Argentine workers’ cooperatives revive bankrupt companies

By Marcela Valente

Buenos Aires, Argentina, Nov. 29 (IPS)— Some 150 cooperatives grouping more than 10,000 workers in Argentina have taken over businesses that were driven under by the economic collapse and in many cases literally abandoned by their owners.

The workers taking part in this new phenomenon of self- management are demanding that the state guarantee them access to the working capital needed to get the businesses up and running and to help them grow.

Each case is pretty much the same: the owners of a teetering business stop paying wages for several months before declaring bankruptcy or suddenly leaving the country without paying their debts.

The employees, with no money and no hope of obtaining the back wages they are owed, take over the company and secure permission from the legal system to set themselves up as a cooperative.

The phenomenon has been gaining strength since recession broke out in Argentina in late 1998, and especially since the crisis peaked in late December, when rioting, looting, and protests toppled two governments in less than two weeks and the country defaulted on its bulky foreign debt.

Since then, more than 50 percent of the population of this once- rich Southern Cone country, Latin America’s third-largest economy, has fallen into poverty.

Eventually 70 cooperatives formed the National Movement of Recuperated Companies (MNER), and 80 others are now in the process of joining.

The businesses involved range from food products companies to metallurgical, chemical and car parts factories, transport companies, and printing presses.

In a handful of cases, the company management has joined in the effort to get the business back on its feet. But usually the businesses are run by the workers, who, after an initial phase of enormous difficulties, begin recuperating the company’s clients and sales.

So far none of the cooperatives have failed, although success levels vary, with some companies doing booming business and others barely able to provide the members of the cooperative with subsistence-level incomes, said MNER leader Eduardo Murúa, the production manager at the Industria Metalúrgica Plástica Argentina (IMPA) metallurgical factory.

But the newly recuperated companies face problems of liquidity, and have no access to credit.

“Since we don’t actually own the companies, we can’t take out loans. If we had support, we could incorporate more employees,” said Murúa.

For the past year, the cooperatives have been asking authorities to set up a trust fund to which they could apply for working capital.

But the only thing obtained so far is a promise from the government of the province of Buenos Aires to earmark, in next year’s budget, around nine million dollars to go towards a trust fund.

According to official figures, unemployment in Argentina stands at 21.4 percent. But a similar proportion of the economically active population is under-employed, and many of the jobless have given up looking for work and no longer figure in the statistics.

The IMPA metallurgical company was resuscitated, as a cooperative, in 1998. At the start, the 40 members of the cooperative scraped by on five pesos a day (equivalent to $1.40 at the current exchange rate).

Gradually, wages went up. Today, the factory’s 147 workers are earning $271 a month.

“We all earn the same, except for the overtime that each person puts in,” said Murúa.

IMPA has benefited by the devaluation of the Argentine peso, which has lost 70 percent of its value against the dollar since January, when the currency board that pegged the peso at par to the dollar for a decade was scrapped.

The company has also benefited from import substitution measures, the freezing of the rates charged for public services, and the drop in financial costs.

“We used to give payment deadlines of up to 120 days, which were expensive for us, but that doesn’t exist anymore,” said Murúa.

In his view, the factory could offer more jobs and better wages if the government designed a policy aimed at creating and maintaining genuine sources of jobs.

Local authorities in the city of Buenos Aires recently authorized the expropriation of two factories that had gone into liquidation. Workers at the two companies — a printing press and a factory that supplies ice cream parlors — which were abandoned by their owners, have organized themselves to keep the businesses going.

The legal decision permitted the temporary expropriation of the buildings and the permanent expropriation of the machinery.

Manuel Ruiz, a member of the cooperative that sells products to ice cream parlors, explained to IPS that the expropriation of the machinery went towards the back pay owed by the company.

“Our cooperative includes factory workers, shipping personnel, machinists, laboratory workers, and maintenance staff, but we all earn the same,” said Ruiz. In 1999, the company had 90 employees, half of whom are now members of the cooperative.

The Unión y Fuerza foundation — the only cooperative that has the support of the Metalworkers’ Union — expanded its personnel from 30 to 50 workers, who currently receive a monthly salary equivalent to $430.

The Zanello tractor factory, meanwhile, grew from 60 to 240 workers this year, mainly because it benefited from the crash of the peso.

The Frigorífico Yaguané meat-packing plant underwent a similar, although slower, process. After operating as a cooperative for three years, it now has 500 employees and is one of the country’s three top cold-storage plants.

