The Recovered Companies Workers’ Struggle in Argentina

The Theoretical Framework

Nicolás Iñigo Carrera (2008) conceptualizes the period from 1993 to 2003 in Argentina as a cycle of rebellion in which state institutions and others belonging to the capitalist system were challenged by most of society. The takeover of a company involves a radical break with one of capitalism’s fundamental values: private property. In a sociopolitical context in which legitimacy is stronger than legality, the recovery of a company, initially illegal, manages to become social practice. Thus, its workers’ struggle imposes legal changes that allow its practices to be institutionalized when the cycle of rebellion gives way to a cycle of governance. According to Raúl Zibechi (2009), “good governance” seeks to displace the social movements and reposition the state as a central actor. In order to “create state” in the practices of the mobilized sectors, it employs new mechanisms of control designed to neutralize the forms of solidarity developed during the struggle. By weakening the links and knowledge that give these mobilized sectors autonomy, governments have a better chance of controlling them. These mechanisms, rather than hindering the phenomena in question, bring other elements into play so that the phenomena end up canceling themselves. This is not just a matter of repression but one of “regulating reality by making some elements act on others, annulling them” (Zibechi, 2009: 104–105).

Initially the recovered companies created their own organizations, which were distinguished from economic solidarity organizations by the action that gave rise to them: the “recovery” or reappropriation of the means of production through the expropriation of the ruling classes. Gradually, the recovered companies were institutionalized through the legal structure of the cooperative, but this did not guarantee their economic consolidation. The workers had to confront a market from which these companies had been expelled. Many studies of recovered companies, focusing on the process of becoming cooperatives, have tended toward a more general analysis of self-management and economic solidarity. M. Luis Razeto (1993) has pointed to the autonomous development of these practices, while other writers, such as José L. Coraggio (2004), have argued that a solidary economy cannot grow without the support of the state. The theories of value and accumulation developed by Karl Marx are useful for investigating the economic underpinnings of these experiments and for analyzing these mechanisms of intervention as new forms of governance.

Antecedents to the Cycle of Rebellion

Confronted with the class struggle unleashed on several continents during the 1960s and the global economic crisis of the end of that decade, the bourgeoisie launched a general campaign to discipline the working masses and restructure the productive model with the objective of recovering rates of profit. In Argentina, the bourgeoisie managed to dismantle social movements and impose a new model of the free market, installing a dictatorship that did not hesitate to employ bloody repression and discipline. The new model was structurally consolidated in the 1990s, guided by the principles of the Washington Consensus. Methods were introduced that impacted the trade balance, aggravating the trade deficit ¹ and leading to the closing of thousands of small and middle-sized businesses. ² There were labor reforms that precipitated a decline in real wages ³ and intensified the labor process, and there were laws that made labor flexible and decrees that allowed unfair dismissal. In 1998, Argentina entered into a recession, a situation that accentuated the deterioration of the working conditions of employees and an increase in unemployment. In 2002, the unemployment rate reached 24.26 percent, the highest level in history (Ferreres et al., 2005: 466).

The period 1976–1993 was characterized by a retreat of political forces and social fragmentation. Beginning in 1993, direct actions such as street blockades, riots, and factory takeovers proliferated. While at first these actions were mostly spontaneous, the protests began to take democratic forms such as neighborhood assemblies, piquetero (picketing) groups (organizations of unemployed workers), and company takeovers. Although these movements made their own claims, all of them were a response to the economic crisis and challenged the ruling classes’ control over the fate of the population.

