Recuperated Enterprises in Argentina: Reversing the Logic of Capitalism
Argentina’s worker-run factories are setting an example for workers around the world that employees can run a business even better without a boss or owner. Some 180 recuperated enterprises up and running, providing jobs for more than 10,000 Argentine workers. The new phenomenon of employees taking over their workplace began in 2000 and heightened as Argentina faced its worst economic crisis ever in 2001. Nationwide, thousands of factories have closed and millions of jobs have been lost in recent years. Despite challenges, Argentina’s recuperated factory movement have created jobs, formed a broad network of mutual support among the worker-run workplaces and generated community projects.
Argentina’s employee-run businesses are very diverse, each with specific legal standing and forms of organizing production. In almost all cases workers took over businesses that had been abandoned or closed by their owners in the midst of Argentina’s financial meltdown in 2001. The owners usually ceased production, stopped paying wages, and went bankrupt. The workers’ decision to take over their plant was a decision made out of necessity–not necessarily out of ideology. The clear worry of how to safeguard workers’ jobs motivated the act of taking over a factory and making it produce without a boss or owner.
Growing unemployment, capital flight, and industry break-up served as the backdrop for factory takeovers. Argentineans lived through the nation’s worst economic crisis ever in December 2001. Unemployment hit record levels–over 20% unemployed and 40% of the population unable to find adequate employment. Argentina, one of Latin America’s industrial giants, struggled to feed its population between 2001 and 2002, with 53% of the population living below the poverty line. In 2006 unemployment still stands at 12.5%, with over 5.2 million people unable to find adequate paid work to meet monthly needs.
Many worker-controlled factories today face hostility and frequently violence from the state. Workers have had to organize themselves against violent eviction attempts and other acts of state violence. This impacts the workers and the enterprises as employees have to leave the workplace, invest energy in a legal battle and fight for laws in favor of worker-recuperated businesses.
In almost all cases the legal fight to form a cooperative and gain recognition of the business’s ownership creates instability. The workers not only have to figure out how to successfully run their business but also worry whether authorities will pass a law to evict the business. In the past year a number of Argentina’s recuperated enterprises, including worker-run BAUEN hotel, Zanon ceramics factory, La Foresta meatpacking plant, and Chilavert print shop, have undergone major legal battles to keep their workplaces. Workers have found out that proving that workers can control production wasn’t enough, they had to also fight for legality. As many of the businesses became profitable once again after the devaluation, many of the old bosses wanted their companies back.
Take the example of BAUEN Hotel, worker self-managed since 2003. Employees rallied throughout December last year to pressure the Buenos Aires city government to veto a law in favor of putting the hotel back into the hands of the former owner. The B.A. government refused to veto the law. If the BAUEN cooperative does not succeed in pushing through a new, favorable law they risk losing their hotel.
For over three years, workers have operated the BAUEN cooperative hotel with no legal standing or government subsidies. Since taking over the hotel on March 21, 2003, the workers have slowly begun to clean up the ransacked hotel and rent out the hotel’s services. The hotel re-opened with 40 employees and now employs some 150 workers.
Rather than providing a national expropriation law, the courts consider the legality of the recuperated enterprises on a case by case basis. This has resulted in fragmentation among Argentina’s 180 recuperated enterprises, which are organized in separate segments. The largest is the MNER (National Movement of Recuperated Enterprises). Over 40 worker-run businesses–among them BAUEN Hotel, Chilavert printing factory, Pismanta Hotel and Spa, La Foresta meatpacking plant, Maderera Cordoba woodshop, and Zanello tractor manufacturer–belong to MNER. The Peronist MNER, led by Eduardo Marua, has been very effective in creating legal tactics for the occupied factories.
