LABOUR-ARGENTINA: Workers Give New Life to Bankrupt Factories

By Marcela Valente Reprint | | Print |

Marcela Valente

BUENOS AIRES, Mar 19 2002 (IPS) - Thousands of workers in Argentina have decided over the past two years to keep the factories where they worked running after the owners were forced into filing for bankruptcy by the acute economic crisis, in an experiment that has been tough but appears to provide a feasible long-term alternative.

“What we want is to continue working,” Susana Luna, who was hired by the Brukman textile factory in Buenos Aires in 1992, told IPS. After failing to pay the employees their full salaries since 1995, the owners of the company simply disappeared late last year. But the workers decided to get the factory going again.

Brukman, which manufactures men’s clothing, is now being run by around 60 employees, 90 percent of whom are women. Since they decided to start producing again, a month and a half ago, they have purchased materials and taken care of unpaid electricity, gas, water and telephone bills, while distributing whatever money is left over from the clothing sales among themselves.

The same phenomenon is occurring in several of Argentina’s provinces, and in various sectors of the economy.

The four-year recession has driven many businesses over the brink, and the owners either file for bankruptcy or simply disappear, fleeing their debts. In some cases, only a portion of the workers resign themselves to losing their jobs, while a majority resist joining the ranks of the unemployed, and decide to reopen the factory.

There are now three organisations that provide advice and assistance to workers who decide to follow that route: the Movement of Recuperated Companies, which emerged in the central province of Santa Fe; the National Institute of Cooperativism and Social Companies; and the Barter Club, which has a central department of companies.

Some 60 factories that went under in the past decade have become functioning cooperatives, without debts to either suppliers or employees. Many of the new companies also offer child care and library services to their workers, while others help supply community soup kitchens.

The new cooperatives include metallurgical, ceramic and textile factories, transport firms, dairy product and cosmetic companies, a sugar mill, spare parts and tractor manufacturers, a rice mill, bakeries and smelters.

The cooperatives have salvaged around 10,000 jobs in a country where 40 percent of the population of 37.4 million has fallen below the poverty line, and unemployment has climbed to 23 percent.

One of the biggest and most prosperous of the new cooperatives is the Yaguané cold-storage plant, in the central province of Buenos Aires. In 1996, when the company employed 500 workers, it was abandoned by its owners as bankruptcy loomed. The workers moved into the factory, found clients, paid off the debts and got the company back on its feet again in 1998.

In time, Yaguané became the leading meat-packing plant in Argentina, one of the world’s biggest producers of beef. The employees are now earning over 220 dollars a month – more than three times what unemployed heads of households receive in public works programmes. In addition, each worker takes home nearly six kilos of beef a week.

The plant also provides meat to 30 soup kitchens, which feed 2,000 people.

In some cases, the owners reappear and congratulate the workers. In others, they form a partnership with their old employees. But at times, the relationship between the cooperative and the old owners becomes stormy, legal action is taken, the police are sent in, and it becomes difficult for the company to operate normally again and regain the confidence of its clients.

When things go smoothly, the workers and the former owners generally agree to an arrangement for the cooperative to rent the building and gradually purchase the machinery.

The employees of the Polimex spare car parts factory, for example, negotiated and got the company’s shares put in their names as payment for back wages and overdue bonuses and severance pay.

They then dedicated a portion of their wages to a fund for purchasing new machines, which they more than recovered by obtaining new orders for parts.

When Argentina’s economic and political crisis peaked in December with rioting and protests that led to the collapse of two governments in less than two weeks, the incomes earned by the Polimex workers fell once again. But at least they were receiving wages, and they owned the factory among themselves.

The recession plaguing Latin America’s third-largest economy broke out in the last quarter of 1998, and deepened into a full- fledged depression over the past few months. Nearly 40 percent of the economically active population is under- or unemployed.

The man who operates the Brukman textile factory’s press, Oscar Giménez, told IPS that the factory was in trouble for years. “I’ve been working here for eight years, and they had never paid me my full wages, always paying just part of our wages, on a week- by-week basis. They also owed us our holiday and family bonuses and vacation benefits.”