The Struggle for the Recovery of Companies

The first recovered companies emerged from conflicts over the reduction or nonpayment of wages, the elimination of social benefits, and layoffs. The occupation might last several months without the legal system’s finding a solution to the problem, and in the meantime workers had no access to wages or severance pay—a situation that led them to resume production. At first they were not aiming at controlling the company, but in the process of protecting their source of income they developed new relationships of solidarity and more horizontal forms of organization that called into question certain aspects of the established social relations. Thus the majority of recovered companies were ruled by decisions made in general assemblies with the participation of all workers. In many of them all the workers received the same wages according to hours worked no matter what kind of work they performed, breaking with the wage differences imposed by the socially established hierarchies of different forms of work (manual/intellectual, professional/nonprofessional, qualified/specialized). Some recovered companies became meeting places, fostering the creation of solidarity networks with different sectors of the community. Thus, in 2002, 36 percent of the recovered companies were conducting activities that were not exclusively related to production, such as parties, training, political meetings, and cultural events (Trinchero, 2002: 23). Workers experimented to some degree with other forms of work organization, including the rotation of positions and changes in the chain of production. For example, the workers of the ceramics company FaSinPat moved the glazing table from the inside of the chain to its outer edge, where workers were no longer isolated and could move about the factory more easily. As one of them said (Pablo, interview, December 2004), these practices were related to the process of the workers’ struggle:

If you occupied a factory for ten months, sleeping beside your fellow workers . . . when you started to work you might be a manager and your comrade an assistant, but that relationship changed: you slept together for ten months, you confronted the police. The two of us were equals. . . . When there is a process of struggle, these things change the internal relationship.

Statistical data seem to confirm this, at least with regard to wage differences. In 2004, 71 percent of recovered companies that had been occupied had no wage differences, while this practice was observed in only 37 percent of recovered companies in which the workers had not had to resort to occupation (Trinchero, 2005: 24).

Workers’ Organizations

The first recoveries emerged at the end of the 1990s as isolated phenomena. In 2001, these experiments multiplied and the workers began to organize. Their political differences influenced the strategies they employed, leading to the establishment of two organizations: the Movimiento Nacional de Empresas Recuperadas (National Movement of Recovered Companies—MNER) and the Coordinadora de Fábricas Ocupadas y Trabajadores en Lucha (Coordinator of Occupied Factories and Workers in Struggle—Coordinadora). The workers could not keep these businesses functioning for very long without acquiring legal status, and the two organizations proposed different strategies for responding to this situation. The MNER called for the expropriation of the companies by the state and their transfer to the workers and the Coordinadora for nationalization under workers’ control. These strategies corresponded to different ideological traditions. While the MNER pointed to “national and popular” production, an objective strongly shaped by Argentina’s Peronist tradition, the Coordinadora emerged from the proposal of the workers of FaSinPat, who had been struggling for years to democratize their union and use it as a tool for establishing worker autonomy—an objective that had its origins in class unionism.

In October of 2001, the workers of Industrias Metalúrgicas y Plásticas Argentina called a meeting to build a movement to reinforce recovered companies, and the MNER emerged from this meeting. The use of the term “recovery” came from this organization, for which it meant the “rescue of production, employment, and the dignity of the workers” (MNER, 2003). The recovery of these companies sought to defend “national sovereignty,” since it involved “national production aimed at keeping its proceeds in the country” (Ignacio Saavedra, former MNER member, interview, December 2004).

The political makeup of this movement’s leadership reflected an alliance between the most conservative sectors of this current, represented by Luís Caro, and the most progressive, represented by Eduardo Murúa, but this alliance was short-lived. A significant part of the recovered companies led by Luís Caro broke with the MNER and formed a nongovernmental organization known as the Movimento Nacional de Fábricas Recuperadas por los Trabajadores (National Movement of Factories Recovered by Workers—MNFRT). This organization, which claimed to be apolitical, aimed to “recover jobs” and better economic and working conditions “without ambitions of social transformation” (Luís Caro, president of the MNFRT, interview, December 2004). Meanwhile, the leaders of the MNER began to devise new political strategies for consolidating its forces. When the new electoral period began, they sought to occupy positions within the government, running their leaders as candidates and winning a seat in the City of Buenos Aires legislature. The 2003 presidential election took place in a climate of delegitimation of the political system, and the new government sought the support of certain protest groups with the aim of guaranteeing social stability and consolidating its legitimacy. In this context the MNER developed alliances within the political and economic system (see Hirtz, 2011). Some years later, this strategy would turn against it, with differences over the ways of dealing with the government provoking its fragmentation. Today the movement is disappearing; many of the recovered companies that were part of it established the Federación Argentina de Cooperativas de Trabajadores Autogestionados (Argentine Federation of Cooperatives of Self-managed Workers–FACTA) in December 2006 with the objective of creating “a great social economic movement in which recovered companies will participate together with other cooperatives and companies of solidary economies” (Fabio Resino, vice president of FACTA, interview, April 2007).

