Venezuelan Government Pays Worker Benefits in Ailing Aluminum Industry

Mérida, July 18th 2009 (Venezuelanalysis.com) -- On Thursday, Venezuela's minister of basic industries and mining, Rodolfo Sanz, announced that the state will inject more than 213 million bolivars (nearly US $100 million) into four majority state-owned aluminum companies in the southeastern state of Bolivar to pay workers' benefits and salaries, as the companies weather a sharp drop in aluminum prices in the international market. The state holding company Venezuelan Corporation of Guayana (CVG) will grant the funds to the companies Alcasa, Carbonorca, Bauxilum, and Venalum in three installments in July, September, and October of this year, and will continue to provide bailouts until the sector recovers, according to Sanz. Sanz said the measure, which follows a previous injection last April of 430 million bolivars (US $200 million) to pay off debts to the companies' service contractors, conveys the government's commitment to the stability and health of the workers and the industry. The aluminum sector faces a "chronic deficit" as a result of the world economic crisis, which has caused the price of aluminum on the international market to drop from more than US $3,000 per ton to US $1,600 per ton, while the cost of production in Venezuela is currently US $3,700 per ton, Sanz said. The sector, which employs more than 22,000 workers, faces an estimated US $1.3 billion deficit this year, according to local news reports from the region. Sanz's announcement followed three days of strikes by a hundreds of aluminum workers who clamored for overdue wages and the replacement of corrupt company managers. The protesters included the members of the United Socialist Party of Venezuela (PSUV), such as the general secretary of the Alcasa worker union José Gil, as well as members of the oppositionist union current Causa R. Local witnesses report that members of right wing opposition parties Primero Justicia, and Acción Democrática were also involved. Sanz met with the protestors in the CVG on Thursday and Friday to discuss the latest bailout and the recovery plan for the companies. In the meetings, the workers called for the ouster of company managers who, they say, disregard workers, violate union autonomy, and have pilfered the state's bailout funds. Sanz raised concern about the "catastrophic" alliance of some of the leftist union currents with right-wing unionists and opposition parties. He urged the leaders of the protests to "get their heads in order," and said that if these companies were under private management during this crisis, the factories would have been shut down rather than bailed out using public funds. He asked for the workers' collaboration to maintain production as the government carries out its recovery plan. According to Alexis Adarfio, a well-respected aluminum worker and union leader who did not participate in the protests, the "immense majority" of the aluminum workers are willing to work together with the state management to restore the sector. The protestors are out of sync with this majority of workers, and "are small groups with a lot of media power," Adarfio told Venezuelanalysis.com in an interview. "The revolutionary government, together with the workers, with the goal of maintaining employment, is fulfilling its economic obligations to the workers," said Adarfio, who is also an educator in the government's socialist formation program "Morality and Enlightenment" (Moral y Luces) in Bolivar state. State intervention is also needed in several other privately owned companies in the aluminum sector which have been "collapsed by the crisis of capitalism," and whose workers are suffering layoffs and plant closures, Adarfio said. Adarfio's analysis was echoed by other prominent union leaders in the region, including Jose Meléndez, the general secretary of the United Steel Industries Workers Union (SUTISS). Meléndez, from the pro-revolution union current Marea Socialista, was one of the key leaders of the 16-month struggle against the private management of Venezuela's largest steel plant, Sidor, until the plant was nationalized in April 2008. Meléndez said the "opportunist" protestors are "taking advantage of old problems that we drag along with us." Meléndez specifically denounced José Gil, and said, "The objective of these pseudo-union leaders is not to solve these problems but rather to complicate the situation... and confuse the sector regarding the true solution that still has not been achieved: Worker control of basic industries." Last May, President Chavez, Labor Minister Maria Cristina Iglesias, and CVG managers joined worker unions in the aluminum, steel, wood, and gold industries to lay out a decade-long plan to increase worker control in these industries and to bring the entire chain of production, from the mine to the finished product, under Venezuelan control. According to National Assembly Legislator Angel Rodriguez, previous governments had deliberately under-invested in the state-run basic industries such as aluminum over the course of decades in order to justify the eventual privatization of the industries. Thus, on the eve of Chavez's election in 1998, Venezuela was poised to further buy into the neo-colonial model of production in which Venezuelan companies export raw materials and import manufactured goods from multi-nationals that reap most of the profit, Rodriguez, who heads up the Energy and Mining Commission in the National Assembly, argued. On Thursday, in an interview on the state television station VTV, Rodríguez urged the workers in Guayana to combat the right wing within their ranks, and join the government to reignite the basic industries. "Today the workers and union leaders of the companies of Guayana know they have a government that responds and will continue responding, despite the crisis," said Rodríguez. "The workers know that the way out of the crisis in the sector is to work together and for each of them to participate actively." Meléndez, Adarfio, and other proponents of the new "socialist" plan initiated by the government and the workers last May acknowledge that some of the managers at state-owned companies continue to support the neo-colonial model. "Some of them, dressed up as legislators, take advantage of their parliamentary immunity to work to maintain the privileges that still are upheld in the companies," said Meléndez. Meléndez urged President Chavez "to listen to the voice of the workers who are committed to the revolutionary process," and to not allow the right wing oppositionist groups to sabotage the efforts of these workers to express legitimate grievances and denounce corrupt management. Adarfio told Veneuzelanalysis.com that the basic industries already took a step toward genuine worker control last May when the workers and the government sat down together in a working group focused on worker control. In Adarfio's view, the vision, which is still in formation, is to convert the basic industries to worker-controlled, socialist industries over the course of 15 years. Meanwhile, private business associations urged the government to continue bailing out the basic industries, and to create a recovery plan in collaboration with the private management, not the workers. "The investments and bailouts are necessary for the management of the companies, since the basic industries are of great importance for the region," said the president of the local chamber of commerce, Hector Cardozo. He was echoed by Guido Fratini, the president of Venezuela's largest private business federation, FEDECAMARAS, in Bolivar state.