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2 UP grads who studied LP-Akbayan alliance honored

March 12, 2014

MANILA, Philippines – Two students from the University of the Philippines who looked into the apparent conflict of interest in the alliance between Akbayan party-list and the Liberal Party bagged the top award in the recently held Chit Estella Journalism Research Awards. Read the rest of this entry »

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Why work is lonely, especially at the top

March 5, 2014

There is an old cartoon I often show to the managers I work with. It portrays a smiling executive team around a long table. The chairman is asking, “All in favor?” Everyone’s hand is up. Meanwhile, the cloud hovering above each head contains a dissonant view: “You’ve got to be kidding;” “Heaven forbid;” “Perish the thought.” It never fails to provoke awkward laughter of self-recognition. Read the rest of this entry »

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SC explains why only authors may be prosecuted for online libel

February 24, 2014

Full article here

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Elitists or plain incompetent?

February 17, 2014

Why only now?

Today, the mobilization phase of the NLEX-SLEX Inter-Connector project begins in the heart of Metro Manila between Makati and the City of Manila. After 45 days or so, the actual construction work will begin in earnest. Motorists in Metro Manila have been told to brace themselves for what promises to be 2 years of life changing misery brought about by traffic, delays and in all likelihood a sense of chaos and confusion as the national government try to come up with different solutions and ideas to deal with the disturbance the project and a dozen more like it will cause on our quality of life. Read the rest of this entry »

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The indignity of no work

February 12, 2014

RECENT discussion over the labour-supply effects of Obamacare has touched off a debate over the usefulness of the dignity of work as a social value. Leading Republicans argue that policies that discourage work and therefore signal that work is not important should be strongly resisted. Paul Krugman insists that it is impossible to maintain the illusion of the dignity of all work when financiers bring home incomes vastly larger than those earned by the typical worker, all while adding dubious value to the economy. Kevin Drum is sympathetic to Mr Krugman’s arguments, but says Democrats should nonetheless avoid the temptation to play down the importance of the dignity of work: Read the rest of this entry »

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Foreign aid: Accept with caution

January 27, 2014

I was invited recently by Sam Chittick of the Australian Embassy to speak to a group of expats and locals, all of whom are engaged in providing assistance to this country. The invitation immediately evoked memories of Australia. I visited Melbourne/Sydney for the first time in the early Sixties and met Donald Horne, who authored that landmark book The Lucky Country, and some beautiful people like the poet Judith Wright and Asian specialist Denis Warner. Read the rest of this entry »

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Defiant Spanish workers stage lock-in, resist layoffs

November 27, 2013

Household appliance maker Fagor has recently entered bankruptcy, but its workers are not ready to give up their jobs.

FORTUNE — In the town of Basauri, amid the rolling hills of Spain’s Basque Country, some 140 workers at the Edesa appliance factory are taking four-hour shifts as they stage a lock-in.

Their parent company, the household appliance maker Fagor Electrodomésticos, has recently entered bankruptcy, but the Edesa workers are not ready to give up their jobs.

“We’re not business people, but we think that there are areas in the business that can open again and be viable,” says 36-year old Ernesto Pérez, a 15-year veteran of Edesa who is taking part in the lock-in.

Almost 28,000 companies have declared bankruptcy during Spain’s five-year economic crisis, hitting a peak of 2,854 during the first three months of 2013. But Fagor Electrodomésticos is not just any business. Launched in 1956 by a Catholic priest named José María Arizmendiarrieta and five students from a technical college he started in the wake of the Spanish Civil War, Fagor is the foundational unit of Mondragón, the world’s biggest conglomerate of worker-owned cooperatives.

With 80,000 employees and operations in 18 countries outside Spain, Mondragón became a symbol of what a worker-owned cooperative model could achieve. In the late 1980s, Pedro Nueno, a professor of entrepreneurship at the IESE Business School, consulted with Fagor on ways to innovate for the “kitchen of the future.” He says he was struck by the leaders’ long-term vision and by how committed they were considering their low salaries (top executives at Mondragón make less than 10 times the lowest paid worker’s salary).