Whereas the organizations just mentioned opted for a cooperative strategy, the workers of the Coordinadora called for nationalization under workers’ control. Essentially led by workers from Brukman and FaSinPat, it was different from those organizations in that it participated in other workers’ struggles whereas they participated only in mobilizations related to the defense of their own particular interests. In 2002, the demand for nationalization under workers’ control brought together a dozen companies that became emblematic of the recovered companies. Their struggle managed to transcend the boundaries of the factory, which became a place where not only goods and services but also ideas were produced. The risk of eviction led the workers to hold regular assemblies to analyze the situation and seek alternatives that would allow them to continue producing. The majority of the assemblies were open to the public, turning these factories into places of interaction in which activists from various organizations came together and neighbors offered their solidarity and debated over strategies.

Raúl Godoy, a member of the Coordinadora and a worker at FaSinPat, expressed the lessons of this struggle as follows:

The most important thing in this struggle, as Celia from Brukman said, is that it shows that if workers can manage a factory we can also manage a country. . . . The takeover of a company is not a definitive solution to the capitalist market in which we are immersed and in which we are forced to buy and sell our products. . . . That is why we think that nationalization is a solution. . . . What we want is not to keep the factory as our own business but to manage it in the service of society.

The demand for nationalization under control of the workers emerged as a rejection of “business administration” that involved the formation of cooperatives in favor of focusing on worker solidarity both inside and outside of the factory.

Despite the vigorous struggle that developed, the workers did not manage to achieve nationalization under workers’ control, and, faced with the necessity of finding a legal framework that would protect them from attempts to evict them, had to reevaluate their strategies and form cooperatives. The majority of the recovered companies that made up the Coordinadora went on to form organizations that responded to their most immediate interests: recovering their sources of subsistence. However, the workers from FaSinPat formed a cooperative without abandoning the demand for nationalization of the factory, continuing their struggle together with the ceramics union (whose main leaders were workers in this recovered company) and receiving support from two new ceramics factories in Neuquén.

In this context, the intellectual and political debates about the role of the recovered companies were strongly marked by the tension between a pro-cooperative vision and the view that cooperatives could not, in the long term, ensure the construction of alternative spaces and practices for the struggle against capitalism.

Consolidation of the Recovered Companies

The cycle of rebellion peaked with the spontaneous clashes of December 19 and 20, 2001. For two days the population occupied the streets under the slogan “Throw them all out!” Soon after fierce police repression that left over 35 dead and many arrested, the nation’s president, F. de la Rúa, resigned and was succeeded by three interim presidents who resigned consecutively until the arrival of Eduardo Duhalde in January 2002. This episode marked the declining moment of the struggle and the beginning of the end of the cycle of rebellion, which had achieved some political-economic transformations that improved living conditions for the people. One of the first steps taken by the Duhalde government was a historic increase in social spending that was carried out, in the midst of an economic crisis, through a moratorium on payments on the foreign debt and export taxes. Duhalde instituted new mechanisms of control and inaugurated a new political cycle that was consolidated by his successor, Néstor Kirchner, opening a new cycle of governance in Argentina. The challenge to private property, the knowledge constructed by the workers, and the development of democratic and self-management practices by the recovered companies had represented a threat to the system from the beginning, and therefore the state sought to govern these struggles.

