Tuesday I visited a company called Geyser-Gastech, founded in 1997 as a joint venture between Fagor Electrodomesticos (see my October 31st entry), Spain´s largest appliance manufacturer and a German (non-cooperative) company Vaillant-Saunier Duval. The plant makes hotwater heaters (exclusively for heating water for baths and sinks), which is a highly competitive and constantly changing sector. Fagor and Vaillant are the 3rd and 2nd largest producers of hotwater heaters, respectively. The plan is capabe of producing 800,000 hotwater heaters per year.

The decision to start a joint venture allowed Fagor to take advantage of the sophistication of Vaillant´s German engineering and allowed Vaillant to take advantage of the relative cheaper cost of Basque labor. The quality of the engineering and the ability to innovate in design, materials and fabrication is of critical importance to Fagor, because of the increasingly cutthroat nature of the market for this product. Onsite there are R and D facilities The factory sells exclusively to the Fagor and Vaillant and as a result has no marketing functions. It is exclusively a production plant.

Eighty percent of the workforce are worker-owners of Fagor and the remaining 20% of engineers and some support staff (most of whom are from Germany are not worker owners). The make-up of the company is a little strange because the company itself is not a coop, but is half owned by one. The workers have representation though a social council (just as they would in MCC company) and elect (through Fagor) representatives to the board of directors. Most of the production workers come from other Fagor plants.

This is a sector that his highly sensitive to variations in the cost of raw materials and is increasingly competing with lowcost producers. This plant represents a creative effort to remain technologically advanced and maintain market share while expanding coop employment.

Production is arranged in mini-factories. That is each section of the factory acts as an independent factory, with a leader, goals, separate meetings and a focus on improving production and customer satisfaction.