My Experiences with Worker-Owned Businesses

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Walter Matherly




(Bio–After six years working in Africa and Latin America for the International Division of The Borden Company in 1954, Walter Matherly got a graduate degree in Economics from Duke and began a career in economic research and administration at universities and other non-profit enterprises. He then became a consultant to a variety of non-profits. He retired to Urbana seven years ago.)




I cut my managerial teeth with the Borden Foods Company (Elsie the Cow) in the 1950s as president of their subsidiary for Panama and South America, Compañia Internacional de Ventas. We manufactured and sold powdered milk, “leche klim,” and a line of infant foods. The business and manufacturing facilities were located in Panama, Venezuela, and Colombia. After a few years with them I became aware that Borden’s profits were varying inversely with the personal incomes of people in the populations the companies under my direction were serving. This began to get under my skin. It wasn’t hard to see this on an anecdotal level from where I was sitting in those years, but upon gathering formal data on our profits and actual incomes per capita, I was promptly shaken off my perch of wealthy indifference and confronted with the horror of what my work was accomplishing. It was not a pleasant discovery, and it led rapidly and directly to my departure from the company and flight to a graduate school in economics, licking my wounds and wondering how in God’s name I had stumbled into such a tunnel of nightmares. I still wonder and puzzle over these things.


By the 1980s I had gone to work for a group of business consultants in Somerville, Massachusetts, serving organizations interested in promoting ownership by workers in the assets of their employers. Not a particularly new or even daring concept, but novel for me and a way perhaps to clean up some of the wreckage I had wrought on my way up the corporate ladder abroad.


In any case, with this group I started out with a contract with the Florida Farmworkers Inc., a group of immigrants from Michoacán, Mexico and Haiti, who had become residents of Apopka, Florida. The organization was indebted to and administered by the Catholic Diocese of West Florida, and resided in a run-down shopping center there. Administrative and financial care was provided by five energetic, caring nuns, lapsed from their sisterhoods in Tampa and living in and around Apopka, just west of Orlando. They were smart, spoke Spanish, and kept the community healthy and glued together.


So at my director’s behest, I flew down to see if I could measure the dimensions of their needs and perhaps devise a menu of practical measures that might alleviate their plight.


The path was neither well-lit nor clear. They wanted a good bit more than a straightforward, plain vanilla business owned by the people who worked there. They wanted to find a way to inaugurate their foray into worker ownership with a Haitian radio station, a low-cost housing enterprise, a food cooperative and a service-oriented ornamental-plant collective that would sell plants to urban buyers and renters of exotic collections of plants and flowers. It was potentially not a bad idea, but extremely elaborate, and they had not been too practical in the planning of how it might be developed.


I was fortunate enough to find an accountant with a flair for local enterprise who was able to make many of these ideas flower. But it was far too much for me to be able to supervise or see through to fruition, so I saw to it that Tirso Moreno, the Michoacano with ambition adequate to manage and guide this expanding enterprise, was seated astride the bucking horse with the five nuns and the diocesan administration at his side. I find it has apparently survived and even prospered in the years since my departure.


But I moved on. I went next to Puerto Rico, where a group of farmers clustered around the base of El Yunque, the mountain rainforest in the center of the island, wanted to finance an enterprise to gather exotic fruits (passion fruit, guanabana, mamé, mango and others), and process them into “nectares” (thick, sort of syrupy, distillates of the juices) and ice cream flavorings, to be canned and marketed by an independent Puerto Rican fruit and vegetable canner. The bushes and trees producing these delectables grew wild in the rainforest.


With park ranger permission, the interested farmers were allowed to wander through the forest, picking the stuff to be processed and hauling it out in bags and baskets. It ended up in attractively embossed tin cans on grocery shelves all over the United States and South America. This was not just successful; it became lucrative. Borden, in fact, was instrumental in getting the flavors moving, but the nectares soon achieved a vigorous life of their own. Once again, a skilled local accountant-manager got the operation off the ground, but the farmers got the bit in their teeth and, as far as I know, are still running with it.


The major departure from corporate behavior among these and similar businesses was in the development of plans for new products, marketing, and the hiring and training of staff. All employees were administered and controlled by managers chosen from among the staff itself. The board of directors and administration were all required to be workers in the employ of the organization. The planning and day-to-day operations were undertaken by people charged with carrying out the business plans of the organization as a whole. Recruitment and training were an integral part of the planning and execution of the organization’s long and intermediate goals.


The Florida immigrants were obliged to conduct a good bit of negotiation with state and county authorities, nearly all of it hostile. Pay coming from local grove owners and farmers was minimal to begin with. In addition, the load being placed on local education and on health care and other public services was heavy and increasingly unwelcome among local functionaries and authorities, particularly in rural areas. The acrimony from the local Floridians was often palpable. I knew many of them, sometimes intimately, while living there as a Florida “good-ol’ boy” before I went to New York and then abroad to work. My only advantage was being able to talk to them in “Florida-peckerwood” dialect. My early rapport with them was quickly diluted after they heard me speaking Spanish with the farm workers. This eventually became a source of overt irritation and criticism in the mouths of former friends and acquaintances.


The lesson taught me by the Latino farmers and fruit pickers was that cooperative enterprises, based upon thoughtful planning and worker enthusiasm, can successfully escape the individualistic greed that drives capitalism. But rather than being satisfied with little islands of cooperative escape, the longer-term objective should be to replace that entire exploitative capitalist system with one of democratic and egalitarian structures such as the cooperatives I have just described.

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