The recovered companies had achieved the passage of the first laws of expropriation in the public interest to guarantee the constitutional right to work. Until 2001, such laws had been used only in connection with projects on the state level. As of that year, provincial legislatures began passing expropriation laws for certain recovered companies, arguing that, in a context of scarce employment, closed factories should be preserved for the benefit of the whole of society. In doing so the provinces agreed to indemnify the assets, which in the majority of cases were to be returned by the workers. To date almost none of the expropriations have been compensated for and most of the deadlines have expired, requiring new laws to delay the commitment and thus creating a precarious and unstable legal framework for the recovered companies.

The relations established between the governmental powers and the recovered companies to carry out these expropriations are complex. Each recovered company has to present a bill before the provincial legislative and executive powers. The legislative power is in charge of declaring the “public interest” of the assets to be expropriated. The executive power authorizes the expropriation and presents it to the judge, who determines how the expropriated property is to be used. Thus the granting of the expropriation depends on the political will of the governmental powers, limiting the field of action of the workers and gradually distancing them from their most radical demands.

Not all the recovered companies have achieved expropriation, and the bureaucratic steps to obtain it can last years, sometimes without result. Therefore, the workers have pursued short-term ways of avoiding eviction. One of these has been resorting to Article 190 of the Bankruptcy Law, which was proposed by the MNER and incorporated into the law in April 2002. This law grants the workers the right to request to continue operating until the company is liquidated provided that they form a cooperative. By changing the Bankruptcy Law and introducing the requirement of forming a cooperative to be eligible to manage the company, Duhalde’s government legalized a particular form of action. The companies recovered before 2002 were mostly responses to spontaneous processes and had no legal standing, but they did have legitimacy in the face of attempts at eviction through the solidarity of the population. Once this way of taking over the company was institutionalized, workers who did not adopt it were evicted. Thus the reform of the Bankruptcy Law served as a control mechanism that regulated the recovery of companies rather than prohibiting it, satisfying the workers’ need to recover their sources of income while weakening their solidarity. Many workers witnessed the transition to a new phase in which the recovery was determined not by struggle but by legislation and the capacity for negotiation.

The case of the textile company Brukman was an instructive example for all the experiments that followed. This factory was recovered in December 2001 by its workers, who, along with the workers from FaSinPat, were the main components of the Coordinadora. For a year and a half they produced and sold their products without having legal status, since they were demanding nationalization under workers’ control without having formed a cooperative. They survived two attempts at eviction through their energetic struggle and the support of the people. However, on April 17, 2003, there was another eviction attempt, and this time it involved brutal repression that left many injured and arrested. The state deployed an enormous number of police to control the protests and blocked the streets surrounding the building for nine months. Finally, the workers achieved the expropriation of the factory on the condition that they form a cooperative; nine months without access to work were more than enough to make them do so.

The lawyer Luís Caro was important in this process; he had been leader of the MNER until 2002, when he left it to found the MNFRT, declaring himself its president. He had been an activist in the Partido Justicialista (Judicialist Party—PJ) since his youth in the province of Buenos Aires, of which Duhalde (whom he called a “personal friend”) was PJ governor in 1991–1999. He managed to achieve the expropriation of Brukman very quickly. For him the most important thing was to “depoliticize” the workers’ struggle:

The first time that I went to speak to the Brukman workers it had been five months that they had been in the tent. I told them: “I came to help you enter. But for that, we have to depoliticize this conflict! . . . What do we want, to change Argentina’s social structure or to enter the factory? We have to have this clear: this is nourishing!”

From this it is apparent that the Brukman resolution involved not only a juridical act but also a political one. Thus Caro led the workers to accept the established rules if they wanted to avoid state violence. “What happened with Brukman? They did not accept the cooperative. They said, ‘Nooo, we want workers’ control’ . . . this and that. And, well, what happened? They were evicted!” (interview, December 2004). State violence made the workers responsible for defending their demands, and tensions were eventually resolved by imposing the technical aspect of the recovery on the political conflict. Thus the reform of the Bankruptcy Law and the expropriation of certain recovered companies became mechanisms of control, mediated in this case by the political intervention of Caro, who led a movement representing more than a third of the recovered companies.

