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Twenty years after the explosion of the crisis and the phenomenon of recovered businesses and factories, this alternative form of labor management has been able to sustain itself in spite of the difficulties of self-management and legal obstacles.
It all starts with a gutting. After failing as a boss, the owner decides to take everything he can, starting with transfering funds irregularly and committing fraud. He stops paying taxes, supplies, providers, and workers. Aldo still remembers that moment that, in the case of La Litoraleña, took place in 2015: “The first days, he didn’t tell us anything. The supervisor would tell us: ‘Tomorrow, it’ll be deposited. Tomorrow, tomorrow, tomorrow’. And at that time, when we were being paid 40,000 pesos [US$330 a month], he was depositing 2,000 pesos [US$16.64]. He was stalling and stalling. He was fine, we were the ones who suffered. And we had families. We suffered a lot.”
The empanada and pascualina [traditional chard or spinach pie] factory where he had been working for more than two decades was heading for bankruptcy. For Aldo, and for his nearly one hundred compañeros, resignation meant unemployment, loss of seniority benefits, and for the most senior workers, the loss of their retirement. It also meant a broader defeat: in addition to the lost jobs, there would be the loss of accumulated experience, of the know-how that the workers had developed over the years, and of the role that the factory played in the neighborhood. They lost, their families, their neighbors, everyone lost. “Until we decided to take over the company. It was hard. But there was no other way.”
On October 27, 2015, the employees of this factory in the Buenos Aires neighborhood of Chacarita, gathered in an assembly, made a decision: to occupy the facilities and stop activities after months of overdue pay. By then, the company was in insolvency proceedings. The owner had written 800 bad checks, and the accumulated debt was more than ten times the company’s assets — he owed money to everyone. And when he learned that the employees had taken over, he put an end to his empty promises and sent telegrams to 29 of them to let them know they were fired. But his corporation was disappearing, and, in effect, was no longer in his hands. Faced with the bosses’ abandonment and inability, his workers started turning it into a recovered company.
“There are three points in time that are common to most of the recovered companies: occupation, resistance, or the organization of that occupation, which means opening the factory doors to the community, receiving solidarity from other experiences, rethinking, looking for financing, strike funds to be able to sustain that occupation, that resistance. And then, there is a third moment, which is production. And that decision can take more time or less time, it can be more traumatic or less traumatic. In this case, it was very fast,” explains Fabián Pierucci, the president of La Litoraleña Worker Cooperative, which currently employs 48 people.
He was not part of the company before it was occupied, but joined when the formation of the cooperative was already underway. He arrived as a representative of the Federación Argentina de Cooperativas de Trabajadores Autogestionados (FACTA), which emerged in 2006 from the different groups of recovered businesses that proliferated at the beginning of the decade. Its objective in La Litoraleña was to collaborate on training, technology transfer, and management tasks. And also something else: with Grupo Alavío, he was filming a series called “Redes de Trabajo y la Autogestión” (Work Networks and Self-Management). He filmed the whole process of the occupation of La Litoraleña and what came next. And he never left.
The situation at the outset was critical. The word “cooperative” set off alarm bells. Suppliers did not want to sell. Customers did not want to buy. The confectioners’ union had said it would join them in the struggle, but when they formed the cooperative, they left, too: without a new boss at the helm, they lost their monthly fee. The administrative staff, managers, foremen, salesmen, most of the drivers, and all those who were closer to the bosses followed the same path. Of the original 115 employees, only 70 remained, the shop-floor workers. The entire hierarchy had vanished, and with it, everything they knew how to do. Those who remained in the occupation had only manufacturing experience, not management experience.
The fabric that allowed them to resist had to be something else. There were the neighbors, who helped and supported them from the very beginning. There were other cooperatives in a similar situation, who supported them throughout the occupation by bringing food. And there were the social organizations, who collaborated in times of mobilization to face down the threats of eviction, with the police present at the door every day.
“We started to think in reverse logic,” Pierucci recounts. “To see what was coming in, how many bags of flour, what production there was per day, what things constituted the cost. It’s like putting together a puzzle.”
One person was in charge of receiving the flour, so he knew how many bags usually came in. Another was in charge of being the operator, so he knew how many portions of tapitas and empanadas were made each day. The factory workers had to learn quickly to take on other responsibilities, to negotiate, to haggle over prices, and to take charge of the day-to-day administration of the company to maintain their jobs.
“We only had one week without production. There was some product in the chamber on the day of the closing. And it has a short expiration date. Thirty-odd days, if it doesn’t spoil. We were not going to throw it away, so we started to sell it. We started to recover clients, to explain the situation to them…” After just a few days, on November 6, in the middle of the occupation, production started up again.
As a next step, they asked the court to accelerate the bankruptcy, and they set up the cooperative, which was officially formed in January 2016. But, when the time came to decree the bankruptcy, the same court that had verbally shown itself favorable to the plan, when it was faced with the business plan proposed by the workers, denied them the operating permit, arguing that the occupation was illegal. Thus began a long legal process that continues to this day.