A small sector belongs to the MNFR (National Movement of Recuperated Factories), led by Luis Caro. Caro, a procapitalist lawyer, has run as a candidate with the nationalist Christian Democratic party. MNFR functions by capturing and co-opting worker cooperatives when the company faces a legal or market crisis. The most infamous case has been the Brukman suit factory. Many Brukman workers have said that Luis Caro has become their new boss. The worker-run cooperatives belonging to MNFR have become non-political, closing their factory doors to outsiders and following a tendency to go back to the way things were before with the boss. The CTA–as the Argentine workers’ umbrella union is called–represents a smaller and less significant segment. The Zanon ceramics factory represents another segment. The Zanon cooperative, formally named FaSinPat, functions as an autonomous entity but also forms part of the Ceramists Union in Neuquén. The FaSinPat is the only recuperated factory demanding national expropriation of their ceramics plant under worker control.
One of the biggest worries that the workers at Argentina’s recuperated enterprises have is how to self-manage their business. As the largest recuperated factory in Argentina, Zanon now employs 470 workers. Under worker control, no management professional stayed at the factory. Only the workers stayed. The workers had to learn everything about sales, marketing, production planning, and other highly technical aspects. The workers at Zanon regularly work with lawyers, accountants, and other professionals whom they trust, but the professionals don’t make the decisions. The worker assembly votes on technical decisions. Professionals have provided specific skills training for the workers at Zanon. However, for many of the recuperated enterprises there is a deficit of trustworthy professionals.
Planning systematic skills training has been another challenge. While many of the recuperated enterprises have formed informal knowledge-sharing networks, there is a need for specific skills training. In the midst of running a business and fighting legal battles, long-term production planning and training often times becomes a last priority.
The recuperated enterprises have had to re-start production without investment capital, low-interest loans, or subsidies. In many cases, workers took over small- to mid-size businesses with outdated technology. Government and non-governmental entities working with Pymes (small- to mid-size companies) refuse to provide capital for the recuperated enterprises. Because of precarious legal standing, many of the worker-controlled factories and businesses failed to meet requirements to apply for government credits and/or bank loans.
While some recuperated businesses have developed advanced strategies for creating new social relations inside the workplace, several have held on to the old structures left behind by the bosses. Rather than organizing so that all workers participate in the planning and decision-making, some worker run cooperatives have opted to create top-down organizing and adopted an unequal wage scale. Some have organized according to the traditional worker cooperative model, a directive administration that manages the administrative aspects with very little participation from the manual workers. This conservative tendency to close the workplace to outsiders and organize an internal authoritarian organization is most likely influenced by the fear of losing a legal battle in court or failing to successfully run a business.
Beyond legal attacks, Argentina’s recuperated enterprises have had to strategize to overcome market challenges, with no capital support from the state. Due to lack of infrastructure and outdated technology, many of the worker-run cooperatives have little chance of surviving competition in the capitalist market. The best way for the recuperated enterprises to survive is to create an alternative market for products produced inside the recuperated enterprises. Bartering products manufactured by worker-run enterprises among a network of recuperated workplaces would guarantee that a percentage of production becomes profitable. Building a network of support among the recuperated enterprises, autonomous from the state and market, is the biggest challenge facing worker-run businesses.
Despite political and market challenges, Argentina’s recuperated enterprises represent the development of one of the most advanced strategies in defense of the working class and resistance against capitalism and neoliberalism. Worker-run businesses have battled for laws to protect workers’ jobs and opened legal doors for other recuperated enterprises. Many of the recuperated factories have built an extensive international solidarity network among Latin America’s some 300 recuperated enterprises in Argentina, Venezuela, Brazil, and Uruguay. In addition, many occupied businesses like Zanon, Chilavert, and BAUEN have supported community projects and other initiatives for social change.
Recuperated enterprises are creating a movement of democratic alternatives and worker self-determination. Worker self-management in Argentina is helping plant the seeds so that future generations can reverse the logic of capitalism by producing for communities, not for profits and empowering workers, not exploiting them.
The phrase "self management," derived from the Spanish concept of "auto-gestión," means that a community or group makes its own decisions, especially those kinds of decisions that fit into processes of planning and management. Argentina’s recuperated enterprises are putting into action systems of organization in a business in which the workers participate in all of the decisions.
