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How Argentinian Workers Reclaimed Their Companies.

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closed factory


Photo: Matías Polako on Flickr. A closed factory in Argentina.

Way back in Focus81, Noelia Carrazana and Fionuala Cregan explored how Argentinians reclaimed their companies after economic collapse.

Imagine working in a company without a boss or any kind of management structure, where decisions are made collectively. Imagine that it is you, along with your co-workers that took possession of that company, threatened with bankruptcy and closure, and transformed it into something that belongs to you and your community. Imagine overturning the logic of capitalism. Across Argentina, there are 10,000 workers who have done just that.

There are now approximately 200 reclaimed factories and companies working in sectors as diverse as tourism, printing and ceramics, all of which were salvaged from the economic crisis which hit the nation in December 2001. Once Latin America’s industrial giant, the onset of neoliberal reforms from 1975 onwards led to a process of deindustrialisation in Argentina, which reached a peak in the 1990s. Increased privatisation of state companies, lead to a rise in the number of factory owners who suddenly ceased production, refused to pay their workers wages, declared bankruptcy and closed down.

By 2001, unemployment in Argentina was at a record high of over 20%, with a further 40% unable to find adequate employment. It is in this context that the phenomenon of reclaimed factories appeared. Out of necessity and desperation, workers decided to take over the factories where they had formally been employed and to attempt to start up production themselves without a boss or an owner. Luis Caro, a lawyer with the National Movement of Recuperated Enterprises (MNER) who has helped a large number of worker run factories explains how it works: “The process generally started with a physical take over of the work place. Workers occupy the factory and with support from the local community, trade unions and other cooperatives, sleep in the building to safeguard the machinery and/or other equipment”. The workers then must engage in a number of legal tactics, initially to get a rental contract for the property, but ultimately, to get full legal possession of it.

“One of the first questions they ask when they find themselves in this situation is ‘Where are we going to get our start up money from?’ and ‘Just how do we start out?’ ”, says Caro, “But in fact, starting up is not about money. The first thing they should do is to request permission from either a judge or the current owner to rent the property. Obtaining a rental contract does not cost anything. Workers should be thinking about the fact that they are defending their right to work and carry out lawful industry, as stated in article 14 of the Argentinean Constitution.” Despite this, the lack of any clear legal framework on recuperated enterprises such as a National Expropriation Law has made it impossible for workers to gain a full legal title to their company and thus their future remains uncertain. Currently, workers in most recuperated enterprises have been given a temporary legal permit to continue production under a Bankruptcy law introduced in 2005. The temporary nature of these legal permits (between two to five years) means that once the permit is up, workers are faced with either violent eviction by the State or a renewed legal battle in the courts. This leaves them in an extremely vulnerable situation, and many workers have found that much of their energy goes not into focusing on production, but into defending themselves against eviction.

Furthermore, without a full legal title to the factory, they are not entitled to take out loans or have access to credits or subsidies and therefore are unable to invest in technical support and expertise, or in skills training. Given that much of the equipment in the factories is outdated and that most of the workers do not have experience in running a company, there is a strong need for investment in these areas. In addition, given that these factories have little chance of surviving in the capitalist market, they have also had to work on building an alternative market for their products.

Despite these major challenges, the worker run companies have managed to survive and flourish, setting an example to the world that workers can organize production without a boss or owner. One of the reasons for their success is the fact that decisions are made together by all workers at assembly meetings, resulting in a strong sense of ownership of the process. There is no management structure, but an administrative council, whose role is to carry out the decisions made at the assembly, which also has the power to revoke the council at any time. Furthermore, earnings are distributed equally.

There is no salary scale – all workers earn the same, from the manager to the worker on the factory floor, the contribution of all workers is seen as equal and part of one collective objective. This process in turn has changed notions of what exactly is meant by the profitability of a company – for the workers profitability means taking something home for the family and the community. In this way the recuperated enterprises challenge the very notion of capitalism and the idea that without capital there is no work. These workers have illustrated that without work, there is no capital.

While recognising the right to private property, they demonstrate that it is their work which will produce profits for the collective benefit of workers and their communities. There is a lot of instability and uncertainty regarding the future of these new worker managed undertakings. Nonetheless, they are increasingly becoming a source of hope for the working classes who see recuperated factories as a way of overcoming unemployment and social exclusion, and not least, as a means of survival. All that they are asking for is the right to work. Why then, ask the workers, does the State stand in the way and block this right which is at the very root of maintaining human dignity? And, as a world economic recession looms, will we ourselves be looking towards Argentina, its recuperated enterprises and the economy they have created, as an example to follow?


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