“The (last) ruling against us comes out in the middle of the pandemic, at the end of 2020, and we have to leave the factory. Again. And we appealed, again. I think we’re going to win the appeal again, but it’s like the never-ending story. We’ve been here for six years. Today we’re here legally, the factory is authorized as a cooperative. The occupation is, let’s say, a symbol. But we appealed an eviction decision, so we’re very unstable.”
The struggle against the closure of business and for the recovery of factories and other productive units tends to be associated with the crisis that began in 2001. However, in a less visible way, the process began at least a decade before that, in the midst of the deindustrialization process, and grew during the neoliberal decade, reaching a hundred businesses by the time of the social collapse. According to studies carried out by the Open Faculty program of the University of Buenos Aires (UBA), today, there are more than 400 recovered businesses in Argentina, with around 15,000 workers. The reality is that today, 20 years later, there are more recovered businesses than ever before.
According to Andrés Ruggeri, a social anthropologist and the coordinator of this program in the Faculty of Philosophy and Letters at the UBA since 2002, this indicates that, for workers in situations of bankruptcy, the tool of recovery “has a lot of influence and continues to be used. There are still recovered businesses now, and more than 50 out of the 400 recovered companies are from the last two or three years. And what this indicates is that when a factory or a business closes, it’s not necessarily going to become a recovered company, but the option of recovering it is present, it’s in the discussion.”
Several factors contribute to this. Past experiences have strengthened social support networks that today offer the new recovered businesses resources, advice, lawyers for the legal process, and experience with what will or might happen next. “With the help of the networks, each new experience avoids having to start everything from scratch, having to discover the process as if it never existed.”
At the same time, the relationship between this sector and the State is unavoidable. It is not the same thing to face a government that does not intervene, as it is to face one that opposes or supports. Today the situation is less confrontational than at other times, such as during the administration of Mauricio Macri. The National Institute of Associativism and Social Economy (INAES) was launched, and there are historical figures from the recovered businesses that hold positions in institutions that facilitate access to financing.
“But the fundamental issues, which are changes in legislation and structural changes in the way the State treats the recovered businesses, have not changed. There is still precarity, and issues around social security and labor rights remain untouched. Then there’s the fact that there is a worker who is different from the typical salaried worker, in a relationship of employment, in that they are neither an entrepreneur nor a self-employed worker. The recovered business is a different entity, a different type of organization. That type of worker, which is collective, is still not recognized.”
In 2011, the reform of the Bankruptcy Law gave priority to workers, on paper, to recover a company in bankruptcy proceedings if they were constituted as a cooperative. But the implementation in practice is far from complying with theory. In most cases, the formation of the cooperative is only the first step into a judicial labyrinth. The courts often rule against the workers, forcing them to appeal again and again, to live under constant threat of eviction, and granting, at most temporary, extensions.
Sometimes, as in the case of La Litoraleña, the previous owners leave large debts that the workers must assume and resolve. In their case, they were able to buy out the bankruptcy with the credits left over from lost wages and severance payments. But in the process, they even had to face an attempt to auction off the property where the facilities are, arbitrarily dictated by a court. The current legislation still has enough loopholes to be open to interpretation by a judiciary that operates under class logic and with a bosses’ vision. Whether or not the plans proposed by the workers are accepted depends on the judges.
This combination of factors creates a paradoxical situation for the recovered businesses. On the one hand, the dialogue with the State had led to the fact that the Ministry of Productive Development is about to implement the REDECO financing program, the first to be carried out with the specific purpose of supporting the recovered businesses formed as cooperatives. Up to 1.2 billion pesos will be invested in projects for the purchase of machinery and other operations. But, due to the lack of commitment to recognition of the self-managed model itself, it would not be impossible, once a certain contribution is received, for the courts to issue an eviction order the following day.
This lack of institutional recognition puts the recovered companies in a gray area of the economy. They must pay taxes, but they cannot access credit. They do not have to pay taxes, but have to take out accident insurance. They must pay social security contributions, but the pension they receive is minimal. On their way to legal recognition, they have to comply with all kinds of administrative requirements — obtaining operating and municipal permits, registering the factory, taking out insurance — but they tend to be largely invisible to the authorities until a crisis occurs.
This situation got worse during the pandemic and the mandatory preventive social isolation, which even led to the closure of iconic examples in the world of recovered business, as happened with the Hotel BAUEN. During the pandemic, the State implemented two tools to maintain jobs. The Assistance for Work and Production (ATP), which financed half of the salaries of workers in employer-run companies, and the Emergency Family Income (IFE), aimed at unregistered workers, self-employed workers, and members of the popular economy. But the workers of self-managed work cooperatives were neither one nor the other. Some of them managed to fall into the category of essential sectors to maintain their activities. The rest, until emergency patches arrived, could not benefit from either policy.
“And why were they left out? Because nobody saw them. (…) It was very symptomatic of the extent to which self-management is invisible in certain sectors of power, even ‘well-meaning’ ones. At most, they see them as a problem. ‘Well, what do we do with these guys?’ They may ask themselves that question. What they don’t stop and think is: ‘This is an alternative. This is a different economic form and it’s in our interest that it’s promoted.’ There’s no way that’s going to happen.”