According to James Petras and Henry Veltmeyer, in their essay titled Worker Self-Management in Historical Perspective, worker self-management provides the workers with the decision-making power to 1) decide what is to be produced and for whom; 2) safeguard employment and/or increase employment; 3) set priorities for what is produced; 4) define the nature of who gets what, where and how; 5) combines social production and social appropriation of profit; 6) creates solidarity of class at the factory, sectoral or national/international level; and 7) democratizes the social relations of production.
The recuperated enterprises have developed several long-term demands for worker self-management.
MNER–Occupy, Resist, and Produce. The model of the MNER has been to press for national, provincial, and city legislature to incorporate laws, dictums, and policies in favor of recuperated enterprises. Many of the factories forming part of MNER have at least won temporary expropriation for a minimum of two years. However, the fight for credits and subsidies to invest in machinery, technology, and cultural projects has been largely ignored by government authorities.
Nationalization under worker control: The case of Zanon. The long-term demand at Zanon is for national expropriation under worker control. However, the workers from Zanon have fought a parallel battle in federal court to legally recognize the FaSinPat cooperative. In December 2005, the FaSinPat cooperative won a legal dispute, pressuring a federal court to legally recognize the FaSinPat as a legal entity that has the right to run the cooperative for one year.
BAUEN Hotel, Chilavert, and Zanon have worked together in a coalition for a national expropriation law. The government has offered short-term solutions, giving temporary legal ownership to workers who have recuperated their workplace. This legal permit is usually granted for between two and five years. A definitive expropriation law for factories producing under worker control would provide legal security for jobs.
In September 2004 a delegation of workers from some of Argentina’s roughly 200 re-occupied factories rallied in Buenos Aires to demand that the government permanently legalize the expropriation of factories and other bankrupt enterprises run under direct workers’ control. Workers from Chilavert printing factory, BAUEN Hotel, Brukman suit factory, Conforti printing factory, Renacer electronics from Ushuaia, Junin health clinic, Ados health clinic, Gatic shoe company, Sasetru pasta company, and various unemployed workers’ organizations participated in the march.
Chilavert, a printing factory in Buenos Aires, is one of the occupied businesses that functioned with a temporary permit from 2002 until 2004. The agreement was set to expire October 17, 2004. With the support of the community and other recuperated enterprises the workers of Chilavert won the definitive expropriation of their mid-size print factory in the Buenos Aires neighborhood of Pompeya.
Legal Tactics: Using the Worker Cooperative and Bankruptcy Laws
Argentina’s recuperated enterprises have developed effective legal tactics, using laws that were set up in favor of businessmen to defend workers. Some of the laws passed in favor of recuperated enterprises were based on regulations and laws set up for worker cooperatives. Historically in Argentina, worker cooperatives have gotten a bad name. Throughout the 90s cooperatives were used as a way to cover up outsourcing and reduced labor standards. The recuperated enterprises are bringing back a renovated tradition of the worker cooperatives.
Workers have also effectively utilized Article 187–a bankruptcy law that was developed for businesses to more easily file for bankruptcy. In the 1990s the social democratic Peronist party voted in favor of the bill, revamping the bankruptcy law following advice from the International Monetary Fund. Article 187 served as a tool to accelerate corporate concentration of privatized businesses. However, the law passed with a special article defining that a judge handling a bankruptcy could consider giving the business to the workers if they form a cooperative. Application of the article is discretionary and considered on a case by case basis.
