Company union
A company union is a trade union
Trade union
A trade union, trades union or labor union is an organization of workers that have banded together to achieve common goals such as better working conditions. The trade union, through its leadership, bargains with the employer on behalf of union members and negotiates labour contracts with...

 which is located within and run by a company
A company is a form of business organization. It is an association or collection of individual real persons and/or other companies, who each provide some form of capital. This group has a common purpose or focus and an aim of gaining profits. This collection, group or association of persons can be...

 or by the national government, and is not affiliated with an independent trade union. Company unions were outlawed in the United States by the 1935 National Labor Relations Act
National Labor Relations Act
The National Labor Relations Act or Wagner Act , is a 1935 United States federal law that limits the means with which employers may react to workers in the private sector who create labor unions , engage in collective bargaining, and take part in strikes and other forms of concerted activity in...

, due to their use as agents for interference with independent unions, but company unions were and are common in many other countries. Some labor organizations are accused by rival unions of behaving like "company unions" if they are seen as having too close and cordial a relationship with the employer, even though they may be recognized in their respective jurisdictions as bona fide
Bona Fide
Bona Fide is a studio album from rock band Wishbone Ash. It is the first studio album in six years and is the only studio album to feature guitarist Ben Granfelt...

trade unions.

Definition and theory

As with labor concepts like the works council
Works council
A works council is a "shop-floor" organization representing workers, which functions as local/firm-level complement to national labour negotiations...

, the definition of a company union is not ironclad. Economist Leo Wolman
Leo Wolman
Leo Wolman was a noted American economist whose work focused on labor economics. He also served on a number of important boards and commissions for the federal government.-Early life:...

 wrote in 1924: "[T]he distinction ... between trade unions and other workmen's associations is frequently a vague and changing one. What is today a company union may tomorrow have all of the characteristics of a trade union." The International Labor Organization defines a company union as "A union limited to a single company which dominates or strongly influences it, thereby limiting its influence."

Supporters of company unions claim they are more efficient in responding to worker grievances than independent trade unions. Proponents also note that trade unions do not necessarily have the company's best interests at heart; company unions are designed to resolve disputes within the framework of maximum organizational profitability.

Opponents use this same logic to argue against company unions. The independent nature of trade unions, they argue, provides them with an outsider's perspective necessary for just resolution of conflict. Furthermore, independent unions are able to propose large-scale changes to work agreements – such as overtime rules and salary schedules – whereas company unions usually address concerns on a smaller scale.

Some opponents also claim that company unions are used as fraudulent institutions, purporting to represent workers while actually ignoring (or working against) the best interests of employees. However, at least one economist advances the idea that in the first part of the 20th century, many companies were hesitant to adopt the company union model, for fear that it might lead to support for an independent trade union.

A 2002 World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...

 publication cites research from Malaysia and India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...

 which produced conflicting results as to the wage
A wage is a compensation, usually financial, received by workers in exchange for their labor.Compensation in terms of wages is given to workers and compensation in terms of salary is given to employees...

 differential provided by trade unions compared to company unions. (Malaysia saw improved wages through independent unions, India did not. The authors indicate the latter "may reflect the specific circumstances that prevailed in Bombay at the time of the study.")


The first yellow union in France, the Fédération nationale des Jaunes de France
Fédération nationale des Jaunes de France
The Fédération nationale des Jaunes de France was the first 'yellow' or company union in France. It was created by Pierre Biétry in 1902. The yellow colour was deliberately chosen in opposition to the red colour associated with socialism....

 ("National Federation of the Yellows of France") was created by Pierre Biétry
Pierre Biétry
Pierre Biétry was a French syndicalist and politician who initially followed orthodox socialism before moving to the right. He was the pioneer of 'Yellow socialism', a movement that has been portrayed as a forerunner of fascism...

 in 1902. The yellow color was deliberately chosen in opposition to the red color associated with socialism
Socialism is an economic system characterized by social ownership of the means of production and cooperative management of the economy; or a political philosophy advocating such a system. "Social ownership" may refer to any one of, or a combination of, the following: cooperative enterprises,...

