THE CLEVELAND MODEL

The Cleveland Model
By Gar Alperovitz, Ted Howard & Thad Williamson
February 11, 2010

a new model of large-scale worker- and community-benefiting enterprises is beginning to build serious momentum. The Evergreen Cooperative Laundry (ECL)--a worker-owned, industrial-size, thoroughly "green" operation. There are ten major enterprises in the works in Cleveland. this is an employee-owned business. The Evergreen model draws heavily on the experience of the Mondragon Cooperative Corporation in the Basque Country of Spain, the world's most successful large-scale cooperative effort (now employing 100,000 workers in an integrated network of more than 120 high-tech, industrial, service, construction, financial and other largely cooperatively owned businesses).

The Evergreen Cooperative Laundry, the flagship works off the demand from the healthcare industry, which is 16 percent of GDP and growing. employees begin to buy into by payroll deductions of 50 cents an hour. ECL has the smallest carbon footprint of any. most use three gallons, ECL use just eight-tenths
gallon.

A second, part of the Evergreen effort. Ohio Cooperative Solar. large-scale installations of solar panels on the roofs of the city's largest nonprofit health, education and municipal buildings. 100 employee-owners weatherization program.

Another, $10 million in federal loans and grants already in hand) is Green City Growers, hydroponic food, 230,000-square-foot greenhouse--larger than the average Wal-Mart superstore.

A fourth co-op, Neighborhood Voice, 500 jobs over the next five years, focusing on the local market and anchor institutions.

Evergreen Business Services, to support. back-office services, etc.

resources, Cleveland Foundation, local foundations, banks and the municipal government. Evergreen Cooperative Development Fund, capitalized by $5 million in grant, leverage up $40 million.

go green, worker-owned co-ops, national buzz, models are being considered in Atlanta, Baltimore, Pittsburgh, Detroit.

Cleveland model could be applied in hard-hit industries and working-class communities around the nation. It takes us beyond both traditional capitalism and traditional socialism. The key link between national sectors of expanding public activity and procurement, on the one hand, and a new local economic entity, on the other, that "democratizes" ownership and is deeply anchored in the community.

In healthcare the link is to a sector in which some implicit or explicit form of "national planning", the movement toward universal healthcare will all but certainly increase public influence and concern with how funds are used.

Cleveland effort is targeted at very low-income, largely minority communities, the same principles could easily be applied in cities like Detroit and aimed at black and white workers displaced by the economic crisis.

massive planning failures of the nation's main auto companies. in October
the Mondragon Corporation and the million-plus-member United Steelworker union announced an alliance to develop

an alliance to develop Mondragon-type manufacturing cooperatives in the United States and Canada. Says USW's Rob Witherell: "We are seeking the right opportunities to make it work, probably in manufacturing markets that we both understand." what might happen if the government and the UAW used the stock they own in General Motors because of the bailout to reorganize the company along full or joint worker-ownership lines--and if the new General Motors product line were linked to a plan to develop the nation's mass transit and rail system. Since mass transit is a sector that is certain to expand, there is every reason to plan its taxpayer-financed growth and integrate it with new community-stabilizing ownership strategies. The same is true of high-speed rail. Moreover, there are currently no US-owned companies producing subway cars. Nor do any American-owned companies build the kind of equipment needed for high-speed rail.

2007 public authorities nationwide bought 600 new rail and subway cars, roughly 15,000 buses and smaller "paratransit" vehicles. current capital outlays on vehicles alone amount to $3.8 billion, total annual investment outlays (vehicles plus
infrastructure) are $14.5 billion.

Depart of Trans estimate $48 billion investment in transit capital projects could generate 1.3 million new green jobs in the next two years alone. It makes sense to expedite the retirement of aging buses and replace them with more efficient energy-saving vehicles. create more jobs

Obama has endorsed high-speed rail a priority. he announced support for rail expansion in thirteen corridors. based on an $8 billion "down payment"
November 2008 voters in California approved a $10 billion bond to build high-speed rail.

a new industry organized on new principles, the impact of future oil shortages, building 15,000 miles) of track devoted to high-speed rail by 2025. total costs at $2 trillion, $140 billion each year for fifteen years

expanding economic sector, dominated by public funds and public planning. In the absence of a national capacity will likely end up awarding to other countries.

Providing infrastructure will generate a long list of required equipment. a restructured group of vehicle production companies could help produce, help create new forms of ownership that anchor the economies of the local communities involved.

current ownership structure of General Motors suggests the nascent Cleveland effort
possibility of an important new strategic approach

activities financed by the public is used to create enterprises that are more democratically owned, target jobs to communities in distress, it serves a private market and hence faces the "discipline" of the market.

the threshold of developing national policy approach for transportation
It is not too early to get serious about the Clevelands, moving an economically decaying nation toward a new economic vision.

Gar Alperovitz, author of America Beyond Capitalism, and (with Lew Daly) of Unjust Deserts, is a professor at the University of Maryland and a principal of its Democracy Collaborative, an organization that has been assisting the Cleveland development effort. Ted Howard is executive director of the Democracy Collaborative. Thad Williamson is an assistant professor at the University of Richmond's Jepson School of Leadership Studies.