Argentine workers take control of industry

The workers of the San Justo glassworks in Buenos Aires never thought about owning their company, until it went bankrupt four years ago.

Submitted by Steven. on December 28, 2005

It was just one of thousands of businesses that sank as Argentina's once prosperous economy went into meltdown, pushing almost half the population below the poverty line.

Today a new furnace where the red hot glass is melted is burning. The factory is one of more than 100 "recovered businesses" which are now putting themselves forward as an alternative business model for the country.

When the factory went bankrupt, a group of the workers faced with losing their jobs barricaded the factory gates for almost a year to stop the machinery being taken away.

They slept under canvas through the worst of the winter, while a lawyer argued their case in court. The hardest thing was that many of their families, who did not have enough to eat, did not support the venture.

"We had to fight with our families, who did not believe in this. They would tell us to go find a job," says Leonicio Eloy Arias, who has worked at the factory for more than 20 years.

The workers claimed in court that because they had not been paid for months, they should have first right to the machinery and factory site. Eventually, a judge gave them permission to restart the furnaces.

Today the 38 workers at the glassworks are once again making glass car headlights, exporting these as spare parts to other countries in South America.

They have managed to make enough profit to reinvest some of it in new machinery. And they earn about $500 a month, a good wage for Argentina and one that equals the best period when the factory was in private hands.

The factory is not an isolated success. The National Movement of Recovered Factories boasts more than 100 businesses that went bankrupt during the crisis, but are now up and running, employing some 10,000 people. Not all of these are factories.

They include a hotel, a meat-processing plant which exports beef to Europe, a hospital and one of the oldest shipyards in the country.

The Astilleros Navales Unidos, stands at the entrance to the system of waterways that snakes from Buenos Aires for thousands of kilometres all the way to Paraguay in the heart of South America. While a few take-overs have had to fight lengthy battles with former owners, at the shipyard they have received full support.

"It was very hard for me to close my business," says former owner Raul Podetti.

"It was my entire life's work. But now I have the pleasure of seeing it reborn. What the workers have done is valiant. They deserve support."

However he adds that he is doubtful whether the workers-run factories will be able to operate as efficiently as private companies and so build an alternative business model.

New law
Since the workers took over, the shipyard has had little business, because it still does not have legal recognition to the land, making it difficult to get long term orders. The workers survive from refitting riverboats. But for them it is profitable.

"Because workers need only something to take home, normal economic theory does not apply," says Luis Caro, the lawyer who represents the movement. Everyone in the recovered businesses gets paid the same, and decisions are taken through meetings of all the members. "Internal agreement is the key to success," he says.

Luis Caro has written a new bankruptcy law, now going through Argentina's congress, which would make it much easier for workers to take over factories that go bankrupt. It has already been passed by the lower house and is awaiting approval by the senate.

If the law passes Luis Caro says he hopes many more of the factories closed down during the crisis may be reopened.