Collective Contract and Nationalization Finalized at Venezuela’s Steel Plant

Caracas, May 13, 2008 (venezuelanalysis.com) – Venezuelan President Hugo Chavez signed a collective contract with workers at the Sidor steel plant yesterday, formalizing an agreement reached between workers and the government last week. The agreement follows 16 months of contract disputes with the previous management, the Argentine controlled Ternium that had sparked repeated work stoppages and led Chavez to order the nationalization of the plant.

In addition to the collective contract, Chavez also signed a law formalizing the nationalization of Sidor, and appointed Rodolfo Sanz, minister of Basic Industries and Mining, as the company's president. The workers themselves would elect the company’s vice president Chavez said Monday in a televised address from Sidor.

Under the nationalization law, Ternium, which is still negotiating terms with the government, must completely hand over Sidor to Venezuela by June 30.

Chavez also announced the formation of a Transition Commission, headed by Labor Minister Roberto Hernández, which includes Minister for Light Industries William Contreras, as well as worker representatives to oversee the full nationalization of the company.

“We can’t fail. Sidor has to become a socialist company, and we have to do that ourselves, the government and the workers together,” he said.

The new collective agreement, which is retroactive from May 1, covers workers from 2008 to 2010 and establishes an initial daily increase of 33 Bs.F (US$15.35) and two additional raises of 10 Bs.F ($4.65) by 2009, equivalent to a 79.8% overall increase, raising the monthly salary to 2,231 Bs.F (US$ 1,037). The contract also grants workers a retroactive payment of 35,000 Bs.F (US$ 16,279), for outstanding benefits, overtime and sick leave that the company never paid.

During a speech to workers at the steel plant yesterday, Sanz announced that more than 1,000 contract workers will also be incorporated into the new agreement.

“The sentiment of the President of the Republic, Hugo Chavez Frias, is that in this company there will not be first class workers and second class workers – all the workers are equal because all provide their services,” Sanz sustained.

On this point he added, “There would be no sense in nationalizing the company if the pattern of labor and production remained the same as the transnational company,” which previously owned Sidor.

The minister also indicated that a “radical transformation” would be initiated within the company in contrast to “the merciless exploitation to which all the workers and contract workers were submitted” under the previous management.

Despite these intentions, a conflict has broken out over the question of the approximately 9,000 contract workers, who are demanding to be incorporated onto the payroll.

While some workers will be incorporated on the basis of “equal pay for equal work,” a further 8,000 workers who carry out service and maintenance positions, such as cleaners, machinists, drivers and canteen workers, among others, and are contracted under 250 different agreements, argue they should also be covered in the collective agreement.

On May 9, after initiating and 8 hour strike and shutting down sections of the plant, 400 contract workers occupied the office of the United Steel Industry Workers Union (SUTISS), which represents the 4,500 fixed workers, calling for the union take their demands into account.

SUTISS Press Secretary, Juan Valor, a member of Marcela Maspero’s union current, the Collective of Workers in Revolution (CTR), called on the union to support the struggle of the contract workers.

“Comrades of SUTISS, now is the time to show that the true leaders are with the workers and with social justice. We must look for mechanisms to integrate these comrades who work together with us.”

However, other members of the union have argued that the immediate incorporation of all the contract workers would be financially unviable and cause the company to collapse. Nerio Fuentes, SUTISS General Secretary, argued that Valor “is irresponsible for giving the contract workers false hopes.”

Chavez responded to the demands of the contract workers yesterday saying, “They can’t ask me to achieve in one day what has not been achieved in ten years.”

“The contract that was signed today is the best contract in the history of the steel plant,” he added and assured that the problem of the contract workers was high on his agenda, but argued the process of incorporating them all into the collective contract would take time.

Luis José García, who has worked for ten years as a contractor in the steel plant, said the contract workers were willing to flexibilize their position. “We can accept that only a certain number of contractors are included in the payroll, in order that later, in a short period of time, all workers connected to the plant pass over to the payroll,” said Garcia, adding, “This should be a signed agreement.”

Stalin Perez Borges, national coordinator of the National Union of Workers and member of the Marea Socialista union current, said the issue of what to do with the contract workers, “goes to the heart of the problem.” “On this issue there are many voices with different arguments, although all appear to agree that the situation is unjust,” he added.

“However,” he clarified, “the conflict has not been resolved and the comrades have not heard solutions to their demand. In this sense there should be no doubts, Marea Socialista is for the incorporation of all these comrades onto the payroll.”

Perez Borges added that the argument that it is financially unviable to incorporate the contract workers is “false.”

The existing cost of contracting out the work could pay in part for their incorporation onto the payroll he explained. The remaining cost should be subtracted from the compensation to be paid to Ternium given that the company is responsible for the casualization and contracting out of labor in the first place, he argued.

Although the issue has not been resolved, Valor told Venezuelanalysis.com that the collective agreement, which will establish a joint commission to assess the situation of all the contract workers and present a definitive number of those to be incorporated in 90 days, “is historic, because it opens the possibility, not immediately, but progressively, that we can have all workers included in the payroll of the company.”

Chavez also announced the creation of the Venezuelan Steel Corporation, “to organize the sector, from the mines to the factory” and assured that PDVSA, Venezuela’s state owned oil company, would sign an agreement with the company to invest in the production of tubes and steel for oil drilling platforms.

The company should also diversify production to produce electrical goods, car parts and other products, which would serve as a source of employment for thousands of workers he said.