At the root seems to lie the lack of political will. But even political will needs a social force to drive it. The large mobilizations at the beginning of the 2000s in support of the recovered businesses and what they represented at that time, which sometimes even achieved that expropriation laws being passed, today seem to have been left behind. “(In 2001) they were part of a great process of social mobilization, of questioning the political and economic system, and the recovered business were a sounding board for many things, much more than what they represented in economic numbers, in the number of people involved. But now they are reduced to what they are. They are not strong enough, for example, to bring about a vote in the National Congress for a law on self-managed work. It has become a movement that, even though it’s bigger than before, is weaker symbolically and politically, because now it has less capacity to have an impact on public policies.”
Twenty years ago, the phenomenon of recovered businesses came to be widely seen as the spearhead of a project that aspired to change society structurally, becoming a myth for anti-capitalist struggles within and beyond the nation’s borders. For those in power, even those with a more or less benign view, they have been interpreted at most as an emergency and containment formula for vulnerable sectors. But two decades after that moment, to continue understanding self-management as an island at the margin of the society in which it transits does a disservice to the real possibilities of development of this alternative model and its workers.
What supports and allows for the maintenance of a self-managed business continues to be its capacity to safeguard jobs, to produce, and thus ensure income for its workers. A small business may be able to maintain itself in a parallel solidarity market, but there is no way a metal factory can ensure dozens or hundreds of decent wages with its back to the world, and even less so faced with systemic crises. A critical evaluation of these experiences is required if we want to reassemble a project from below that can dispute the economic model, the management of labor, and the distribution of wealth.
There is no doubt that the examples of self-management are forced to row against a strong current. But nowadays, instability seems to be the daily bread of workers in any field. Numerous recovered businesses have so far survived changes in government, inflationary increases, tariff hikes, and even a pandemic. And they have done so under the direction of their own workers, skipping over intermediaries, maintaining an internal operation that is different from capitalist logic, betting on a more democratic and horizontal model, and lending help and resources to each other. All this, while navigating in the midst of an aggressive market that has very little solidarity.
For Andrés Ruggeri, the concrete advantages of the recovered companies remain, and surely explain why this model continues to grow: “Many of them have managed to rebuild those jobs and their economic activity, and the most important thing is not that they have achieved it, but how they did it. The issue of self-management, in many cases, is more qualitative than quantitative. It is a job with less exploitation. It also implies gaining better working conditions, more freedom, more solidarity, although it may seem an overly repeated word, but it is real, and in that sense, qualitatively, it allows other answers. A self-managed company can allow itself to think about things that the capitalist company is not interested in, things that have to do not only with the welfare of its workers, but also with the general social welfare. For example, to consider that a certain product is not good for the environment and to look for a solution. The capitalist company is going to do the numbers and say: ‘If a more environmentally friendly product gives us more profit, we go that way. But if we lose money, we’re not interested, let them go under.
We are experiencing an onslaught of renewed forms of exploitation under the guise of new technologies, or camouflaged under the slogan of “personal entrepreneurship,” which only encourage disintegration, individualism, and competitiveness among workers in a context of growing precariousness. But, the recovered businesses open the door to reweave ties between workers at a time when they seem to have been lost.
In the Cooperativa de Trabajo La Litoraleña, the assembly was established from the beginning as the decision-making body. They have a board of directors determined by the Cooperatives Law, which, in this case, corresponds to the operational management of the factory. Its meetings answer to an expanded planning body: the heads of each of the sectors of the organization chart participate, and any factory worker can attend. All positions rotate, from the members of the board to the heads of each sector. From the first to the last member of the factory, they receive the same salary, regardless of their responsibilities; another decision that came from that first assembly that led to the occupation and the path of self-management.
“There is no surplus value here,” stresses Fabian Pierucci, who will soon complete his three years as president of the cooperative, giving way to a new board. “Because we all have the same income. There is no way there can be surplus value in this factory.”
In parallel, the cooperative maintains an “open door” policy. It tries to maintain a close link with the neighborhood, doing community work, supporting other cooperatives in resistance, and regularly receiving schools to share the experience with the children. To a lesser or greater extent, all the recovered businesses try to give something back to the community that supported them and feed the network that allowed them to build their project.
“These experiences should not be idealized. Nor should we undervalue them. But you have to be there every day,” he adds.
The work continues behind the walls of the tapas and empanadas factory in Chacarita. Dressed in their hairnets and white uniforms, the factory workers prepare the flour and margarine mixture, add the layers of puff pastry, roll it out, reduce the thickness, cut it. The raw material goes through its cycle through the machines, being transported from one belt to another by the workers before being wrapped, until the product is packaged, goes through the forklift, and the tapas enter cold storage, awaiting distribution.
“It’s tough in some ways, but it’s tough outside, as well. The thing about it is that the intensity of the work is consensual. Have you seen the movie “Modern Times,” by Chaplin? The strongman, every time he pushes the lever, the assembly line goes faster, and Chaplin goes crazy. He can’t complete his task. That doesn’t exist here. It doesn’t exist. We have our dining room, we meet, we take turns, we have down time. Nobody is going to bother anybody. That’s great.”