appliance-maker is heading for bankruptcy will not come as a complete shock in the crisis-ridden country. Yet Fagor is a special case. It is part of Mondragon, the worldÂ’s biggest group of worker-owned co-operatives.
Fagor has lost money for five years and has run up debts of €850m ($1.2 billion). Its factories all ceased production three weeks ago. (written Nov 9th 2013)
In the past, losses in one part of the group have been covered by the others, but this time Fagor’s pleas for a €170m lifeline were rejected. Eroski, another co-operative in the Mondragon group and one of Spain’s largest retailers, is also struggling in the face of stiff competition, and it and two other co-ops vetoed Fagor’s plan.
This was a blow to Sergio Treviño, Fagor’s boss since April. He had planned to move the bulk of production to Poland and to turn Fagor into an ordinary company with outside shareholders. Its Polish unit has now filed for creditor protection and the French unit will follow, triggering cross-default clauses in Spain. As we went to press Fagor looked likely to file for bankruptcy imminently.
Fagor, with 5,600 workers, is a relatively small part of the whole. Even so, Mr Treviño warns that its fall “will have an uncontrollable domino effect on the rest of the group with major social implications.” He believes Fagor’s liquidation would create a €480m hole at Mondragon, including inter-group loans and payments the group’s insurance arm would have to make on Fagor workers’ unemployment policies. Mondragon has promised to find new jobs or offer early-retirement terms for as many as it can of Fagor’s Spanish workers, but this is a tall order in a country with 27% unemployment. Besides their jobs, workers stand to lose the money they had invested in the co-op if it is liquidated.
BritainÂ’s even older co-operative movement (founded in 1844 and nominally owned by its customers rather than its employees) is undergoing a similarly harsh encounter with economic realities. Its banking arm, hit by huge bad debts after taking over another mutual lender, is having to bring in American hedge funds as outside shareholders, because its parent movement was unable to rescue it alone. The co-operative model has its virtues, but there are times when those nasty, money-obsessed capitalists have their uses too.
Let's recap shall we?
Spanish co-op Fagor, has been losing money for 5 years. Why didn't they invest to reduce costs, or cut pay enough to be profitable?
Because they were a co-op.
The CEO of Fagor tried to privatize the company, and was veto'd by fellow co-ops. Thus the company closed all operation, and is filing bankruptcy.
Mondragon, the owner of all the co-ops, is now having a crisis, because all the cross-co-op-lending and financing, is going to be crippled by the massive default of Fagor.
Equally, Brittan's Co-op, founded in 1844, is now selling out to evil capitalist American Hedge Funds, in order to avoid bankruptcy.
Now, did you notice the difference between what you do on this thread, and what I do?
You quoted the OPINION of a LINGUIST, as your 'evidence'.
I quoted what is ACTUALLY HAPPENING in the world around us, as my evidence.
You quoted a single anonymous source which ACTUALLY isn't all that impressive, but it is a big improvement over your usual arguments.
"Almost 28,000 companies have declared bankruptcy during Spain's five-year economic crisis, hitting a peak of 2,854 during the first three months of 2013.
"But Fagor Electrodomésticos is not just any business.
"Launched in 1956 by a Catholic priest named José MarÃa Arizmendiarrieta and five students from a technical college he started in the wake of the Spanish Civil War, Fagor is the foundational unit of Mondragón, the world's biggest conglomerate of worker-owned cooperatives..."
"Similarly, when
Richard Wolff, a professor emeritus of economics at the University of Massachusetts, Amherst, visited Fagor two years ago, he was impressed by the seriousness with which management handled buying assembly line equipment, which came from outside the Mondragón family of industrial companies. 'They gave me a lecture on policy: You buy within Mondragón if quality or price was competitive. If not, you go outside,' he says..."
"So why did Fagor fail?
"It's easy to say that Mondragon's cooperative model wasn't up to dealing with economic crisis -- that it was too touchy-feely for tough times -- but the reality has less to do with ideology than with simple economics.
"'Co-operatives are subject to changing tastes, technologies, mismanagement -- all the usual reasons why an enterprise can have trouble,' says Wolff. 'It would make no more sense to question co-ops because one goes out of business than to look at Detroit and say, "'Isn't capitalism a failure.'"
"In the case of Fagor, which was the biggest appliance maker in Spain and France, the Spanish housing bubble allowed it to ignore longstanding business problems, says Adrián Zelaia, who spent 25 years at Mondragón, including 10 as secretary general, before leaving in a management dispute in 2010.
"As a European maker of mid-range appliances, Fagor did not have the low costs of emerging market brands, nor did it have the superior technology of the top German factories, Zelaia says. To deal with this, the company took advantage of easy credit to expand, most notably by buying the French appliance company Brandt in 2005.
"'It was a temptation for medium and large businesses to flee from their problems via acquisitions,' says Zelaia, now president of the Ekai Center, a think tank.
"Fagor was thus saddled with debt when the housing bubble burst in 2008.
"It marked the beginning of the end for the company, which had 5,700 employees, 2,000 of whom were in Spain.
"'The housing bubble popped, and that combined with a financial crisis, so credit was cut back, consumption dropped, products came in from low-cost countries, and raw material prices rose,'... 'We're a cooperative, but we don't live outside the market.'"
Defiant Spanish workers stage lock-in, resist layoffs - Fortune Management