. Yellow unions, in opposition to red unions such as the Confédération Générale du Travail
Confédération générale du travail
The General Confederation of Labour is a national trade union center, the first of the five major French confederations of trade unions.It is the largest in terms of votes , and second largest in terms of membership numbers.Its membership decreased to 650,000 members in 1995-96 The General...

, rejected class struggle
Class struggle
Class struggle is the active expression of a class conflict looked at from any kind of socialist perspective. Karl Marx and Friedrich Engels wrote "The [written] history of all hitherto existing society is the history of class struggle"....

 and favored the collaboration of capital
Capital (economics)
In economics, capital, capital goods, or real capital refers to already-produced durable goods used in production of goods or services. The capital goods are not significantly consumed, though they may depreciate in the production process...

and labor, and were opposed to strikes
Strike action
Strike action, also called labour strike, on strike, greve , or simply strike, is a work stoppage caused by the mass refusal of employees to work. A strike usually takes place in response to employee grievances. Strikes became important during the industrial revolution, when mass labour became...

. According to Zeev Sternhell
Zeev Sternhell
Zeev Sternhell is an Israeli historian and one of the world's leading experts on Fascism. Sternhell headed the Department of Political Science at the Hebrew University of Jerusalem and writes for Haaretz newspaper.-Biography:...

, the yellow union of Biétry had a membership of about a third of that of the Confédération Générale du Travail, and was funded by corporate interests. Moreover, also according to Sternell, there were close relationships between Pierre Biétry
Pierre Biétry
Pierre Biétry was a French syndicalist and politician who initially followed orthodox socialism before moving to the right. He was the pioneer of 'Yellow socialism', a movement that has been portrayed as a forerunner of fascism...

 and Maurice Barrès
Maurice Barrès
Maurice Barrès was a French novelist, journalist, and socialist politician and agitator known for his nationalist and antisemitic views....

 and the Action Française
Action Française
The Action Française , founded in 1898, is a French Monarchist counter-revolutionary movement and periodical founded by Maurice Pujo and Henri Vaugeois and whose principal ideologist was Charles Maurras...

. This makes the yellow union of Biétry appears as a precursor of the fascist corporatism
Corporatism, also known as corporativism, is a system of economic, political, or social organization that involves association of the people of society into corporate groups, such as agricultural, business, ethnic, labor, military, patronage, or scientific affiliations, on the basis of common...

. During the Nazi occupation of France, unions were banned and replaced by corporations organized along the fascist model by the Vichy Regime. The labor secretary of Philippe Pétain
Philippe Pétain
Henri Philippe Benoni Omer Joseph Pétain , generally known as Philippe Pétain or Marshal Pétain , was a French general who reached the distinction of Marshal of France, and was later Chief of State of Vichy France , from 1940 to 1944...

's administration from 1940 to 1942 was René Belin. After the war, René Belin was involved in 1947 with the creation of the Confédération du Travail indépendant (CTI), renamed Confédération Générale des Syndicats Indépendants (CGSI) in 1949 as the original acronym was already used by Confédération des Travailleurs intellectuels. The movement was joined by former members of the Confédération des syndicats professionnels français, a union created by François de La Rocque
François de la Rocque
François de La Rocque was leader of the French right-wing league named the Croix de Feu from 1930–1936, before forming the more moderate Parti Social Français , seen as a precursor of Gaullism.- Early life :François de La Rocque was born on 6 October 1885 in Lorient, Brittany, the third son to a...

 in 1936. The CGSI declared that it was formed by "des hommes d’origine et de formation différentes [qui] se sont trouvés d’accord pour dénoncer la malfaisance de la CGT communisée" (men of different origins who agreed to denounce the malfeasance of the communist CGT). CGSI developed mostly in the automobile industry, for instance in the Simca
Simca was a French automaker, founded in November 1934 by Fiat. It was directed from July 1935 to May 1963 by the Italian Henri Théodore Pigozzi...

 factory of Poissy.

