Economy & Trade, Headlines, Labour, Latin America & the Caribbean

ARGENTINA: Workers' Cooperatives Revive Bankrupt Companies

Marcela Valente

BUENOS AIRES, Nov 29 2002 (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, MNER leader Eduardo Murúa, the production manager at the Industria Metalúrgica Plástica Argentina (IMPA) metallurgical factory, told IPS.

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 dollars at the current exchange rate).

Gradually, wages went up. Today, the factory's 147 workers are earning 271 dollars 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 authorised 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 parlours – which were abandoned by their owners, have organised 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 parlours, 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 dollars.

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 dollars 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.

Although trade union officials do not back the cooperatives, they have not taken any action against them either, said Murúa.

''Once the businesses fall into crisis and stop paying their dues to the trade unions and their health services, the leaders start to wash their hands of the workers' problems,'' he said.

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