Seven Oaks Magazine.

The occupied factories: 5 years after the economic crisis
February 12, 2007
Rachel Marcuse

Rachel Marcuse is currently working for The Working World, an economic democracy not-for-profit based in Buenos Aires, Argentina. This is the fourth of several dispatches from her work and travel in South America.

Twenty men sit around a picnic table in a hot factory outside of Buenos Aires. The men range in age from about 22 to 70 and are wearing knockoff puma shirts, factory overalls and soccer caps. A collage of women in bathing suits sits on the wall behind the table. They are passing around a contract from The Working World which will grant them their 5th micro-credit loan. Each worker signs the paper. They discuss the loan and goals for the factory.

The workers at Metal Varela didn’t always have control over their working lives. In 1999, the three brothers who owned the metal-melting factory in a neighbourhood south of Buenos Aires announced that they would pay the salaries of only 1 out of 3 months to their workers. After 40 days of meetings and protests, the frustrated workers were told that someone new was coming in to manage the factories. This new person, they were told, would catch up their salaries. He didn’t. Neither did one of the brothers - the one that they trusted most - when he came back as manager. Finally, the workers had to follow him to the banks to make sure that they’d get paid.

Argentina was in a rough state after the economic crisis, and the brother who still had control of the factory gave it up. He signed the papers over to the workers so that they would have legal control of the factory.

Metal Varela’s story is both similar and different to others of the “fábricas recuperadas” (recovered factories). In a sense, the workers of Metal Varela were lucky - the boss handed over the deed to them directly. Workers at other factories had to contend with lockouts, dangerous occupations, long legal processes and owners who came back to steal machinery, or even vandalize their own property to get the insurance.

In 2001, after the severe Argentine economic crisis, an incredible number of workers were displaced when their factories went bankrupt and were forced to shut down. Many workers, however, took it upon themselves to ultimately take back and restore their factories in an attempt to salvage their jobs and improve living conditions. In essence, the workers organized themselves to take control of their working lives and keep the companies operating. Immediately following the economic crisis, approximately 200 Argentine factories were recovered.

Expropriation is the process through which workers take control of their factories. To expropriate is “to take possession of, esp. for public use by the right of eminent domain, thus divesting the title of the private owner” (Dictionary.com).

The typical pattern of expropriation and recovery in Argentina goes like this: First, the owner cuts back worker wages and benefits to cut costs and minimize debts. She/he then finds that the venture is not sufficiently profitable and locks out the workers, abandoning the property. Subsequently, the owner files bankruptcy and/or liquidates assets. Unlike in North America or Europe where the workers might have some recourse through welfare or severance packages, in Argentina they are left with no social safety net or state support. At this point, the workers have a choice to make and decide to organize and occupy the property in order to keep production going and maintain their jobs.

The process of expropriation begins. The workers organize to gain community support until they are either 1) evicted or 2) given formal or informal government approval to continue production. The legal battle for many factories is long and arduous. However, many emerge as profitable enterprises, with a commitment to solidarity and economic democracy. Although there is much diversity between the companies, recovered factories are typically organized into cooperatives. They practice direct action and direct democracy in general assemblies where one worker equals one vote. There are often no ¨bosses¨: generally the factories are non-hierarchical. In most cases, everyone makes the same or a similar wage. In these cooperatives, autonomy, transparency, democracy and sustainability tend to be highly valued.

Metal Varela is a medium-sized metal-melting factory in a neighbourhood called Berazategui, about an hour drive south of Buenos Aires. When the original owner signed over the deed - all of a sudden - the 25 original workers of Metal Varela (there are now 30), owned a factory. With much technical skill, but little business knowledge, they set out to keep production going.

As with most recovered factories, things started a little roughly. However, it looked like things would improve when the factory received a state subsidy. The workers worked around the clock, but didn’t seem to be making much money. Without the financial experience, they hadn’t understood that they were charging too little for their product -- and now it was too late.

The financial sustainability of the factory didn’t look too promising. However, in August, 2006, The Working World (known as La Base in Argentina), approached Metal Varela to offer them a micro-credit loan.

It quickly became clear that Metal Varela lacked the working capital to keep up with their orders. The factory would waste days waiting for their next cheque to arrive in order to buy raw materials and continue preparing subsequent orders. The Working World provided this working capital so that production wasn’t delayed.

Today, Metal Varela is embarking upon their 5th loan from The Working World. Slowly, they are building up efficiency and the hope is that - after a larger loan to replace their aging equipment - the workers will have built up enough of a reserve of working capital to stop relying on loans.

Today, many factories are now incredibly profitable 5 years after the economic crisis. A similar factory with which The Working World has a relationship, for example, has hired 21 additional workers.

Of course, there are problems of lack of experience when skilled labourers suddenly become their own bosses, managing budgets and doing other activities that were previously completely foreign to them. However, as there is no one-size fits all model, factories slowly navigate through their situations to see what works best for them. While many factories collectively decide that everyone will receive the same wage, Metal Varela chose to pay the administration board members and section coordinators 1 additional peso per hour ($6.50 instead of 5.50) in order to increase their sense of responsiblity.

As is to be expected, differences of opinion arise in the assemblies, where it’s one-member, one-vote. At Metal Varela, the admin board raises the issue of effectiveness and dedication, while a worker responds, “ we’re missing aluminum not productive capacity!” Another points to how difficult it is to be competitive with the capitalist market swirling around them.

However, what seems clear is that - whether or not everyone agrees - all have a say. The workers take their assemblies seriously. This new model of organization, decentralized and democratic, seems like it will stick around. It will continue to progress, even with an unwelcome economic and political environment just outside the factory doors.

Photos by Rachel Marcuse in Argentina can be viewed here, and she can be contacted at rachelmarcuse@yahoo.com.