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A worker handles a copper tube at the Union y Fuerza Workers Cooperative in Buenos Aires, Argentina. Photo by Diego Giudice, KRT

At a metals plant in Argentina’s capital, 83 men who once rarely got above the factory floor now run the whole show. There is no boss; they make their decisions at a group assembly. There are no outside investors; the workers split all profits. Argentina’s bankruptcy judges created this new wrinkle in the Industrial Revolution over the last two years by turning over more than 140 factories to the workers.

For the most part, the new worker cooperatives are succeeding through ingenuity and pluck. One of the oldest cooperatives runs the dank and cavernous old Union y Fuerza factory in Buenos Aires, where infernally hot melted copper is poured by hand from caldrons into molds to fashion tubes, coils and pipes. “You never imagine you will be leading the company where you worked,” said Roberto Salcedo, 50, who joined the plant in 1986 as an electrician and now is the cooperative’s elected president. “We have learned so many things.” Union y Fuerza, which had been dying, now can’t keep pace with demand. And profits are easier to come by, workers say, since there’s no thick layer of management to add to production costs.

“Things depend totally on us,” said Mauricio Espinosa, 46, a former purchasing clerk who’s in charge of quality control. Work hours and even job assignments are adjusted weekly depending on production demands. Such flexibility would have been unthinkable before the unionized plant turned into a worker cooperative in January 2001.

Necessity is the mother of the new flexibility, said Norberto Monzon, 36, who was elected president of Ghelco S.A., another worker cooperative. Ghelco makes fruit pulp for ice cream, icing for cakes and about 1,800 other dessert products. “We all had worked in the plant,” said Monzon, and the co-op “really is about dignity and supporting our children.” While the plant’s bankruptcy was pending, he recalled, workers slept there in shifts to ensure that machinery was not removed. They swarmed a bankruptcy judge on the street to press for leniency and back wages. In February 2002 they won the company’s assets in compensation.

Learn as you go

During the perilous first six months, workers’ families collected cartons and other recyclable materials on the streets to earn cash to buy raw materials. And the 43 remaining workers learned how to run the entire company. “We had to go make visits as salesmen. This was new. We said we were the workers and now we are the managers. We didn’t know how far we could take this,” recalled Miguel Ibanez, 43, now Ghelco’s general manager. He coordinates the plant’s daily activities, then works alongside colleagues on nine-hour shifts.

After a tough start, Ghelco workers now earn about $280 a month, $100 more than they did before. At Union y Fuerza, workers say they earn three times what the former private owners paid them. Worker cooperatives sound Marxist in the sense that workers control the means of production, but their success depends on capitalist principles of supply and demand in an open market. “We are within the capitalist system, but the economy is not just capitalist, Marxist or socialist. It must serve to make man happy,” said Luis Alberto Caro, a lawyer who has helped factory workers take over more than 70 plants, including a shipyard.

The essential principles, Caro said, are avoiding debt, forging close relationships with buyers, and setting limited and realistic expansion goals. That stands in sharp contrast to Argentina’s business style for much of the 1990s, when the country’s peso was pegged on par with the dollar. The peg made Argentine products more expensive than imports and led industrialists to close factories. Before closing, many Argentine factories took out large loans, moved the money abroad, then declared bankruptcy.

Financial troubles

The wave of fraudulent bankruptcies was among the factors that forced Argentina to announce in December 2001 that it would default on $151 billion in government debt. Later it seized citizens’ savings accounts and devalued the peso by 70 percent. “The situation of our country made it impossible to find another job at our age,” Monzon said. The cooperative factory movement is too small to lift Argentina’s economy, said Gabriel Fajn, a sociologist at the University of Buenos Aires. “But it has significance and symbolism for the workforce, both the working and unemployed.” As if to underscore that, a group of preschool teachers waited in Ghelco’s lobby recently for advice. The owner of their nursery school hadn’t paid them for months, said teacher Gabriela Farace, and they wanted help in forming their own cooperative.

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—Mercury News, March 17, 2003