In 1959, the CGSI became the Confédération Française du Travail (CFT), led by Jacques Simakis. It was declared a representative union on January 7, 1959, but the decision was overturned by the State Council on April 11, 1962 following a lawsuit by the Confédération Française des Travailleurs Chrétiens
Confédération Française des Travailleurs Chrétiens
-External links:*...

 (CFTC) based on the funding of CFT by companies.
In 1968, it organized demonstrations for the "freedom to work
Right to work
The right to work is the concept that people have a human right to work, or engage in productive employment, and may not be prevented from doing so...

" to oppose the strikes organized by the CGT. In September 1975, Simakis resigned and denounced the links of CFT with the Service d'Action Civique
Service d'Action Civique
The SAC , officially created in January 1960, was a Gaullist militia founded by Jacques Foccart, Charles de Gaulle's chief adviser for African matters, and Pierre Debizet, a former Resistant and official director of the group...

. On June 4, 1977 a commando formed by members of the CFT-Citroën
Citroën is a major French automobile manufacturer, part of the PSA Peugeot Citroën group.Founded in 1919 by French industrialist André-Gustave Citroën , Citroën was the first mass-production car company outside the USA and pioneered the modern concept of creating a sales and services network that...

 opened fire on strikers at the Verreries mécaniques champenoises in Reims
Reims , a city in the Champagne-Ardenne region of France, lies east-northeast of Paris. Founded by the Gauls, it became a major city during the period of the Roman Empire....

 (then directed by Maurice Papon
Maurice Papon
Maurice Papon was a French civil servant, industrial leader and Gaullist politician, who was convicted for crimes against humanity for his participation in the deportation of over 1600 Jews during World War II when he was secretary general for police of the Prefecture of Bordeaux.Papon also...

) in a drive-by shooting, killing Pierre Maître, a member of the CGT. Two other members of the CGT were injured. Following this incident, the CFT changed its name into Confédération des Syndicats Libres (CSL). In the continuity of the company union of Biétry, the CSL is in favor of the association of capital and labor, is opposed to Marxism
Marxism is an economic and sociopolitical worldview and method of socioeconomic inquiry that centers upon a materialist interpretation of history, a dialectical view of social change, and an analysis and critique of the development of capitalism. Marxism was pioneered in the early to mid 19th...

 and collectivism
Collectivism is any philosophic, political, economic, mystical or social outlook that emphasizes the interdependence of every human in some collective group and the priority of group goals over individual goals. Collectivists usually focus on community, society, or nation...

, and denounces the French Communist Party
French Communist Party
The French Communist Party is a political party in France which advocates the principles of communism.Although its electoral support has declined in recent decades, the PCF retains a large membership, behind only that of the Union for a Popular Movement , and considerable influence in French...

 as a civil war machine. The number of adherents of CSL was never published, but in professional elections, it obtained from 2% to 4% of the votes. In October 2002, the CSL disappeared as a national union as a result of lack of funds. It called its supporters to join the Force Ouvrière
Force Ouvrière
The General Confederation of Labor - Workers' Force is one of the five major union federations in France. In terms of following, it is the third behind the CGT and the CFDT....

 union in the professional elections. In the automobile industry, the CSL remains as the Syndicat Indépendant de l'Automobile (Independent Automobile Workers' Union).

United States

Company unions were popular in the United States during the early twentieth century, but were outlawed under the 1935 National Labor Relations Act
National Labor Relations Act
The National Labor Relations Act or Wagner Act , is a 1935 United States federal law that limits the means with which employers may react to workers in the private sector who create labor unions , engage in collective bargaining, and take part in strikes and other forms of concerted activity in...

. Recently, some politicians, economists, and management theorists have advocated a reversal of this policy.

