Latest Columns 09/25 00:19 Argentine Workers Seize Factories, Assets as Recession Deepens By Helen Murphy
Buenos Aires, Sept. 25 (Bloomberg) -- Domingo Ibanez has a new boss: himself. Six months ago he and 44 other workers seized the bankrupt ice-cream flavoring factory where they worked. Now the plant in Barracas, a Buenos Aires neighborhood of derelict food factories, runs at about one-tenth capacity to produce 2 tons of flavorings a day. Supervisors, administrative staff, laborers and cleaners share profits equally, each earning about 25 centavos ($0.07) an hour. ``All we want is to keep the factory open,'' said Ibanez, 53, as he mixed a vat of butterscotch syrup. ``The alternative is unemployment, and I'd probably never get another job.'' As Argentina's four-year recession forces companies out of business, workers have commandeered the factories, machinery and inventories of more than 100 former employers in the last nine months, either to save their jobs or in lieu of back pay. Authorities turn a blind eye to such seizures in a country with unemployment at 22 percent and half the population in poverty. ``Argentina is going back to the Dark Ages,'' said Oscar Liberman, chief economist at Fundacion Mercado, a think tank. ``When the government doesn't provide solutions to the people's problems they will look for their own solutions.'' Factory seizures are just one consequence of the economic crisis in Argentina, sparked when the government defaulted on $95 billion of debt, restricted withdrawals from bank accounts and devalued the currency eight months ago. Unable to pay debt or raise financing, and with demand for their goods dwindling, more than 500 companies have gone bankrupt and thousands of others closed down, swelling the number of workers who are either unemployed or with only part-time jobs to 5.6 million. Thousands Comb Streets Many who have taken over the means of production receive little more than their bus fare to work and a hot meal in the canteen. Ibanez, who has worked at the flavorings plant since it opened 30 years ago, says he counts himself lucky not to be one of the thousands who comb the streets of Buenos Aires each night for food, newspapers, cardboard and cans to sell. The 100 cooperatives created this year employ about 10,000 people, or 2 percent of Argentina's actively employed workforce. Many are part of the country's food industry, including Frigorifico Yaguane, a slaughterhouse in Gonzalez Catan, a town just south of Buenos Aires, and the Cooperativa Lactea dairy products company in Las Flores, a rural community in Buenos Aires province. Other people have turned to crime. More than one violent crime is committed every minute in Argentina, according to police figures, and theft is spreading. Between January and June, kidnappings in the greater Buenos Aires area rose six-fold from a year earlier. Crime Supports Business Some of that crime supports business. At Pablo Fromini's metal workshop on the shantytown outskirts of Buenos Aires, Fromini pays 3.2 pesos a kilo (2.2 pounds) for copper wire he says is probably stolen. ``I don't care where it comes from as long as I can make a living,'' said Fromini, adding that he receives hundreds of offers a day from people selling wire. Argentina's telephone, railroad and electricity companies say theft of copper wire is rife. Edenor SA estimates 7 kilometers (4.4 miles) of wire is stolen from it each month, said Alberto Lippi, a spokesman for the Buenos Aires electricity distributor. Dismissed workers pressure former employers to make good on unpaid salaries by holding assets for ransom. At Lavalan, a wool processor that went bankrupt in February, sacked workers have blocked 500 tons of unwashed fleece from leaving the company's plant in Avellaneda, on the outskirts of Buenos Aires. Fight With Police ``They owe us money,'' said Santiago Maldonado, who worked at the plant for 22 years. Early this month, Maldonado and other pickets fought off police who had been sent to enforce a court order to return the wool to one of its owners, Marcelo Fowler. He values it at $300,000. ``Nowadays the mob can appropriate goods and the authorities are afraid to do anything,'' said Fowler. ``We're heading back to the days after the Russian Revolution.'' Police now stand guard outside the plant, though they haven't made further efforts to recover the wool. Luis Cara, a lawyer who gives legal advice to workers seeking to set up cooperatives and acts as an intermediary between them and former employers, says plant seizures sometimes are the only way employees can receive their due. ``The owners usually owe at least 10 months in back pay, and that's almost impossible to get back,'' said Cara. ``I help them get organized in secret and make the most of their situation.'' Ownership Granted If the past is a guide, workers at the flavorings factory and elsewhere may be able to hold onto their appropriated assets. Courts gave workers ownership of IMPA, which produces aluminum tubes and foil, after they took over the plant in 1997. At the time, workers earned 5 pesos a day and many slept at the factory because they couldn't afford the fare home. Since then, the cooperative has repaid $7 million of debt to electricity companies, suppliers and banks, and workers earn ``a respectable 750 pesos a month,'' said Guillermo Robledo, who helps run IMPA. ``We are seen as the success story,'' said Robledo ``We have gone from absolutely zero to producing about 600,000 tons of metal a month and paying our bills.'' ``Other co-ops can do the same,'' added Robledo, who expects the number of cooperatives in Argentina to double in the next year.