“A person with the same responsibilities would be getting five times that in another company,” he says.

Similarly, when Richard Wolff, a professor emeritus of economics at the University of Massachusetts, Amherst, visited Fagor two years ago, he was impressed by the seriousness with which management handled buying assembly line equipment, which came from outside the Mondragón family of industrial companies. “They gave me a lecture on policy: You buy within Mondragón if quality or price was competitive. If not, you go outside,” he says.

But such commitment and seriousness has done little to help Fagor recently. Revenues fell from €1.75 billion in 2007 (about $2.58 billion at the time) to €1.28 billion in 2011, and the company has lost money for the last five years, racking up debts of €859 million. During that time, Mondragón lent it some €300 million.

So why did Fagor fail? It’s easy to say that Mondragon’s cooperative model wasn’t up to dealing with economic crisis — that it was too touchy-feely for tough times — but the reality has less to do with ideology than with simple economics.

“Co-operatives are subject to changing tastes, technologies, mismanagement — all the usual reasons why an enterprise can have trouble,” says Wolff. “It would make no more sense to question co-ops because one goes out of business than to look at Detroit and say, ‘Isn’t capitalism a failure.’”

In the case of Fagor, which was the biggest appliance maker in Spain and France, the Spanish housing bubble allowed it to ignore longstanding business problems, says Adrián Zelaia, who spent 25 years at Mondragón, including 10 as secretary general, before leaving in a management dispute in 2010.

As a European maker of mid-range appliances, Fagor did not have the low costs of emerging market brands, nor did it have the superior technology of the top German factories, Zelaia says. To deal with this, the company took advantage of easy credit to expand, most notably by buying the French appliance company Brandt in 2005.

“It was a temptation for medium and large businesses to flee from their problems via acquisitions,” says Zelaia, now president of the Ekai Center, a think tank.

Fagor was thus saddled with debt when the housing bubble burst in 2008. It marked the beginning of the end for the company, which had 5,700 employees, 2,000 of whom were in Spain.

“The housing bubble popped, and that combined with a financial crisis, so credit was cut back, consumption dropped, products came in from low-cost countries, and raw material prices rose,” says Pérez, the worker in the Edesa lock-in. “We’re a cooperative, but we don’t live outside the market.”

To help the firm weather Spain’s economic crisis, Fagor employees used the co-operative’s worker management structure to vote for several pay cuts, eventually reaching some 20%. But that was not enough. When Fagor recently asked Mondaragón for another €50 million to stay afloat, the cooperative conglomerate decided the company wasn’t viable and cut it loose two weeks ago.

Today, Mondragón is moving Fagor workers to other co-operatives in the group. Of the 1,000 to 1,200 that it hopes to relocate or give early retirement, 215 have new jobs in the group, according to Mondragón communications director Javier Marcos.

In Basauri, the workers have settled in. On Sunday, they held a community lunch to thank the cultural groups, businesses, and government offices that have supported the lock-in in part because of the domino effect that a closure could have on the town, which has 42,000 residents.

“We’ll stay until we return to our jobs or they throw us out,” says Pérez. “I don’t know how long that will be.” –Ian Mount,

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We need flexible labor laws

October 17, 2013

For once the Nobel Peace Prize Committee was wrong.

Malala Yousafzai should have won. Her courage and her wonderful advocacy for the education of girls worldwide will have and are having a dramatic impact on the world and the freedom of people. Getting rid of chemical weapons is important, but not at the same widespread level. Read the rest of this entry »

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No one can make a ‘mouse’

August 12, 2013

SEVERAL months ago our No. 2 son moved out of our house and into a condominium near his office. For the first two months we barely saw him, as his newfound freedom from the watchful eye and protection of his parents and family meant late nights and long weekends of enjoying that freedom. Read the rest of this entry »

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OECD official reminds multinational investors: Respect workers’ rights

July 31, 2013

The trade union advisory arm of the Organization for Economic Cooperation and Development (OECD) has reminded foreign companies here to respect workers’ rights in their investment destinations as mandated by the Guidelines for Multinational Enterprises. Read the rest of this entry »