The eviction and repression of Brukman workers took place three days before the presidential election. This was not an isolated case. During the preelectoral period there was a great escalation of repression of social struggles, and social movements began to experience ruptures, accentuated by the electoral process, that caused political realignment and internal conflict. The new president, Néstor Kirchner (nominated and backed as the PJ candidate by Duhalde), managed to resolve the economic, political, and social crisis. He positioned himself in an anti-neoliberal discourse, and in a short time he had obtained the approval of 75 percent of the population, including union leaders, progressive intellectuals, and certain social movements and human rights organizations. In this way his government achieved good governance, succeeding in displacing the social movements and repositioning the state as a central actor representative of the struggle against the “neoliberal right.” Given the national government’s favorable discourse with regard to the recovered companies, many of them called for a national expropriation law, but both the Kirchner government and its successor, that of Cristina Fernández, rejected this option.

State power also affected the internal operations of many recovered companies. The creation in 2004 of the National Program of Promotion and Assistance to Self-managed Work and Microenterprise is an example of the way hierarchical relations at the heart of these companies were promoted. To qualify for this program (the only way to receive a state subsidy), workers had to present a specific project, and Ministry of Labor officials trained members of the company’s administrative council to employ business management prescriptions. Training certain workers and not others produced a group specialized in management and another that performed manual work, leading to the destruction of the workers’ horizontal organization and the knowledge acquired in the process of struggle. Understanding the way in which these mechanisms of control were imposed requires an examination of the economic processes by which the recovered companies developed.

Economic Processes

In order to resume production, ⁴ the workers of a recovered company had to work à façon (producing from materials provided by the customer), since they did not have the capital to purchase raw materials or pay for parts and maintenance of the premises. In 2010, 49.5 percent of recovered companies were still doing so, at least for part of their production (Ruggeri, 2010: 33–34). The workers received the income necessary to produce a certain quantity of products in a certain period of time. The supplier firm established the price for the work and determined the rhythm of production. At Brukman, for example, the workers had their own brand, but the majority of production was à façon. The suppliers put in their orders for each season, temporarily intensifying the rhythm of work and sometimes increasing the length of the workday. Once the product was delivered, the quantity of orders abruptly declined. Juan Carlos, a Brukman worker, pointed out: “We no longer have a boss. Now he is on the street. . . . It’s the clients we work for.” The majority of workers interviewed shared this view, because while possessing the means of production they saw themselves as obligated to sell their labor to the supplier companies, who established the price of the product in terms of the value of that labor. ⁵ Thus it was the suppliers who appropriated the surplus value.

At the same time, recovered companies that managed to sell their products on the market directly were also not entirely autonomous. The production of goods and their exchange depended on the oscillations of the market. Karl Marx’s (1887: 196–208) theory of value and accumulation allows us to understand the forces that regulate the exchange of commodity. In capitalism, companies constantly seek to introduce new methods that permit them to increase production and the intensity of work to increase their profits. Companies that employ these innovations reduce their production costs, thus obtaining surplus value compared with their competitors who do not. Competition between capitalists induces them to eliminate from the sale price of their goods at least some of this abnormal surplus, since by giving up even part of it they can achieve a normal rate of profit. Gradually these innovations are generalized to the rest of the factories, inducing an equalization of profit rates. Companies that lack access to or do not employ these innovations are excluded from this equalization and are at risk of disappearance. ⁶

Recovered companies cannot exist outside the market. Workers can settle for a lower-than-average rate of profit because there is no capitalist proprietor, but they must ensure a certain profit to invest in the further production of goods. As Chaplin, a worker at FaSinPat expressed it, the difficulties in guaranteeing this rate of profit are many:

In 2009, the global crisis provoked an important deceleration of construction in Argentina. . . . For us this was a hard blow, not only because many construction projects were paralyzed but also because this is an old factory, with technology that becomes more obsolete every day. . . . Furthermore, the ceramics industry, which was oriented to export, shifted to the internal market as a product of the crisis. This generated very strong disloyal competition, as in any capitalist system. . . . We are betting on social transformation, because without it these processes will end sooner or later. Even though we have 10 years in resistance and are convinced we can continue doing it, we also know that it is in a framework in which profound political transformation can happen.

