Fagor Group became the number 1 appliance manufacturer in France (14.5% market share) and No. 2 in Spain in 2011 with brands like Fabor, Brandt, de Dietrich, Sauter, Ocean and others. It now has nearly 6,641 employees , achieved a turnover of 1.3 billion euros in 2011 and has 14 production sites in six countries (Spain, France , Italy, Morocco , Poland and China).
Fagor Group is one of the entities of the Mondragón Cooperative Group (83 569 people , 270 businesses generated sales of 13.696 billion euros for the year 2011). The Mondragon Cooperative Group consists of three divisions : banking, retail, and industrial. In the latter, Fagor is the largest company.
Today, Fagor-Brandt is on the brink of
bankruptcy. Very little financial information is available on its website.
Without this, it certainly can't get any advice. So much for cooperative
transparency. It seems that Mondragón has been subsidizing Fagor for years and
it can no longer afford to continue to do so. Figures north of 300 million
Euros have been put forward as estimates of subidies given by Mondragón. The total debt of Fagor-Brandt is 800 millions Euros and it is clear that the parent cooperative does not want to throw in any more money.
Is the problem hubris? We know that most
mergers and acquisitions do not succeed. Did Fagor's CEO, Pablo Mongelos, have too
much hubris when he took over Brandt from Elco, an Israeli company for about
165 million Euros? Of was the takeover a desperate attempt for an already
ailing Fagor?
Fagor group itself consists of many
cooperatives which are so interwoven that probably only a very specialized
person can make out the bad apple which is spoiling the whole barrel.
The French minister of Industrial Renewal, Arnaud Montebourg is desperately tying to save the 1800 odd jobs which are being lost in France. Jobs which have survived by taking more and more debt and subisidies.
A good strategy for Mr. Montebourg would be to stop looking at the microeconomics of all the individual cases which seem to be overwhelming him at this minute, but to start looking at the macroeconomic policies which are keeping France under-competitive. After all, he is going to ask the middle-classes to foot the bill of the macro mess. So we should be concerned.
Nay, as a start, he should go one step backward and try to question the growth mantra which is keeping French policies aiming for targets and inducing policies which are not economically desired by French people. As a result, effective demand is not going to go up. Once he and his leader François Holland get the vision and mission right, perhaps they will have a better chance to devise appropriate strategies based on appropriate technologies and structures.
The French minister of Industrial Renewal, Arnaud Montebourg is desperately tying to save the 1800 odd jobs which are being lost in France. Jobs which have survived by taking more and more debt and subisidies.
A good strategy for Mr. Montebourg would be to stop looking at the microeconomics of all the individual cases which seem to be overwhelming him at this minute, but to start looking at the macroeconomic policies which are keeping France under-competitive. After all, he is going to ask the middle-classes to foot the bill of the macro mess. So we should be concerned.
Nay, as a start, he should go one step backward and try to question the growth mantra which is keeping French policies aiming for targets and inducing policies which are not economically desired by French people. As a result, effective demand is not going to go up. Once he and his leader François Holland get the vision and mission right, perhaps they will have a better chance to devise appropriate strategies based on appropriate technologies and structures.
