Argentina: Workers Takeover Factories
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Mon Nov 18 06:52:48 MST 2002
Job action at failed factories
Workers take over foundering firms with official okay But opposition to
co-ops growing in business sector
SPECIAL TO THE TORONTO STAR
BUENOS AIRESFor nearly a year, the employees at the Grissinopoli breadstick
factory had watched their weekly salary steadily decline, from 150 pesos to
100 and then to 40 the equivalent of $18.
Finally, on June 3, with the company heading toward bankruptcy, the 14
workers demanded recompense. The plant manager offered them each $4.50 and
asked them to leave the factory. They didn't budge.
"He closed the shutters and we stayed inside," says Norma Pintos, 49, a
small woman with pronounced cheekbones who has worked at the factory, in the
middle-class Chacarita neighbourhood, for 11 years.
"We just wanted to keep coming to work."
But what began as a last-ditch effort to save their jobs, or at the very
least to receive some back wages, turned into a dogged protest to gain
control of the factory.
The workers took shifts guarding the factory 24 hours a day, surviving on
the spare change they collected from students at the public university and
by selling empanadas, chorizo sausages and homemade bread on the street.
Four months later, the city legislature expropriated the factory, handing it
over to the former employees. In October, Grissinopoli began producing
In little more than a year, employees have seized control of scores of
foundering factories across Argentina.
But even more remarkable than the takeovers themselves has been the
worker-led resuscitation of the companies, which in some cases are
generating larger profits than under their previous ownerships.
Apart from saving thousands of jobs and softening the precipitous fall of
Argentina's once-formidable industrial production, the takeovers are defying
hard-and-fast notions about the relationship between capital and labour.
"The idea that a capitalist is needed to organize production is being
demystified," says Christian Castillo, a sociology professor at the
University of Buenos Aires who is heading an investigation into the seized
factories. "The workers themselves are demonstrating this."
The occupations have begun to alarm conservative sectors, which fear they
will impinge on private property rights.
But in this crisis-laden nation of 37 million, where more than half the
population is below the poverty line and 34 per cent of the workforce is
unemployed or underemployed, the workers have received strong public
They have also earned government approval, winning over policymakers with
solid business plans and unyielding popular campaigns and protests.
As darkness descends over the murky waters of the Riachuelo River marking
the city's southern boundary, the nearby Ghelco ice-cream factory still hums
Men in green uniforms mop the factory floors, while others sort through
papers over desks in the front office.
In February, the owners of the factory, once Argentina's leading
manufacturer of the flavouring powder used in making ice cream, locked their
doors and soon afterward filed for bankruptcy.
The workers, who were owed thousands of dollars in back wages and benefits,
were left to fend for themselves as they awaited the outcome of a long and
uncertain legal process.
Enter Luis Caro. A dapper lawyer who grew up in a nearby villa miseria, or
shantytown, Caro has represented some 40 occupied factories and has become a
crusading figure in the movement for worker control, swooping in after
company closures and occupations and providing legal counsel to the
At Ghelco, Caro convinced the workers to shift their demand from asking for
indemnities to lobbying for control of the company.
They formed a co-operative and set up tents in a permanent protest in front
of the factory to prevent attempts to remove any equipment or inventory.
After they were out of work and on the street for three months, the
bankruptcy judge allowed them to temporarily rent the factory.
In September, the city legislature expropriated Ghelco the first
expropriation of its kind in the city handing over the keys to the
According to the terms of the expropriation, the co-operative was given
ownership of the machinery and brand name, and in two years will have
opportunity to buy the building.
Now, the 43 workers, all of whom held jobs on the factory floor, are running
While they say they enjoy working for themselves, bringing Ghelco back to
life has not been easy. Many are putting in 12-hour days as they juggle new
managerial or administrative duties with their former production posts.
"The freedom of not having a boss is great, but we have a moral obligation
to each other to work hard," says Claudia Peña, who labels containers and
cleans the bathrooms when she is not greeting customers and clients as a
"Before, when it was time to go, we were out the door not a minute too soon.
Now, it's 9 at night and we're still here."
The Ghelco workers have not had to look far for inspiration. Across the
Riachuelo in the province of Buenos Aires, business is booming for the 54
members of the Union and Force Co-operative who occupied a metallurgical
plant for six months last year before securing legal control by
The co-op members are earning more than twice as much as they did as
employees and are set to take on 20 new members. Almost all the new people
are sons of current workers, most of whom are in their 40s or older.
With demand high for their copper and brass pipes and faucets, the
co-operative is expanding the plant and has plans for exporting its products
The workers are as surprised as anyone at their company's success.
"The fellows still think this is all a dream," says co-operative president,
Roberto Salcedo, 49, a soft-spoken man with graying hair.
"If we had had another option, instead of fighting here for six months
without pay, we would have looked for a job in another factory, and that's
that. But there was no other option. Nowadays, if you lose your job, you
know that you aren't going to find work again and much less at our age."
If shrewd industrialists with an open credit line ran these companies into
bankruptcy, how can worker-controlled co-operatives with no capital and no
prior business experience be carrying on, and even thriving, during the
worst economic slump in Argentina's history?
Wiping the books clean of debts does not hurt. But more importantly, say the
workers, are the profits freed up by removing the owner's hefty take and the
higher salaries earned by managerial and administrative staff.
At the Union and Force plant, the owner and 10 managers together took home
$38,100 a month, according to Salcedo.
"Split among 54 workers, that's plenty to make this viable," he says.
