'Intelligent discontent is the mainspring of civilization.' -- Eugene V. Debs

Monday, September 12, 2005

The Venezuelan Series (Part 2): Resistance to Privatization of Aluminum and Steel 

[This is a series of posts based upon my experiences during an August tour of Venezuela. For Part 1, go here. Comments can be e-mailed to me at restes60@earthlink.net.]

In my first post, I described the social activism that resulted from the creation of state owned steel and aluminum companies in Bolivar state. Such activism, initiated by leftists who consciously entered the plants to organize the workers in these industries, played an essential role in facilitating the emergence of Hugo Chavez. As Richard Gott has described in his recent book, Hugo Chavez and the Bolivarian Revolution, Chavez's failed 1992 coup attempt mortally wounded the neoliberal duopoly that governed Venezuela. If anything, it appears that the coup, and the subsequent outpouring of popular support for Chavez after his brief, successful televised exhortation to his supporters to cease opposition to the government, created a sense of urgency for people both inside and outside the country to accelerate plans for the privatization of state owned industries.


Steel privatization was already underway, moving forward despite a union reform movement that had commenced in the 1970s. During my time in Ciudad Guyana, I encountered two people involved in this endeavor, David Hernandez, described in Part 1, and Elio Sayago. Sayago emigrated from the Venezuelan city of Barinas in the llanos to Puerto Ordaz to work as an apprentice metallurgist for SIDOR, the steel company, in 1979. There were 18,000 workers in the plant. Hernandez had already started working there in 1977.

Both were involved in the La Causa R effort to create a truly independent union at SIDOR. As described by Gott, Alfredo Maneiros, a communist guerrilla who had split from the party when the insurgency ended, created La Causa R in 1970. Implementing a doctrine evocative of the approach taken by Rosa Luxemburg at the turn of the century, La Causa R sought to create a political framework for mass action without dictating political decisions and leadership. Activists thereafter struggled within SUTISS, the mainstream union that represented the workers in the plant. SUTISS, through its parent union, Fetrametal, was affiliated with CTV, the national union confederation politically aligned with one of the parties in the duopoly, Accion Democratica. Many workers believed that SUTISS was subordinating their interests to those of Accion Democratica, denying them a voice in the operation of their own union and issues of workplace safety. In 1979, La Causa R unionists took control of SUTISS, but the parent union, Fetrametal, removed the elected officers two years later.

Fetrametal's action had significant consequences, possibly preventing the emergence of a reinvigorated union that could have successfully resisted the privatization of the plant in the 1990s. Hernandez and Sayago went "underground" within the plant, organizing departmental committees. Sayago, educating himself at the university as he worked at the plant, was promoted to a maintenance position. By the late 1980s, La Causa R was resurgent, but it was too late. The Venezuelan economy had collapsed, and the duopoly was either unwilling or incapable of resisting neoliberal policies being pressed upon it by international investors and transnational corporations.

Shortly thereafter, the "reconversion process" began. CTV, and by extension, SUTISS, accepted privatization as instructed by Accion Democratica. After 15 years in the plant, Hernandez was fired in 1992. Privatization was subsequently completed in 1997, with the ownership interests of the state and the workers reduced to approximately 44%, during a period in which Chavez had been released from prison but had not yet taken power. Out of a workforce of 14,500, 10,000 employees were converted into subcontractors, without benefits and pensions. Sayago, as a member of the SUTISS Executive Committee, opposed illegal buyouts for workers in 1998 and 2000, resulting in his removal from the factory as well. CTV supported the buyouts, as well as Sayago's removal. In 2002, Sayago went to work in the nearby aluminum plant at CVG Alcasa as an environmental specialist. It is perhaps a telling indication of the Chavez regime's sensitivity towards the need to attract foreign investment and technology that no effort has been made to renationalize SIDOR.


Aluminum was the bigger prize. Again, as with La Causa R and SUTISS, Estelito Garcia and Fernando Serrano, officers in the union SUPRALUM, a union that represents 2,200 workers at CVG Venalum, described a process by which rebellion against union acceptance of adverse working conditions inevitably resulted in resistance to privatization. In 1991, Garcia was originally a supervisor, but was appalled by the day to day injustices that he observed as workers were habitually mistreated. The union was subordinate to the company, directed by a group of people that went along with management.

Serrano worked in the reduction area, and faced pressure to increase production, motivating him to seek better treatment of workers, advocating for benefits such as better pay, housing and education. Privatization of aluminum moved forward in the mid-1990s, despite domestic opposition. There was a conscious decision to depreciate the value of the companies, as the law governing privatization prohibited new investment. CVG Alcasa, the predominately domestic aluminum producer, was deprived of any new investment from 1996-1998 as the company awaited privatization, with the facility bordering on being non-operational, according CVG Alcasa public affairs officer Antonio Guzman. At CVG Venalum, the international producer, more than 60 of the facilities 905 alumina pouring pots were out of service.

Ironically, it appears that the transformation of the unions in aluminum into more radical instruments of worker self-interest occurred after La Causa R emerged triumphant in the steel industry. Yet the aluminum unions stopped privatization, and the steel unions did not, for one obvious reason. Steel privatization was first. By 1998, Hugo Chavez was running for President, and it was not possible to complete the privatization of aluminum prior to the outcome of the election.

Chavez halted the privatization of aluminum after taking office, permitting both companies to invest in the upgrading and expansion of their facilities. CVG Alcasa is completing a new line that will increase production from 250,000 tons annually to 460,000 tons. CVG Venalum is considering installing a new line that would increase production annually from 480,000 tons to 600,000 tons, and employ 2,200 people during two and a half years of construction. Now, only 2 of the 905 alumina pots are out of service. Steel worker subcontractors no doubt wonder whether SUTISS might have been able to delay the completion of steel privatization until 1998, gaining enough time for Chavez to kill it as well, if not for Fetrametal's removal of La Causa R leadership in 1981.

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