As this testimony and our fieldwork with the recovered companies show, one of the major difficulties for these cooperatives was that they did not have the capital available to invest in new technologies that would allow them to increase labor productivity. Access to capital was practically impossible for these workers; since they were not property owners, they had nothing to offer as collateral.

Although labor is a creator of the value of a commodity, this value is determined by the time that is socially necessary for its production. ⁷ The introduction of new technology in a particular branch lessens the time necessary for the production of a good, which means a depreciation of its value. The prices of goods (of the same category) are determined by their social value, which depends on the average conditions of production of the industrial branch they belong to. But because the conditions under which companies produce are unequal, the individual values of their products are also unequal (Marx, 1887: 196-208)

Faced with the progressive decline of the social value of goods induced by the employment of methods for intensifying labor and the introduction of new technologies, recovered companies can survive only by increasing intensity and/or increasing labor time. ⁸ Although in the companies we observed the workers did not always exceed the rhythm of labor or the normal work week ⁹ (which averaged 40 hours ) we noted that, as the economic consolidation of the company advanced, self-management and solidarity processes were subordinated to issues linked to production. While, as we have seen, the political choice of the majority of the recovered companies was to limit solidarity to the internal milieu, today these practices are increasingly being relegated. In 2010, in contrast to 2005 (see Trinchero, 2005), 46 percent of recovered companies employed workers who were not members of the cooperative, and the majority of their workers were under contract (Ruggeri, 2010: 51–52). Seventy percent of recovered companies practiced job rotation, but this tendency declined in management positions: in 67 percent of recovered companies, members of the administrative council held their positions for more than one term (Ruggeri, 2010: 49). These facts indicate that the recovered companies’ principle of self-management characterized by the disappearance of wage differences and by decision making by a general assembly is being modified.

These observations cannot be generalized. The FaSinPat workers show that the workers’ political will can confront these limits. Before its recovery, FaSinPat belonged to Zanón, one of the largest and most modern ceramics companies in Latin America, and the company’s technological condition allowed it to position itself more easily with regard to the market. However, 10 years after the recovery, FaSinPat technology has begun to age compared with that of the large companies with which it must compete. The workers must redouble their efforts to consolidate the company and maintain links of solidarity, and to date they have managed to meet this challenge.

Conclusions

The cycle of rebellion that began in 1990, characterized by the strengthening of movements that aimed for autonomy, was replaced beginning in 2003 by a cycle in which the links and knowledge forged in the struggle were weakened by new mechanisms of control. The recovery of companies was imposed as a social practice, finding an institutional framework in the Bankruptcy Law. This process implied a political transformation, since this law concerned not just the workers of existing recovered companies but all workers who might apply for it when facing the bankruptcy of a company.

Responding to the workers’ most urgent needs, the state imposed a procedure for taking over a company and placed conditions on the organization of production and management. The legalization of the dependence of the workers on the state in obtaining expropriations, loans, and subsidies reinforced tensions and weakened the links the workers had constructed. Workers’ efforts were aimed at the economic consolidation of their companies. At the same time, the political-legal difficulties in achieving expropriations subjected them to judicial instability and reinforced their vulnerability in the market by preventing them from obtaining credit for technological renovation. The way in which recovered companies were institutionalized was aimed not at repressing their development but at forcing workers to compete in a market in which they had to use all their efforts to maintain productivity, abandoning antisystemic elements developed in the process of struggle such as direct democracy and solidarity.

Despite the institutionalization and disarticulation of social movements achieved during this cycle, these experiences of struggle, characterized by more horizontal forms of organization, the reappropriation of the means of production, and the experience of autonomy, are lessons for the working class that will be the referents for future organization for confronting capitalist exploitation. The movement has created a new instrument for the workers’ struggle. Today, many workers are not waiting to be faced with the closure of a company to respond; occupation of the factory when management rejects a labor contract has become a new social reality, and capitalists are aware that an occupied factory can turn into a recovered company.