After 10 years under worker control, the VioMe factory in Thessaloniki, Greece, could close.
When the factory went bankrupt in 2011, the workers, who had not been paid for over a year, occupied the building to stop the owner taking away the machinery and products in stock. Despite numerous struggles, including having their power cut, they have continued production, switching in 2013 to ecological cleaning products sold online.
The business is now managed as a worker co-op, with a social co-op set up in 2014.
But trouble looms again this year after the land belonging to VioMe’s bankrupt parent company was sold, threatening the site’s future.
“Our persistent demand,” said a statement from the co-op, “has been to separate VioMe’s section from the rest of the parent company’s assets and assign it to the worker co-operative, to whom the former employer continues to owe millions of euros in wages and compensation. Unfortunately, no government of any political hue respected our demand. While all claim to support employment and economic activity, they sell the land, ignoring the workers’ livelihood.”
Other social economy actors and activists have supported VioMe’s cause by attending a march in Thessaloniki on 18 March.
“For us, every march, every microphone, every poster, every slogan on a wall, every trade union resolution, every protest at a Greek consulate, every small and big action counts, both practically and symbolically,” said the co-op.
Supporters also took to social media using the hashtag #defendViome while events were held, including concerts on 27-30 April. But days before, on 25 April, the co-op reported a power outage at its headquarters, caused by the theft of cables and electrical equipment with thousands of euros in damages.
Despite these challenges, the workers are determined to continue for as long as possible. They are meeting with the buyer this week to discuss options.
“Against all their organised attacks, we continue vigorously,” said the co-op. “We declare that we will not take a single step back and we resolutely continue the preparations of the big festival for the 10 years of operation of the factory.
“We will not succumb to any threat, any attack, any sabotage, we will not tolerate any attempt to suspend the operation of VioMe.
“The factory belongs in the hands of the workers and society and there it will stay!
“We the workers and solidarity workers of VioMe declare that we will defend the factory in the face of any imminent threat or attempt to evacuate it. This battle is ours.”
Greek co-op law has no specific provisions to regulate worker buyouts or takeovers, making the workers’ case difficult. VioMe has been campaigning for legislative changes for years, but although there were hopes of such reform under Syriza’s government, nothing came to fruition, despite repeated pledges to support the co-operative movement and a visit to VioMe by Alexis Tsipras in 2013.
While VioMe’s future remains uncertain, there are many other examples of successful worker buyouts and conversions to the co-op model.
A 2017 report by the European Research Institute on Cooperative and Social Enterprises (Euricse) points out that worker buyouts are influenced by “national and regional contexts, traditions of labour organising, the strength of local co-operative movements, the degree of support from unions and co-operative federations, existing economic development policies, the legal frameworks that assist conversions, and knowledge of the worker buyout solution on the part of workers and the legal and political system”.
Italy’s Marcora Law and France’s Social and Solidarity Economy Law are examples of favourable legal frameworks. The Marcora Law allows Italian workers to claim would-be future unemployment benefits in a lump sum, to help fund a buyout or rescue and capitalise their new co-operative. A similar provision exists in France, where the Social Economy Law requires owners to pre-warn employees about their intentions to give them time to prepare a buyout offer. The law also allows external investors in the business to own more than 50% of the capital of a worker co-op (known as scop in France) for a limited period of seven years. This allows employees to become majority stakeholders eight years on from the transformation of the enterprise into a scop.
Euricse’s report says such conversions are usually motivated by company crisis or business succession issues and tend to take place as “negotiated employee buyouts between workers and their representatives and exiting owners, the co-operative sector, and local authorities or bankruptcy courts”.
But more dramatic takeovers can take place when conflict grows between workers and bosses – as was the case of VioMe.
One of the more recent examples is Ceramiche Noi, an Italian worker co-op set up in 2019. Troubles at the factory, in Città di Castello, Perugia, began when the company was taken over by a partner who wished to close it and relocate production to Armenia. To prevent this the workers decided to buy out the company, in the form of a worker co-op. Under the Marcora law, they renounced unemployment and severance pay and invested €180,000 to buy new machinery.
With support from help of the local union and the federation of worker co-operatives, Legacoop Produzione e Servizi Umbria, 11 workers founded Ceramiche Noi in August 2019. To further support and guide the co-op, Legacoop Produzione e Servizi Umbria became a partner at the time of the acquisition, increasing the capital and appointing an external administrator.
Taking the slogan “All for one, a dream for all”, Ceramiche Noi maintained its existing clientele, 90% of which is in the US. This required sacrifices, including working up to 14 hours a day.