Direct Political Action
In almost all cases of the factory takeovers the workers used the strategy of direct political action. The first step was to physically take over the workplace through occupations. The workers from BAUEN cut the lock off a side entrance to occupy their hotel. Obviously, these actions directly questioned the notion of private property. The workers then had to rally within their communities to defend their occupied workplaces from violent eviction. In the aftermath of December 19 and 20, 2001 citizens and activists from piquetero groups, popular neighborhood assemblies and human rights organizations supported the recuperated enterprises with different measures. Recuperated enterprises like Chilavert, BAUEN, and Zanon have carried out innumerable political actions to pressure the courts to legally recognize their worker cooperatives. The government’s response to Zanon has been violent, using different tactics to evict the factory workers. The government has tried to evict five times using police operatives. On April 8, 2003 over 5,000 community members from Neuquén came out to defend the factory during the last eviction attempt.
Legality vs. Legitimacy
Many of the recuperated enterprises were forced to start up production without any legal backing whatsoever. Such is the case of the BAUEN Hotel, whose turbulent history combines starlit inaugurations, closures, and worker determination. On December 28, 2001, after the management began systematic firings and emptied out the hotel, 150 workers were left in the street. The hotel was constructed in 1978, during the glory of Argentina’s last military dictatorship, with government loans and subsidies. For almost three decades, the hotel has been emblematic of Argentina’s bourgeois class.
However, all of that changed on March 21, 2003 when the workers decided to occupy the hotel. Some 40 members of the current cooperative met secretly early in the morning on the corner of one of Buenos Aires’ busiest intersections. Along with workers from other recuperated factories and the support of MNER, the group took over the building, cutting the locks on the side entrance and walking into the lobby. The workers found the hotel dilapidated, without electricity, and ransacked. For months the cooperative members stood guard inside the hotel, while they put up a legal fight to form a cooperative. Three years later the BAUEN workers cooperative still functions without any type of legal standing.
In December 2004 they inaugurated a street-front café, an eye-catching space in Buenos Aires’ theatre district. The floor is covered with beautiful, high-quality porcelain tile, a trade between worker-controlled Zanon ceramics factory and BAUEN. On any given night the hotel is bustling with culture: theatre, cocktail parties, tango performances, and radio shows to name a few. Many of the workers say that their cooperative is doing what capitalist employers avoid: securing jobs and paying livable salaries. Since the BAUEN takeover the cooperative has hired over 80 new workers. The cooperative pays a monthly salary of 800 Argentine pesos (US$260) for each worker, regardless of their professional task. In addition, the hotel has expanded services and often has full occupancy.
Democratic Relations Inside the Workplace
In almost all the worker recuperated businesses, a general assembly and coordinators have replaced a hierarchical system of foremen and bosses. Since the workers took over the BAUEN Hotel, the cooperative has hired over 85 workers, almost all former BAUEN workers and family members. The workers all earn the same wage. The BAUEN cooperative has a formal board of directors made up of a president, vice-president, secretary, and treasurer, but political decisions are made in a general assembly.
In the case of Zanon, the hiring of workers and organization of production is based on the ideals of horizontal relations, direct democracy, and autonomy. Everything is decided in an assembly, there is no hierarchy of personnel or administration. Each area, including the production lines, sales, production planning, press, etc, forms a commission. Each commission votes on a coordinator. The coordinator of the sector informs on issues, news, and conflicts within his or her sector to a general assembly of coordinators. The coordinator then reports back to his or her commission news from other sectors. The workers hold weekly assemblies per shift. The factory also holds a monthly general assembly, during which production is halted.
Many of the workers at the recuperated enterprises say that their work rhythm has changed. According to Isabel Sequeira, a maid who has worked at the BAUEN Hotel for over 11 years, when employees reopened the hotel it became her hope for a changed future. “We work with our conscience, we don’t have anyone looking over our shoulders or telling us what to do. We are working so that the hotel is clean and beautiful,” she says.
Prior to the workers’ occupation, production inside Zanon was set to maximize the company’s profits, reducing salaries to the minimum possible level, cutting corners on worker safety measures, and pressuring workers to produce at high levels with the least amount of workers necessary. These conditions led to an average of 25-30 accidents per month and one fatality per year. A total of 14 workers died inside the factory. Since Zanon’s occupation by its workers not one accident has occurred inside the factory.