The workers earn good wages, and take home six kgs of beef — a staple of the Argentine diet — every week.

But things were not easy at first. For almost a year, the workers occupied the empty factory, before slowly setting up a cooperative, after which they once again began to receive livestock for slaughter, and paid off the company’s debts in utilities and salaries.

Yaguané now has a turnover of $285,000 a year and exports beef to markets in the European Union.

Murúa described the cooperatives as “a new form of struggle by workers, who have watched as their rights have gradually been lost, and have searched for ways to resist, to defend themselves, to avoid falling into the ranks of the permanent unemployed.”

But “we are also interested in demonstrating that workers can run a company, and do it well,” he added.

The country’s trade unions have stayed on the sidelines. “There is not much comprehension of the phenomenon, but we know that the unions are using it as a tool for negotiating with the owners, because in the past business owners who were under pressure could threaten to declare bankruptcy, and now they know that is no longer a threat,” he said.

LABOR BRIEFS

Bush cuts pay raises for federal workers

On Nov. 29, Bush announced he was using his authority in times of “national emergency or serious economic conditions” to change federal workers’ pay structure to limit raises to 3.1 percent instead of the anticipated 4.1 percent. The White House quietly divulged the cut in an e-mail to reporters in the middle of a long holiday weekend in which politics weren’t likely to be on most Americans’ minds. Military personnel aren’t affected. The White House said almost all federal employees would be affected.

Bush also slashed the boost in so-called locality pay, the extra money most federal workers get to bring government salaries closer in line with what private employers are paying in the same metropolitan areas. The White House estimated that the pay gap between private and government workers averages about 18.6 percent. (Associated Press)

Strikes grip France

A public sector strike has forced the cancellation of thousands of flights across France in the biggest labor challenge to the center-right government since its election in June. Air traffic controllers joined postal workers, bus, metro and train drivers, hospital workers, and electricity and telephone utility staff in marches through major cities. The mass protest was called by unions angry at government moves towards privatization, pension reforms and spending cuts. 60,000 marched in Paris and several thousand demonstrators marched in Marseilles and Toulouse.

French truck drivers, meanwhile, appear to have largely abandoned their blockade campaign, although two of the unions involved insist they have not given up. Police broke up several protests on Monday, detaining drivers or threatening to confiscate their driving licenses. On Tuesday, a few fresh blockades were reported, but correspondents said the government’s policy of clamping down early on the blockades appeared to have worked. (BBC News)

Greenpeace
workers locked out

Greenpeace canvassers, members of Office and Professional Employees International Union (OPIEU) local 343, have been picketing the Toronto Greenpeace office daily after an October lockout.

In July, Greenpeace management tried to renegotiate their contract (due to expire December 2003), with the threat that its canvassing operation would close without a new deal. The workers refused to accept management’s terms. Greenpeace Canada has refused to communicate with the OPIEU and says that the workers have been offered jobs in a call center. But this is not what the workers were contracted to do and would result in a wage cut.

Canvassing has raised millions for Greenpeace. Many canvassers volunteer hours; one of the Toronto thirteen is still facing court charges after being arrested at a Greenpeace action. Despite this, most canvassers make little more than minimum wage.

Earlier this year, in LA, one week after Greenpeace workers declared their intent to form a union, they arrived at work to find the door locks changed and their offices cleaned out. They were informed that they would be receiving a two-week severance pay, or have the option to quit. (Oread Daily)

UK teachers strike

Thousands of pupils across the south-east of England were missing classes Nov. 26, as teachers, caretakers, classroom assistants and administrative staff staged a one-day strike over pay. The walk-out by members of the two largest teachers’ unions forced more than 1,000 primary and secondary schools to close. A further 1,000 schools were affected.

The action comes amid growing unrest in the public sector. On the same day a walkout was staged by local government workers in London and firefighters were halfway through an eight-day strike. According to the National Union of Teachers (NUT), London schools are suffering a severe recruitment crisis because teachers can’t afford to live in the capital; they are either quitting or leaving to work in less expensive areas. Local education authorities were prepared to talk to the unions about offering teachers who stayed in London for four years or more a “retention bonus,” but they were not prepared to negotiate while the unions were out on strike.

In March, a one-day protest by an estimated 3,000 members of the NUT union led to the closure of up to half the capital’s 2,000 schools, disrupting lessons for some 450,000 pupils. (BBC News)