More From Omar Freilla
Austin Chronicle: Your first business is a building-products recycling supplier?
Omar Freilla: The organization I represent is a business incubator, to help people to launch worker-owned cooperatives. The store that you're referring to [ReBuilders Source], for salvaging building materials, they're the first cooperative that we launched. That was our very first one; we launched it last year.
We've got about three to four that are currently in the pipeline. We've got one group that's starting up a design/manufacturing firm for solar products; another one that's starting up a local green diner; another that is starting up a business to renovate and refurbish furniture, give them a new twist; and a few others – vegetarian food processing and manufacturing.
AC: So the business model is adaptable to any sort of business, but you're trying to stay within a "green" network if possible.
OF: Exactly. What ties them all together is that they're located in the South Bronx, they're "green" – environmentally friendly – and that they're worker-owned.
AC: The worldwide recession certainly hit pure recycling hard because of the crash of the commodities market.
OF: Well, that's a bit of a different situation – because when you're talking about recycling, you're talking about trading in commodities. That's really subject to – the value of the dollar, trading overseas in commodities, so that's part of a larger dynamic. What Rebuilders Source is really focused on is really geared toward a local market, reusing building materials – that sector has actually done pretty well across the country. There are lots of these reuse stores that have actually done better than the average building-products store or hardware store. Someone who would have bought a high-end stove, or had a home improvement project to do, they can't afford it anymore, but they heard of a place where they can get that same door at half the cost – it's been used.
AC: Can you talk about how the workers cooperative model works in practice?
OF: Sure. It's the same as any other business – the only difference is how profits are distributed. In the case of a workers' co-op, the profits are distributed among all of the workers that are there. Each worker owns an equal share of the business. They create decision-making structure. There's a wide range of decision-making structures, but what ties them all together is that they share profits equally – or based on the amount of work that people are putting in – but profits are shared amongst the workers, instead of just going to a small group that may not have any direct connection with what's actually happening in the workplace. It's an effort to really connect the decision-making and the profit-making with who's actually doing the work.
AC: Have you yet had problems of scale – or simply problems in making it work?
OF: No – though our first business and the ones that are in the works are small in scale. They're less than 20 people. So the type of decision-making that happens is similar to any small business starting out. Most businesses start out small, and it's a matter of time and good planning and fortitude as to whether they get large or not. But I'll say that the worker-ownership model is one that exists in a variety of businesses. Outside of the United States, in countries where there's been a longer history of worker ownership, there are some great examples of businesses that are large, that rival large corporations that we're familiar with here, that do use that same kind of model of worker ownership. They've been able to design their decision-making and management structures so that even in a large organization, they're still known for keeping that level of intimacy within different departments, so that someone who is working on the line still feels that they have a say in the operations of the company.
AC: Did you look to any particular companies for models for how you were going to go about it where you are?
OF: Yes, actually. As far as a model, we drew a lot of inspiration from the consortium of worker-owned businesses in the northern region of Spain, in the Basque Country, that are part of the Mondragón cooperative corporation. So these are businesses, with as many as 5,000 people in one plant, that have been working – they formed in the mid-Fifties, in the Mondragón region, and they've really been able to form a really strong network. Together, they've got something like the sixth largest conglomerate in Spain, so they've really been successful and turned around the entire region. They're all industrial, with the exception of one that is kind of a Wal-Mart-type store, a supermarket called Eroski – it's actually a consumer-worker hybrid model, consumers and workers together own it. All of the others are industrial manufacturing businesses – they've got secondary support businesses, too, like banks that service them, and R&D firms.
AC: And they've managed to keep the model of workplace democracy even at that scale?
OF: Yes. On the West Coast here, there are lots of small worker-owned businesses, anywhere from five to 30 people.
AC: Talk a little bit about the link between workers cooperative and environmental protection.
OF: They're both really incorporated in order to meet a need. The environmentally sustainable piece – the piece about being conscious about what we're doing to the planet – is really an attempt to right the wrongs of bad decision-making, bad policies that have really had a huge impact in the South Bronx. This area is one that's been a dumping ground for all the stuff that nobody else wants. There's lots of garbage industries, lots of heavy industries, infrastructure with smokestacks and tailpipes, [which] results in a lot of pollution. As a result, this is an area that has really high levels of asthma rates. We've been part of an effort that's really trying to undo that. People have been looking for alternatives for a long time; this is just one way to bring an alternative to the area.
And the worker co-op piece is really about trying to retain wealth in the community. Not just saying, "Let's attract a green business," but, "What kind of business would be able to make the kind of money that actually stays in the community?" We figured if you got a business where the owners are local, then the money that the business earns remains local – that kind of a business. You're more likely to keep that money in the community if the people that are the owners are actually living there in addition to working there.
It also is in keeping with our values, which are really about democracy. We want democracy in every piece of our lives; this is a way of doing it.
AC: And now you're reaching out elsewhere, as in Austin?
OF: Yes. People have just called us, said: "Will you come to our town? We've heard about what you guys are doing, and we're interested." Wherever there are communities where people have been left out of the picture, where people have been dealing with environmental burdens, or are suffering from poverty and there aren't enough jobs, people are still bubbling with ideas and want to see something different – people are calling us up. All over the country. There's a strong history of worker cooperation in the Midwest, out in Minnesota; even in that region, Michigan, people have contacted us from the Detroit area, from New Orleans, from other states in the Northeast, like Massachusetts.
AC: What of the political implications, e.g., in the wake of the Van Jones flap? [Jones resigned from an Obama administration position promoting "green jobs," after a right-wing campaign against him.]
OF: In our case, or the case of anyone, there's a wide range of ideas out there that people have on the table. What we're coming with comes out of our history and our experience in this community. And we hold true to values about democracy and about everyone everywhere wanting to breathe clean air and walk on the grass, not have to worry about their children's health, and having an economy that can actually make that happen. There's certainly a status quo – a way of doing things that's about dirty industries and people who have made lots of money off of that, and even more people who are used to that being the case.
The longer that we're doing what we're doing, we believe the country is full of people who want to see more of what we're doing, but sure, there's going to be a backlash at some point. We're talking about creating industries where everyone has an equal share, a share of profits. That means if you're comfortable with the way things are now, then you're comfortable with inequality. Right now everyone doesn't get a share of the profits that they work for, and people don't have a say in what happens where they work – like any dynamic in any relationship, if you've got someone who's used to getting their way all the time, then all of a sudden they have to share decision-making with other people, there's a backlash.
AC: Have you felt that at all yet?
OF: We've been doing this now as an organization for almost six years, but in the larger scheme of things, we're still relatively new – the co-op movement is still under the radar for most of the country, although I'll predict that that is going to change as the years go by. So it's still something where the initial reaction of people is skepticism, if they're people that this whole co-op thing is new for them, there's skepticism for some, and for others it sounds like a great and wonderful thing. "It sounds great"; "I'd like to see what you can actually do" – those are the two most common reactions.