[Reader-list] ARGENTINA: Factories Without Bosses - and Without State Support

avinash kumar avinash at sarai.net
Tue Dec 14 14:22:54 IST 2004

Factories Without Bosses - and Without State Support

Marcela Valente

"We have gas masks, slingshots and stones to defend ourselves," said
an employee at a worker-run tile factory in Argentina that is facing
the threat of being shut down, because local authorities want the
machinery seized to collect on a debt left unpaid by the former

BUENOS AIRES, Nov 29 (IPS) - The case of Fasinpat (Fábrica Sin
Patrones or Factory Without Bosses) illustrates the total lack of
state support for workers who have refused to sit back and watch the
factories where they worked for decades deteriorate into huge rundown
warehouses with broken windows and rusty machinery peering out from
the weeds of a ghost town.

The phenomenon of bankrupt companies being taken over and reopened by
their employees began to emerge in Argentina in the second half of the
1990s, but really took off in the wake of the late 2001 economic

"We represent 170 companies that maintain jobs for more than 10,000
people," Eduardo Murúa, the president of the National Movement of
Recuperated Companies, told IPS.

In late 2001, the financial system collapsed after capital flight left
Argentina, Latin America's number three economy, with virtually no
foreign currency. Factories stopped producing due to the lack of
imported components and parts and the severe contraction of the
domestic market.

Over the next two years, more than half of the population of 37
million slid into poverty, and unemployment climbed above the 20
percent mark.

A large number of companies filed for bankruptcy in 2002. But
according to Veraz, a private national credit-rating agency, the
number of businesses that went under was 75 percent higher in 2003
than in 2002.

In the first 11 months of 2003, 2,680 companies went under in the city
of Buenos Aires alone, compared to 1,299 in 2002, reported another
credit risk rating agency, Fidelitas.

Against that dismal backdrop, and despite the growing magnitude of the
movement through which workers have been salvaging companies and jobs,
state support has only been seen in isolated measures, and there is no
comprehensive public policy towards the sector, said Murúa.

Since 2003, economic activity has recovered significantly. But many
companies continue to face difficulties.

In some districts, the workers running factories that were abandoned
by their owners have successfully pressed for statutes and laws,
passed by city councils and provincial legislatures, that have enabled
them to run the companies legally.

There are also municipal governments that have entered into
partnerships with the workers, as in the case of the Zanello factory,
which is now Argentina's main exporter of tractors.

In other areas, worker-run factories remain in a sort of legal limbo
as court decisions or new legislation have been delayed, making it
impossible to formulate long-term plans and projects.

And in some cases, like Fasinpat in the southern Argentine province of
Neuquén, authorities have even taken action against the workers.

Up to 2001, the factory was known as Zanón, a leader in the tile
industry. But due to poor management, the firm's debt piled up to more
than 100 million dollars owed to the provincial government,
state-owned banks, and the World Bank, and in 2001 the owners decided
to close the factory down.

But 260 of the employees refused to let the company collapse, and
continued producing tiles, at 20 percent of the factory's capacity.
Shortly afterwards, when the volume of tiles produced had doubled and
exporting part of the output began to look like a possibility, the
workers called in another 220 former employees.

However, the right-wing provincial government of Governor Jorge
Sobisch launched an offensive against the factory, taking legal action
to demand repayment of more than three million dollars in debt
contracted by Zanón with the provincial government.

According to the latest legal ruling, the debt is to be covered by
selling off the machinery with which the workers are manufacturing

The legal battle has led to five attempts to evict the workers from
the plant. But the 480 workers and their families, with the support of
several thousand local residents, have blocked every eviction attempt.

In a telephone conversation with IPS, Alejandro López, the secretary
of the Fasinpat workers union, said that for three years the workers
have been asking the judge handling the case to expropriate the
factory on behalf of the state.

Unlike other "recuperated" companies that turn into cooperatives,
Fasinpat wants the factory to be nationalised, and run by the workers.

But because the workers realise that a solution of this kind could
take time, they would agree to become a cooperative temporarily.

"We have discussed it in assembly," said López. "We are prepared to
defend the factory any way we can. We have purchased gas masks, and
have slingshots and stones. We have also reinforced the number of
guards posted round-the-clock at the edges of the factory grounds, and
we have organised a phone network."

Murúa, meanwhile, told IPS about his meeting with President Néstor
Kirchner a month ago.

In the meeting, he pressed for the passage of a law that would allow
the state to expropriate and nationalise firms that had gone under, in
order to give the employees the option of keeping the companies open.

Murúa also asked the centre-left Kirchner for a one-time subsidy
payment equivalent to 5,000 dollars per job, which would give the
workers access to financing, since the legal vacuum in which companies
like Fasinpat are caught up makes it impossible to secure bank loans.

"If we had that capital, we could bring in more employees, and begin
to export products," said Murúa, who pointed out that all of the
worker-managed companies have prospered. "Sixty percent (of the firms)
have taken on more personnel, and in many cases the employees earn
more than they did before," he added.

According to Murúa, Kirchner regarded the creation of such a fund as
feasible, and ordered the Ministry of Social Action to study the idea.
However, the president saw the proposal for new legislation on state
expropriation of factories as a much more complicated issue.

"We met 26 days ago. I am counting the days, to see if the government
comes through," said the head of the National Movement of Recuperated

In December 2003, Kirchner had stated that two million dollars would
be earmarked for a line of soft credit to be made available to
worker-run companies.

The "recuperated" businesses include small and medium-sized
metallurgical, textile, food industry, paper, tile and farm machinery
factories, bakeries, sugar and rice mills, as well as a growing number
of service companies like transport firms, restaurants, schools,
hospitals and hotels.

The cases tend to follow the same pattern: the owners of the company
stop paying wages and bills, and eventually abandon the heavily
indebted firm.

But alerted by the abundant number of similar cases, employees now
make preparations to prevent the owners from making off with the
machinery and raw materials, and simply wait for the owners to leave
before beginning to run the company themselves.

Most of the companies operate as cooperatives, but in some cases they
become corporations in which private investors or the state own

At times, the owners who have disappeared show up again, drawn by the
resurgence of what was once their company, and try to win it back by
invoking their property rights in the courts.

"This is not a passing phenomenon or merely a consequence of the
crisis," said Murúa. "The movement of worker-managed businesses will
continue to expand and become stronger, even if the economy grows,
because unfortunately there are many small companies in trouble that
will continue to go under." (END/2004)


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