Mondragon Corporation’s historically most important unit is Fagor Electrodomesticos Group, which makes white goods. It employes roughly 2,000 people in five factories in the Basque region and has additional 3,500 in eight factories in France, China, Poland, and Morocco.

Mondragon in November 2013 announced that Fagor was failing and that the company was filing for bankruptcy protection. Ultimately, Fagor was unable to find financing to pay off debts of around $1.5billion related to a 37% slump in sales since 2007 that resulted from Spain’s economic crisis and housing market collapse.

As part of any restructuring or liquidation, Mondragon will provide jobs and income security for a certain period for some its workers-members in Spain. This is one of the cooperative network’s great advantages. It has announced that its internal insurance company Lagun Aro will pay 80% of the cooperative members’ salaries for two years, and the corporation will strive to relocate as many employees as possible to other cooperatives in the network (currently it was announced that 1,200 jobs were saved). The fate of the roughly 3,500 non-Spanish wage laborers (i.e., not cooperative members) in other countries is unclear.

The outstanding issue of Mondragon is that they were not able to transform an international private firm into cooperatives. Are the reasons legal, cultural, or economic?