Venezuelan Steel Company to be Nationalized in Wake of Labor Conflict

Mérida, April 9, 2008 (venezuelanalysis.com)– Early Wednesday morning, the Vice President of Venezuela, Ramón Carrizalez, announced the nationalization of Argentine-controlled Ternium Sidor, the largest steel company in the Andean region, concluding a 14-month collective contract dispute between the company and the United Steel Industry Workers Union (SUTISS).

The decision to nationalize was made by President Hugo Chávez and communicated by telephone at 1:30am to Carrizalez, who had been mediating negotiations since Monday in southeastern Bolívar state, where the company is based.

“After a long process of fruitless negotiations for a solution to the conflict between Sidor and its workers, President Chávez made the decision in the early morning to assume state control of [Sidor],” Carrizalez confirmed in a press conference in Caracas Wednesday.

The Vice President described Sidor’s refusal to budge on its final wage offer, which had been rejected in a worker-led referendum the week before, as “a grand arrogance” reflective of “a colonizer attitude” of a company that wished to continue its “barbarous exploitation” of its workers.

“This is a government that protects workers and will never take the side of a transnational company,” said Carrizalez, who assured that the decision would not affect Venezuela’s relations with Argentine President Cristina Fernández.

The president of Sidor’s Board of Directors, Maritza Izaguirre, said allegations of Sidor’s wrongdoing are “not true.” The company has been “submitted to constant supervision and auditing of its management by organisms of the state,” Izaquirre assured, and its conduct has been “bound to the strict compliance” with Venezuelan law.
 
Union members are “jubilant” and celebrating, SUTISS finance secretary José Meléndez announced Wednesday, calling the nationalization a step toward “the workers’ dream of the Socialism of the 21st century”.  

Since Chávez sent Carrizalez to renew negotiations with Sidor last Sunday, the workers were demanding a daily pay increase of 53 bolivars ($24.65) compared to the company’s offer of 44 bolivars ($20.50), and the doubling of retirement pensions which are currently half the minimum wage, Meléndez said in an interview with the Marea Socialista national union current Wednesday.

Also, union negotiators sought to include a portion of Sidor’s approximately 9,000 non-unionized contract workers, who are subject to “completely unsafe conditions… miserable salary, without health care or job security,” in the disputed collective contract, which currently involves 4,035 permanent employees, Meléndez explained.

Implying support for this demand, Chávez recounted Sunday the law he decreed on May 1st last year against the undercutting of unions by companies that increase their contract labor force.

In negotiations Tuesday, Sidor offered to bring on 600 contract workers, but refused to budge on wages and pensions. Meléndez said this “was truly a mockery that we could not accept.”

Shortly after the nationalization was announced, Paolo Rocca, the president and top shareholder of Techint, an Argentine conglomerate which owns 60% of Sidor, sent a letter to Chávez requesting a “constructive solution” to avoid nationalization. In the missive, Rocca offered a pay raise nearly equal to the workers` demand and agreed to increase pensions to minimum wage, but did not alter its position on contract labor, according to the Venezuelan daily El Nacional.

“I am as of now at your disposition for that which you stipulate,” Rocca wrote to the President, who had threatened to nationalize the company in 2007 but did not once the company agreed to prioritize supplying steel to the national market.

SUTISS General Secretary Nerio Fuentes said workers would be “flexible” during the transition from private to state control, but it is “vital” that working conditions improve and collective contract negotiations proceed quickly.

Fuentes assured that the workers are prepared to occupy and operate the steel plant at full capacity while the nationalization is negotiated, but will wait for the government to give the go-ahead.

It is possible that the government and Techint switch places as shareholders in Sidor, leaving the conglomerate with a 20% share, the government with 60%, and the workers with the 20% share they have now, Carrizalez told the press Wednesday. No official indemnity offer has been made.

Meléndez said the workers hope the company will be placed “under control of the workers and the People.”

The union leader expressed deep disappointment that before Chávez weighed in on the side of the union, the Venezuelan Labor Ministry “never tried to look for a solution favorable to the workers” in the face of the “abuses the transnational commits,” but instead “attack[ed] the workers and its union organizations,” referring to the violent repression of a March 14th worker strike after the ministry backed company proposals.

Stalin Pérez Borges, coordinator of the pro-Chávez National Workers Union (UNT), said the ministry had been “mistaken to forget that we are the brave People of April 13, we have dignity,” referring to the day masses of Venezuelans took to the streets to return Chávez to power after a two-day coup in 2002.

Pérez compared the Sidor struggle to the dispute between ExxonMobil and the Venezuelan state oil company PDVSA over compensation for nationalized oil fields earlier this year. He declared that in the face of any “dirty trick” or “international campaign” against Chávez’s decision to nationalize, “we will stand by the majority of workers and the People to the end.”

“We can and must confide in the strength of the workers and that this revolutionary process can go far beyond where we are today,” Pérez concluded.