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Who Owns REI?

It can't be the members. They aren't even privy to what the co-op's executives earn.

FOURTEEN YEARS AGO, the daily newspaper that employed me closed forever, in a situation similar to the current dispute between The Seattle Times and the Seattle Post-Intelligencer. While I looked for another writing job, I went to work for a short while at REI, giving customers information about camping equipment. One day, a middle- aged Swedish guy came into the department and struck up a conversation about cooperatives.

As a young man, the Swede said, his father had been a fervent member of that nation's cooperative movementconvinced that a noncapitalistic system of citizen-owned businesses could transform Sweden into an egalitarian paradise the rest of the world would emulate.

REI CEO Dennis Madsen: "We are a retailerfirst and foremost," and then a co-op. "Co-ops that forget that are the ones that tend to get into trouble."
CASEY KELBAUGH
REI CEO Dennis Madsen: "We are a retailerfirst and foremost," and then a co-op. "Co-ops that forget that are the ones that tend to get into trouble."

"My father died a bitter man," the Swede told me. "His dreams were broken, his hopes for a better world crushed. Too late in life, he had come to believe that in the end cooperatives are run not for the benefit of the citizens, but for the benefit of the managers."

I am thinking about the Swede's words as I talk on the phone with Dr. Bruce Amundson, 64, a nationally known expert on rural health. Amundson grew up in the Midwest, in a family with strong ties to the cooperative movement; and the fact that REI was a co-op was a strong factor in his decision, 30 years ago, to join. An avid backpacker and outdoorsman, Amundson had not been much concerned about the management of REI. That is, until the company closed its Seattle garment manufacturing facility in 2000 and moved the work to Mexico, where the wages were a fraction of those in the U.S.

The company argued it was all a matter of economics; U.S. labor was just too expensive when compared with Mexico and Asia. REI requires foreign manufacturers to ensure workers' rights, health, and safety and to pay top wages. Factory conditions are checked before orders are placed, and third-party monitors hired to ensure continuing compliance.

But Amundson didn't buy it.

"I felt that it was very much antagonistic to the cooperative movement to be removing jobs from the community in which the co-op was birthed and continues to exist as corporate headquarters, when an important principle for cooperatives is to support and strengthen the local economy," Amundson recalls.

"It struck me that our cooperative was not behaving any better than much of the corporate world of the Nikes and the Wal-Marts, to seek the cheapest labor. The company ethics that I saw demonstrated were really no better than much of the current corporate values, which are participating in the rush to the bottom.

"I believe it is possible for cooperatives to lose their pathand I believe REI has come precious close to that."


Andy Ryan is a freelance writer who lives in Kenmore. He is a former owner of Kent-based Recreational Equipment Inc. He can be reached at andy.ryan@verizon.net.

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