Cheap labor vs. a worker's cooperative

The global economy and the Burley bike trailer

Published September 27, 2006 11:36PM (EDT)

Eleven years ago, flush with the proceeds of the first payment of the advance on my first (and so far, only, book) I bought myself a mountain bike and a Burley Trailer to tow my 1-year-old daughter around Berkeley, Calif. The Burley wasn't cheap, but its striking blue and yellow colors were, and still are, a familiar sight around the Bay Area. And it's held up well -- my ex-wife still uses it to transport groceries and other vital necessities around town.

I did not know until today, however, that for 25 years Burley had been a worker-owned cooperative in Eugene, Ore. I say, "had been," because I also learned today, via a link from Treehugger, that in June, after three years of mounting losses, Burley converted itself to a private corporation. Then, on Sept. 11, a local businessman bought the company. Already, some 40 employees have been laid off and more will probably follow.

It's easy, especially living in Berkeley, where memories of the infighting and squabbling that doomed the legendary Berkeley Co-op 20 years ago still linger, to hear the words "failed worker-owned coop" and start pointing fingers at some inherent flaw in collective management. New owner Michael Coughlin alluded to exactly that, in the most mild of ways, when he told the Eugene Register-Guard that "I think it is a great business. I just think that they really had troubles adapting to competitive issues and keeping their product costs under control. I think managing a business in a very competitive arena is not well suited for a cooperative structure."

What exactly would that competitive arena be? How about competition from Taiwan and China, pumping out cheapo bike trailers currently on sale at your local Wal-Mart or Target? It's tough out there -- in 2005, Burley qualifed for a "$66,500 grant under the federal Workforce Investment Act, money designated by Gov. Ted Kulongoski for training Oregon's existing work force and making companies here more productive and more competitive globally" by helping them to convert to so-called lean manufacturing production processes.

Evidently, Burley didn't get lean enough. But it seems a little unfair to pin the blame for Burley's woes on its co-op structure. As former employee Patricia Marshall writes in a moving requiem, there was much of value to be cherished in 25 years of worker-owned operation. And as plenty of other business owners can attest to, you don't have to be worker-owned to be vulnerable to the challenge of cheap labor and the Wal-Mart effect.

UPDATE: A former employee of Burley writes in.

By Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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