As in most of the factories, the Union and Force Co-operative has
established an egalitarian pay scale. Decisions are made by direct vote in
regularly held assemblies and each worker earns the same wage, based on that
week's profits. A portion of those profits is reinvested in the company, a
necessary sacrifice in a country with a moribund banking system and a
government that has been shut off from international credit for defaulting
on its debt last December.
"In today's Argentina, without credit and investment, these companies can
compete," says Caro. "The workers put themselves at risk. The salaries they
would earn go toward the initial investment. The only costs are supplies,
raw materials and services."
Conservative estimates put the number of worker takeovers at 100 nationwide.
Most workers' actions occur at factories, but workers also have taken over a
supermarket, a medical clinic, a meatpacking plant, a mine in Patagonia and
a Buenos Aires shipyard.
The companies are almost always either bankrupt or heading into bankruptcy
when the occupations occur, although a solvent metallurgical plant abandoned
by its owners was taken over by the workers late last month.
In many cases, the owners have struck deals with their former employees,
whereby the workers are allowed to take over production in exchange for
paying rent or forgiving back wages or benefits. Other factories are still
in legal limbo.
But the ultimate aim for many worker-controlled factories increasingly has
In the last two years, 17 factories have been expropriated in the province
of Buenos Aires and in recent months three in the capital. Legislators in
both the province and the city are drafting bills that would create a
government agency to assist in the formation of co-operatives and streamline
the process of expropriating bankrupt companies in order to hand them over
to the workers.
For their part, workers have been forming co-operatives to give themselves
legal standing, a necessary step before the government can hand over a
factory after its expropriation.
Some worker-controlled factories, however, are seeking further government
Led by the nearly 300 workers at the Zanon ceramic factory in the Patagonian
province of Neuquen, these workers have refused to form co-operatives,
demanding instead that the factories be expropriated and held in state
ownership with worker control.
They are also asking that the government provide subsidies to guarantee
their salaries and to purchase the companies' products for public use.
"A co-operative has a lot of risks," says Celia Martinez, one of 54 workers
at the Brukman textile factory company, in the heart of the Buenos Aires
"We don't have the capital backing us to fight with Agrest, a company six
blocks from here that is much bigger than us. If they feel like it, they
lower their prices and the game's over. They'd shut us out."
A more ideologically charged argument put forth by the leftist political
parties backing the coalition proposes that co-operatives eventually
replicate the hierarchical structure and labour exploitation found in
conventional capitalist companies.
But the demands by workers at Zanon, Brukman and other factories for greater
government intervention have hit a political brick wall.
"The city of Buenos Aires has neither the means nor a good reason to assume
responsibility for a textile factory," says Beatriz Baltroc, a Buenos Aires
city legislator from the left-centre ARI party who has been a leading
proponent of the expropriations. "This isn't this government's role. We have
enough deficits as it is."
Baltroc warns that dissent is brewing among sectors of the business
community and even support for the expropriation of apolitical co-operatives
may be waning.
While the first two expropriations in the capital were approved unanimously
by the Buenos Aires city legislature, the centre-right Radical party, one of
the nation's two major political parties, did not vote on the Grissinopoli
"The property of the owners is being ignored in order to transfer it to the
employees," says Gregorio Badeni, a conservative constitutional lawyer who
recently provided legal counsel to members of the supreme court.
"This isn't an expropriation, it's a confiscation. Expropriations can only
be declared in cases of public benefit. In these cases, there is no public
benefit. There is benefit for 20 or 30 people."
But with local support of the factory-occupying workers strong, attempts to
remove them by force have had little success.
In March, some 200 people from neighbourhood assemblies and human-rights
groups converged on Brukman, forcing the retreat of 70 federal police who
were acting on a judge's order to reclaim the property.
Similar defensive protests convoked by the left-leaning assemblies groups
that formed in the wake of massive protests that ousted Fernando de la Rua
from the presidency in December have foiled eviction attempts at an
occupied printing factory and a pizzeria.
In August, a group of assemblies occupied an abandoned private medical
clinic. With nearly 200 professionals pledging to volunteer, the group plans
to provide medical coverage for worker-controlled factories.
Workers from different factories also have helped each other in joint
protests, with more than 70 co-operatives banding together to form the
National Movement of Recuperated Companies. Another 26 have formed an
association of "reconverted" factories in hopes of lobbying for more
"What we're seeing is a deep questioning of certain sacred elements of the
capitalist system," says Castillo.
"If things improve economically, this movement may disappear. But the idea
of worker control is out there."
This idea has invigorated the Argentine left, which has championed the
factory takeovers, along with the assemblies and growing organizations of
highway-blocking unemployed protesters, as a powerful rebuke of more than
two decades of pro-free market governments.
The Buenos Aires assemblies have echoed popular sentiment in their harsh
criticisms of the fire sale of privatizations in the 1990s and their demands
for renewed state ownership.
Meanwhile, the tens of thousands of unemployed protesters, called
piqueteros, have melded immediate demands of welfare cheques and food
handouts with calls for sweeping political change.
But for now, most factory workers are more interested in keeping their jobs
than in leading a revolution.
Along a rutted dirt road with grass sidewalks in the further reaches of
Buenos Aires' urban sprawl, workers at the Metal Varela aluminum factory are
not looking beyond their next payday.
Light floods in through holes in the factory's sagging, sheet-metal ceiling.
Half the machines are broken.
Since taking over the factory in September, the workers have struggled to
sell enough aluminum auto parts to scrape together a 90-cents-an-hour wage.
"Some people are saying that we're not capitalists, but we're still working
within capitalism," says Osvaldo Perez, 45, a machinist and president of the
co-operative running the factory.
"The truth is, what we most want is to be well off, to live well."
Reed Lindsay is a freelance reporter based in Argentina.
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