Ludlow massacre and Rockefeller Plan

In 1914, 16 miners and family members (and one national guardsman) were killed when the Colorado National Guard
Colorado Army National Guard
The Colorado Army National Guard is a component of the United States Army and the United States National Guard. Nationwide, the Army National Guard comprises approximately one half of the US Army's available combat forces and approximately one third of its support organization...

 attacked a tent colony of striking coal miners
Coal mining
The goal of coal mining is to obtain coal from the ground. Coal is valued for its energy content, and since the 1880s has been widely used to generate electricity. Steel and cement industries use coal as a fuel for extraction of iron from iron ore and for cement production. In the United States,...

 in Ludlow
Ludlow is a market town in Shropshire, England close to the Welsh border and in the Welsh Marches. It lies within a bend of the River Teme, on its eastern bank, forming an area of and centred on a small hill. Atop this hill is the site of Ludlow Castle and the market place...

, Colorado
Colorado is a U.S. state that encompasses much of the Rocky Mountains as well as the northeastern portion of the Colorado Plateau and the western edge of the Great Plains...

. This event, known as the Ludlow massacre
Ludlow massacre
The Ludlow Massacre was an attack by the Colorado National Guard on a tent colony of 1,200 striking coal miners and their families at Ludlow, Colorado on April 20, 1914....

, was a major public relations debacle for mine owners, and one of them—John D. Rockefeller, Jr.
John D. Rockefeller, Jr.
John Davison Rockefeller, Jr. was a major philanthropist and a pivotal member of the prominent Rockefeller family. He was the sole son among the five children of businessman and Standard Oil industrialist John D. Rockefeller and the father of the five famous Rockefeller brothers...

—hired labor-relations expert William Lyon Mackenzie King
William Lyon Mackenzie King
William Lyon Mackenzie King, PC, OM, CMG was the dominant Canadian political leader from the 1920s through the 1940s. He served as the tenth Prime Minister of Canada from December 29, 1921 to June 28, 1926; from September 25, 1926 to August 7, 1930; and from October 23, 1935 to November 15, 1948...

 to suggest ways to improve the tarnished image of his company, Colorado Fuel and Iron
Colorado Fuel and Iron
The Colorado Fuel and Iron Company was a large steel concern. By 1903, it was largely owned and controlled by John D. Rockefeller and Jay Gould's financial heirs. While it came to control many plants throughout the country, its main plant was a steel mill on the south side of Pueblo, Colorado...

. One of the elements of the Rockefeller Plan was to form a union, known as the Employee Representation Plan (ERP), based inside the company itself. The ERP allowed workers to elect representatives, who would then meet with company officials to discuss grievances.

The ERP was accepted by the miners, and its success in providing an alternative to negotiations with the United Mine Workers
United Mine Workers
The United Mine Workers of America is a North American labor union best known for representing coal miners and coal technicians. Today, the Union also represents health care workers, truck drivers, manufacturing workers and public employees in the United States and Canada...

 led other business owners around the country (and even overseas) to consider replicating it. In 1933 the miners voted to be represented by the UMW, ending the ERP at Colorado Fuel and Iron. Company unions, however, continued to operate at other mines in Pueblo, Colorado
Pueblo, Colorado
Pueblo is a Home Rule Municipality that is the county seat and the most populous city of Pueblo County, Colorado, United States. The population was 106,595 in 2010 census, making it the 246th most populous city in the United States....

 and Wyoming
Wyoming is a state in the mountain region of the Western United States. The western two thirds of the state is covered mostly with the mountain ranges and rangelands in the foothills of the Eastern Rocky Mountains, while the eastern third of the state is high elevation prairie known as the High...

, and the ERP model was being used by numerous other companies. (The Brotherhood of Sleeping Car Porters
Brotherhood of Sleeping Car Porters
The Brotherhood of Sleeping Car Porters was, in 1925, the first labor organization led by blacks to receive a charter in the American Federation of Labor . It merged in 1978 with the Brotherhood of Railway and Airline Clerks , now known as the Transportation Communications International Union.The...

 was organized in part to combat the company union at the Pullman Company
Pullman Company
The Pullman Palace Car Company, founded by George Pullman, manufactured railroad cars in the mid-to-late 19th century through the early decades of the 20th century, during the boom of railroads in the United States. Pullman developed the sleeping car which carried his name into the 1980s...