Citizen proposals and demands
Effective strategies and tactics
At BAUEN all of the renovations were self-financed by the workers. In the first year of operations, the workers opted to put profits back into their cooperative rather than take home a pay raise. The workers spent $30,000 dollars alone on the new street-front café. In 2006, the cooperative is scheduled to inaugurate a renovated pool area. They’ve also improved safety regulations within the hotel and fire-proofed rooms.
One of the keys to the recuperated enterprises’ success has been the insertion of the workers’ struggle into the community. Along with defending jobs, the recuperated enterprises are also creating a new culture. Both Zanon and BAUEN have held rock concerts and theatre productions open to the community. The massive concerts have been very effective in generating support for the recuperated enterprises. The concerts have received major news attention from media outlets reluctant to publish news about the recuperated enterprises.
Last December, more than 11,000 fans and supporters attended a concert featuring rock veterans La Renga in Zanon’s stock lot. The 460 workers from the worker-controlled factory organized the entire event–building the massive stage, putting up posters, and selling the low-cost tickets.
The workers at Zanon regularly donate ceramic tiles to cultural centers and other community-based organizations. In 2004, the workers built an emergency health care clinic in a neighboring barrio Nueva España.
“With worker self-management we are in a process of creating workers in solidarity, people who aren’t only worried about a wage,” says Marcelo Ruarte, the BAUEN cooperative’s assembly-voted president. He adds, “Instead they’re trying to improve social conditions, culturally and politically.”
On a local level, BAUEN Hotel has become a prime example of coalition building and development of a broad mutual support network. In the midst of legal struggles and successfully running a prominent hotel, the cooperative’s members haven’t forgotten their roots. BAUEN has become a political center for worker organizations. Subway workers along with public health employees, public school teachers, telecommunications workers, train workers, and unemployed worker organizations have formed a coalition of grassroots worker organizations in what is known as The Inter-Sindical Clasista (Classist Union Coalition). The Classist Union Coalition regularly meets at the BAUEN Hotel and has proposed forming a union school inside the hotel. These types of actions have helped to form a broad network of support for the recuperated enterprises.
This new phenomenon taking hold throughout Argentina, Brazil, Uruguay, and Venezuela continues to grow despite market challenges. More than 30,000 Latin American workers are employed at cooperative-run businesses that were closed down by bosses and reopened by employees.
Representatives from worker-controlled factories and businesses from Argentina, Uruguay, Venezuela, and Brazil organized the First Latin American Congress on Recuperated Enterprises October 28 and 29, 2005 in Caracas to build coordinated strategies against government attacks and dog-eat-dog markets. Venezuelan President Hugo Chávez inaugurated the event with more than 1,000 self-managed workers present who are putting into practice the slogan: Occupy, Resist, and Produce. The Congress served as an initiative to build an economic and mutual support network among the some 300 businesses and factories currently run by worker self-management in Latin America.
Late this year, the Venezuelan government passed a number of legal decrees expropriating abandoned factories for workers to start up production. During the Congress, Chávez signed a decree for the expropriation of two factories. Recuperated enterprises in other countries look to Venezuela as a model for state-supported laws in favor of worker expropriation.
Many of the employee-run companies had the expectation of signing trade agreements and technological exchange accords during the congress. President Chávez promised to provide support to recuperated enterprises in the form of low-interest loans and bilateral cooperative agreements. However, months after the Congress many of the government-supported initiatives have been delayed or forgotten.
The agreements between recuperated enterprises have had the most concrete impact. Even in the case of Venezuela, Latin America’s recuperated factories have had to learn that workers can’t rely on the state to move a business forward. The occupied factories and enterprises are proving that they are organizing to develop strategies in defense of Latin American workers susceptible to factory closures and poor working conditions. While these experiences are forced to co-exist within the capitalist market they are forming new visions for a new working culture. The experiences of worker self-management and organization have directly challenged the capitalist structures by questioning private property, taking back workers’ knowledge, and organizing production for objectives other than profits.