The owners claimed that the back wages were deposited in an account, and would be paid in full one day. But in the second half of 2001, things took a turn for the worse, and the weekly paychecks, which had already dropped from 100 to 50 pesos (on par with the dollar at the time), shrunk to just five pesos.

On Friday Dec 14, the owners paid their employees just two pesos, and laid everyone off.

The employees decided to occupy the factory, assuming that the three owners would try to remove the equipment the next day. But none of the owners showed up. Then began the several days of looting, rioting and protests that toppled the government of Fernando de la Rúa on Dec 20, and the workers decided to stay on in the factory.

“We spent the Christmas holidays here, with our families, and all of January, and were unable to get the owners to come,” said Giménez. The Labour Ministry summoned the owners several times, but they never showed up, or even phoned.

So 60 of the 115 workers occupying the factory decided to get it working again.

“That day we said ‘enough!’ We started to cut fabric and sew clothing, and we began to sell the suits and jackets that were already made, even though we had to sell the clothes retail,” said Giménez. “With what we earned, we paid off the owners’ debt to the power company, and we also paid up all of the other utility bills. Now we take home 40 pesos a month instead of five.”

With the money they earned, the workers purchased more fabric, hangers, shoulder pads and other materials. Now, they first pay off their expenses and the utility bills, and then divvy up whatever is left over. Luna, one of the seamstresses, is satisfied with the new situation, and says she is not scared, even though the police tried to evict them a few days ago.

Early Saturday morning, when only three of the workers and the six-year-old daughter of one of the employees were in the factory, a group of around 70 police armed with truncheons, legal functionaries and social workers showed up with a criminal warrant for “usurpation” and “theft”, and tried to kick everyone out.

When the women resisted, they were beaten. Even the little girl was hit. Two of the women had to be hospitalised. “They made such a racket that the neighbours started to gather around to protest, and other workers kept arriving until the police finally left, and we just went back in again,” said Giménez on Monday.

Now they are worried that they may be “usurping” the company, but they have no other choice. “My wife is unemployed. She was fired, from this same factory, and I have three kids, ages two to eight. The last time the owners were here, I returned home without a cent after they paid me my two pesos. I can’t leave now,” he said.

The lawyers at the Centre of Professionals for Human Rights, who are providing legal aid to the workers, are attempting to determine the reasons underlying the eviction attempt, which took everyone by surprise since the occupation of the factory has been peaceful, and the owners have not set forth any demands, and have not even shown up when summoned by the Labour Ministry.

The employees said that a week earlier, a police officer had come to the factory demanding clothing, supposedly in the name of the owners, but the workers refused to hand it over.

Now they believe it was a ruse, in order to later report the employees for robbery. But according to the workers, nothing has been taken in the past few months, during which the women have slept in the factory on chairs or on the floor.

“I’m 29, and I started working here 10 years ago. This was my first job,” said Luna. For the first four years, she was paid her complete seamstress’ wages, but “everything started to fall apart” in 1995. She went so long without earning her full wages that she can no longer say exactly what her monthly salary is.

“What we want is to work, and if the police come to beat us, we can’t. We have to post people to guard the entryway, with our husbands outside and the kids sleeping inside, and you can’t work that way,” Luna told IPS.

The occupation of the Brukman factory, although not the first, has become a high-profile case because the company is located in a commercial zone of the capital, and because the conflict at the factory coincided with the worst political and social crisis in the history of Argentina, Latin America’s number three economy.

Since the crisis peaked in December, thousands of local residents have been gathering in weekly neighbourhood assemblies. The assembly held in the Once neighbourhood, where the factory is located, has given the workers strong support, providing food, as well as people to act as security guards.

The day after the eviction attempt, 2,000 neighbours gathered outside the factory to express their solidarity.

“I am very surprised, because I thought many of our co-workers wouldn’t come back after what happened, with the police hitting us with sticks and everything,” said Luna. “But on the contrary, all of us are stronger now, because the neighbours support us. We are going to keep working in the factory, with or without the owners.”