Labor Relations Act and aftermath

In 1935, the National Labor Relations Act
National Labor Relations Act
The National Labor Relations Act or Wagner Act , is a 1935 United States federal law that limits the means with which employers may react to workers in the private sector who create labor unions , engage in collective bargaining, and take part in strikes and other forms of concerted activity in...

 (also known as the Wagner Act) was passed, dramatically changing labor law in the United States
United States labor law
United States labor law is a heterogeneous collection of state and federal laws. Federal law not only sets the standards that govern workers' rights to organize in the private sector, but also overrides most state and local laws that attempt to regulate this area. Federal law also provides more...

. Section 8(a)(2) of the NLRA makes it illegal for an employer "to dominate or interfere with the formation or administration of any labor organization or contribute financial or other support to it." Company unions were considered illegal under this code, despite the efforts of some businesses to carry on under the guise of an "Employee Representation Organization" (ERO).

In the mid-20th century, managers of high-tech industry like Robert Noyce
Robert Noyce
Robert Norton Noyce , nicknamed "the Mayor of Silicon Valley", co-founded Fairchild Semiconductor in 1957 and Intel in 1968...

 (who co-founded Fairchild Semiconductor
Fairchild Semiconductor
Fairchild Semiconductor International, Inc. is an American semiconductor company based in San Jose, California. Founded in 1957, it was a pioneer in transistor and integrated circuit manufacturing...

 in 1957 and Intel
Intel Corporation
Intel Corporation is an American multinational semiconductor chip maker corporation headquartered in Santa Clara, California, United States and the world's largest semiconductor chip maker, based on revenue. It is the inventor of the x86 series of microprocessors, the processors found in most...

 in 1968) worked to rid their organizations of union interference. "Remaining non-union is an essential for survival for most of our companies," Noyce once said. "If we had the work rules that unionized companies have, we'd all go out of business."

One way of forestalling unions while obeying the Wagner Act was the introduction of "employee involvement (EI) programs" and other in-house job-cooperation groups. One company included them in their "Intel values," cited by employees as reasons why they didn't need a union. With workers integrated (at least on a project level) into the decision-making structure, the independent union is seen by some as an anachronism. Pat Hill-Hubbard, senior vice-president of the American Electronics Association, said in 1994: "Unions as they have existed in the past are no longer relevant. Labor law of 40 years ago is not appropriate to 20th century economics." Author David Bacon calls EI programs "the modern company union."

In 1997, pursuant to a report from the Commission on the Future of Worker-Management Relations, Republicans in the U.S. Congress passed the "Teamwork for Employees and Managers" (TEAM) Act. The bill would have weakened federal regulations against employer establishment and control of employee involvement programs. Although the bill indicated that EI plans should not be used specifically to discredit or prevent union organization, trade unions in the United States vehemently opposed the bill. Jim Wood, an AFL-CIO
The American Federation of Labor and Congress of Industrial Organizations, commonly AFL–CIO, is a national trade union center, the largest federation of unions in the United States, made up of 56 national and international unions, together representing more than 11 million workers...

 leader in Los Angeles, said the "Team Act actually would take us backward to the days of company unions." President Bill Clinton
Bill Clinton
William Jefferson "Bill" Clinton is an American politician who served as the 42nd President of the United States from 1993 to 2001. Inaugurated at age 46, he was the third-youngest president. He took office at the end of the Cold War, and was the first president of the baby boomer generation...

A veto, Latin for "I forbid", is the power of an officer of the state to unilaterally stop an official action, especially enactment of a piece of legislation...

ed the bill.

Former and current Communist nations

Trade unions in the People's Republic of China
People's Republic of China
China , officially the People's Republic of China , is the most populous country in the world, with over 1.3 billion citizens. Located in East Asia, the country covers approximately 9.6 million square kilometres...

 are often identified as government unions, by virtue of their frequent close relationship with national planning bodies
Planned economy
A planned economy is an economic system in which decisions regarding production and investment are embodied in a plan formulated by a central authority, usually by a government agency...

. Although market reforms are changing the relationship between workers and the All-China Federation of Trade Unions
All-China Federation of Trade Unions
The All-China Federation of Trade Unions , is the sole national trade union federation of the People's Republic of China. It is the largest trade union in the world with 134 million members in 1,713,000 primary trade union organizations...