“We work more and there are a lot of worries, but this company is ours, we love it, it is part of us. We are a family of workers and entrepreneurs,” say the co-op’s 11 worker owners, adding that “enthusiasm was stronger than desperation”.
Worker-owner Lorenzo Giornelli adds: “It was an incredible change but it made things better because you feel an incredible net of support behind you.”
He credits Italy’s strong co-op movement for Ceremiche Noi’s successful buyout and its ability to overcome the Covid-19 and energy crises.
Last year during the energy crisis they received financial support from Coopfund, a mutual fund for the promotion of co-operatives.
“Other companies that were not co-operatives didn’t have this kind of support,” says Giornelli. “They closed.”
Despite Covid-19 lockdowns, the co-op continued production and began to develop antibacterial plates, for which they got a patent. Due to the success of these initiatives it doubled its turnover and employers: the co-op started with just 11 workers and it now employs 25. In 2020 it had a turnover of €700,000, which grew to €1.5m in 2021 and €2m in 2022. For 2023 it predicts a turnover of €2.3m.
This was achieved despite soaring energy prices which gave an increase of more than 1,000% in its energy costs. To address the situation Ceramiche Noi converted from gas to LPG, which is cheaper and less volatile.
These efforts brought recognition from Ursula Von Der Leyen, president of the European Commission, who in her State of the Union speech in September 2022 told how workers at Ceramiche Noi were saving energy by starting work at six in the morning to use sunlight and to avoid turning on the fans.
Over the past 12 months the co-op has taken steps to improve its environmental footprint, switching all packaging from polystyrene to cartons, and converting all machinery to industry 4.0 machines to save electricity and water. These initiatives lead to a 30% reduction in CO2 emissions. The worker owners are now exploring ways to switch to renewable energy and turn off gas completely.
“We believe in the green economy,” says Giornelli. The co-op is also a member of the European federation of industrial and service co-ops (Cecop), through which it will attend the European Employment and Social Rights Forum in Brussels in November.
Italy is home to many worker co-ops set up under similar circumstances as Ceramiche Noi, including Birrificio Messina. The co-op was set up in 2013 by fifteen former employees of Messina’s historic brewery, closed down by owner Heineken in 2007. Rather than take over the old factory, the workers chose to set up a new one in the Larderia area of the city – it took three years to get the project up and running with production starting in September 2016.
Despite being a new brand, Birrificio Messina upholds the region’s ancient traditions of the master brewers.
The founding members invested their mobility allowance and their severance pay to fund the venture. They also received funding from other supporters, including the Cooperazione Finanza Impresa (Cooperation Finance Enterprise – CFI) and Istituto Regionale per il Credito alla Cooperazione (the Regional Institute for Co-operative Credit).
“It wasn’t easy at all, it was especially difficult to convince the various investors to believe in the project, as the 15, apart from their work skills, had little to guarantee. They were helped by the Fondazione di Comunità di Messina, which, by making its resources, structure and professional services available, supported the co-operative in an initial fundraising. Moreover, it contributed to the creation of a communication campaign on the territory, to the drafting of the industrial plan and the construction of the network of financial partners belonging to both the profit and non-profit sectors,” says says Dominique Fiorentino, worker-owner and daughter of the vice president of Birrificio Messina, Francesca Sframeli.
As owners of the business, the workers not only feel more invested in it but also have more at stake.
“In a co-operative, employee participation is higher, as is the degree of risk sharing. For the working members, their children, and the employees of the brewery, the sense of duty is the driving force. Every job choice is weighted and necessarily involves a careful assessment of the risks and a look to the future,” says Fiorentino.
Ten of the original members are still involved in the co-op, while five have retired since setting it up. Birrificio Messina employs a total of 26 workers, 14 of whom are the sons and daughters of the original members.
Initial challenges included raising funding, having to renovate the two buildings acquired in Larderia and raising awareness of their brand.
“Having created a brewery and having fought to be able to continue working in their own city is a source of pride for them [founding members] and they always humbly hope to convey to others, especially young people, that it is possible to stay in one’s own land doing what one loves,” says Fiorentino.
In terms of the future, the co-op has many plans, including expand its distribution network so that its products can be easily found throughout Italy but also abroad. The worker owners also aim to invest more in innovative and eco-sustainable technologies to increase production capacity and volumes and satisfy market demand. Marketing will be another important area of work – the co-op hopes to be able to improve communication with current customers and attract new ones through an effective advertising campaign.
According to Cecop, having the right support and advice, including legal advice, financial support and training on co-operative governance is crucial to the success of a worker buyout. And countries with a higher number of successful worker buyouts like Italy, Spain and France have specific support programmes established by their national co-op federations, along with adequate legal frameworks for worker buyouts.