The Fagor Electrodomésticos payment suspension is the worst economic news of the year for the Basque Country according to the region's government. But surely it is the least damaging for Mondragón, who has said "enough" after pumping 182 million euros into the company.
Doing business in France did not turn out well because of strict labor laws there, and even though China was initially profitable, it is no longer. It is true that Fagor has paid dearly for falling consumer spending, and Mondragón is simply trying to avoid a contagion scenario that affects other corporations in the Basque Country. Both Eroski and Caja Laboral finished 2012 in the red.
That is the way to interpret a measure that forces Fagor to redraw its business model, make payroll cutbacks and loan forgiveness agreements with creditors.