 (China's sole national trade federation), such as U.S. social critic Ralph Nader
Ralph Nader
Ralph Nader is an American political activist, as well as an author, lecturer, and attorney. Areas of particular concern to Nader include consumer protection, humanitarianism, environmentalism, and democratic government....

 still say they are "government-controlled with the Chinese communist party turning them into what would be called 'company unions' in the U.S."

In many Post-Soviet states
Post-Soviet states
The post-Soviet states, also commonly known as the Former Soviet Union or former Soviet republics, are the 15 independent states that split off from the Union of Soviet Socialist Republics in its dissolution in December 1991...

, including the Russian Federation
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...

, the economic collapse of the early 1990s brought a sharp decline in labor activity. As a result, official union structures often function as de facto company unions.


Company unions are a mainstay of labor organization in Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...

, viewed with much less animosity than in Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...

 or the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...

. Unaffiliated with RENGO
-External links:...

 (the largest Japanese trade union federation), company unions appeal to both the lack of class consciousness
Class consciousness
Class consciousness is consciousness of one's social class or economic rank in society. From the perspective of Marxist theory, it refers to the self-awareness, or lack thereof, of a particular class; its capacity to act in its own rational interests; or its awareness of the historical tasks...

 in Japanese society and the drive for social status, which is often characterized by loyalty to one's employer.


In the 1930s, unions in Mexico
The United Mexican States , commonly known as Mexico , is a federal constitutional republic in North America. It is bordered on the north by the United States; on the south and west by the Pacific Ocean; on the southeast by Guatemala, Belize, and the Caribbean Sea; and on the east by the Gulf of...

 organized the Confederation of Mexican Workers (Confederación de Trabajadores de México, CTM). The state of Nuevo Leon
Nuevo León
Nuevo León It is located in Northeastern Mexico. It is bordered by the states of Tamaulipas to the north and east, San Luis Potosí to the south, and Coahuila to the west. To the north, Nuevo León has a 15 kilometer stretch of the U.S.-Mexico border adjacent to the U.S...

, however, coordinated its workers into sindicatos blancos ("white unions"), company unions controlled by corporations in the industrialized region.


In 1997, the government of Guatemala received a loan
A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the lender and the borrower....

 for 13 million USD
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....

 from the World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...

 to privatize its seaport, electrical grid, and telephone and postal services. Canada Post International Limited (CPIL), a subsidiary
A subsidiary company, subsidiary, or daughter company is a company that is completely or partly owned and wholly controlled by another company that owns more than half of the subsidiary's stock. The subsidiary can be a company, corporation, or limited liability company. In some cases it is a...

 of Canada Post
Canada Post
Canada Post Corporation, known more simply as Canada Post , is the Canadian crown corporation which functions as the country's primary postal operator...

, and its partner International Postal Services (IPS), was contracted to manage the privatization process. In anticipation of union resistance, CPIL-IPS agents reportedly used company unions, along with bribery
Bribery, a form of corruption, is an act implying money or gift giving that alters the behavior of the recipient. Bribery constitutes a crime and is defined by Black's Law Dictionary as the offering, giving, receiving, or soliciting of any item of value to influence the actions of an official or...

 and death threat
Death threat
A death threat is a threat of death, often made anonymously, by one person or a group of people to kill another person or groups of people. These threats are usually designed to intimidate victims in order to manipulate their behavior, thus a death threat is a form of coercion...

s, to ensure a smooth transition.

Company unions are also prevalent among the maquiladora
A maquiladora or maquila is a concept often referred to as an operation that involves manufacturing in a country that is not the client's and as such has an interesting duty or tariff treatment...

in Guatemala.

See also

  • Employers Group
    Employers Group
    Employers Group was founded as the Merchants and Manufacturers Association in 1896 in California. It has become a worldwide organization advocating for employers and giving guidance about employment laws and regulations, professional development, consulting projects, and compensation and workplace...

    , which, as the Merchants and Manufacturers Association, promoted company unions in California
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