Venezuelan Workers Struggle against Neo-Liberalism in Latin America’s Largest Steel Plant

As the conflict at Siderúrgica del Orinoco (Sidor) enters its third week and millions of dollars in losses for the plant, the strike has come to represent the current contradictions within the government in its relationship with labor.

Sidor workers rally at Portón 3

The conflict at Siderúrgica del Orinoco (Sidor)—Latin America’s largest steel company, affecting 4,500 direct employees and 7,000 contract workers—has entered its third week.  As the strike has developed, it has come to represent the current contradictions within the government’s relationship with labor.  As the workers call for nationalization, the Ministry of Labor has yet to take concrete measures to meet their demands.  Whatever happens at Sidor, the strike will have widespread implications for the Venezuelan labor movement as a whole and, in particular, with respect to the union’s relationship with the government of President Hugo Chávez Frías.

Ramón Machuca, the president of Sutiss, the steelworkers union, is running for Governor of the state of Bolívar on a chavista platform, even though he is not the official candidate of the 5th Republic Movement (Chavez’ party, MVR).  His main rival appears to be Francisco Rangel Gómez, the former director of the CVG (Corporación Venezolano de Guyana—the state corporation that owns a 40.3% stake in Sidor).  Thus, perhaps it is not surprising that allegations that this strike is politically motivated are circulating in both the Chavista and opposition camps.  Yet it would appear that these allegations themselves are politically motivated.

Víctor Moreno, the president of Fetrabolívar, which is the union federation of Bolivar state, recently suggested to the Venezuelan newspaper El Universal that the problem at Sidor is due to a conflict between Machuca and Chávez. He offered two explanations for the conflict: first, the stock-options that Sutiss workers are seeking should come from the government and not from the Amazonia Consortium, which owns 59.7% of the company. However, this claim directly contradicts statements made by Sutiss members, who say the share should come from the consortium.  Second, according to Moreno, Machuca has broken with Chávez because he was not appointed the official MVR candidate. However, a more likely explanation is that Machuca resents not being choosen by the unions that initially conformed the UNT to be its president. What is certain is that Moreno and Machuca are long-time rivals, and it is worth noting that in the past Fetrabolívar has joined with the CTV in actively opposing the Matancero union reform movement, who represent 70% of the Sutiss leadership including President Machuca and Secretary General José Rodriguez Acarigua.

Whether or not political considerations were involved, the strike has moved far beyond these.  Machuca, Acarigua, and the rank and file all maintain that bonuses owed workers must come from the Amazonia Consortium, and not the CVG.  But, the issue of bonuses has taken a backseat to safety concerns, and the trans-national’s political campaign against the union.

The Amazonia Consortium consists of the Argentine group Techint, which holds a 60.5 percent stake through its Tamsa unit in Mexico, and Siderar in Argentina, who have born the brunt of the workers’ animosity; Mexican steelmaker Hylsamex, 19.5 percent; Brazil’s Usiminas, 16.6 percent; and Venezuelan steelmaker Sivensa, 3.4 percent.

Precursors to the Strike

Nuevo Sindicalismo and the Matanceros

During the 1970s, 80s and 90s the Nuevo Sindicalismo movement (new unionism) gained rapid and near-total influence in the state of Bolívar.  The nuevo sindicalismo was represented at the party level by the newly-formed La Causa R, with a labor-leader at its head: Andres Velasquez, a former steelworker.  Nuevo sindicalismo and La Causa R had their roots in Sutiss as part of the broader Matancero movement, which laid the foundation for the current politicization of Sutiss workers.  Nuevo sindicalismo and La Causa R brought participatory democracy to Bolívar long before the MVR even existed, and until the 1990s conceived of itself “as neither bargaining agent nor political broker but a representative accountable between elections to workers who were expected to act in solidarity with one another.”[1]

However, by the 1990s La Causa R had assumed a role more or in keeping with other established parties, and nuevo sindicalismo was coopted, eventually cooperating with the CTV—its former nemesis.  The Matancero movement managed to avoid this fate, due to its deep-seated suspicion of political parties.  Today the Matancero movement remains a powerful force in Sutiss and remains unaffiliated with any political parties, though the movement supports el proceso (“the process,” as the Bolívarian revolution is commonly known).

2001 Strike

In May 2001 Sutiss went on strike for 21 days.  The CTV quickly declared their solidarity and began considering a general strike in support of the Sidor workers.  However, it soon became evident that, while Machuca’s concerns were generally ‘bread-and-butter’ issues, CTV heads Carlos Ortega and Alfredo Ramos had a political agenda.  The CTV sought to use the excuse of supporting Sutiss to call a general strike which they could turn into a political tool to attack Chávez.  Thus, recent declarations of support for the present Sutiss from CTV Executive-Secretary Pablo Castro must be viewed in this context.[2]

2002-2003 Oil-Strike

Sidor participated in the 2002-2003 oil industry shutdown, shutting down production completely even though it cost them dearly.  Particularly in light of the serious financial straights in which the company has found itself since privatization, their decision to participate signaled dedicated opposition to Chávez.  In support of the government, Sutiss workers reacted to the shutdown by occupying gas stations all over the state, and by creating a gas-caravan of private cars from Anzoátegui to keep gas flowing in Bolívar.

The Current Impasse           

Contradicting the claims of Sidor, which has begun a media-campaign characterizing the strike as a greedy attempt by well-fed steelworkers to increase wages, Sutiss has identified several key issues as justification for the strike, including: access to health services, health & safety, contract workers, transportation, the presence of the National Guard at Sidor, and bonuses.  But one larger problem has come to represent all of the others: Neoliberal management policies that have caused Sutiss to begin calling for re-nationalization.

Health services

As outlined in the collective bargaining agreement between Sutiss and Sidor, the company is responsible for providing health care for the workers. However, according to Sutiss Secretary-General José Rodriguez Acarigua, “the medical situation here is a disaster… Right now there is a big problem with the health system for the workers—we have two workers who died because they were denied access to the health system…and they died in the streets, in a public hospital…”[3]

Health & Safety

As a direct result of the now-familiar management technique of shifting the work-load from well-paid and well-trained unionized workers to contract-workers to cut costs, the number of accidents at Sidor have steadily increased.  The company is now operating with far fewer workers (around 13,000 as opposed to 24,000 in 1997) and production has been increased 39% since 1997. Contract workersare subjected to the riskiest, most exposed conditions in the factory, are not being provided with adequate health and safety training or with adequate safety equipment.  Furthermore, contract workersare often unfamiliar with the risks because they are not given time to acclimate to the conditions in specific areas.  They are posted in one location for a short period of time, then they are moved to another area of work, or they are “let go”.  The result is that there have been 9 deaths since privatization, 5 in the last 12 months; and all of those last 5 deaths were contract workers.

Sutiss Secretary General José Rodriguez Acarigua, said, “…9 workers have died at work since privatization in 1997. We have suggested improvements, investments in safety and nothing happened. This is a plant that is about production, production, and more production and at the end of the day there is no interest in safety whatsoever…”[4]

Another issue of concern is the increasing incidence of work-related illnesses and the company’s failure to provide regular medical exams as required in Article 70, on “Preventative Medical Services,” of the collective bargaining agreement.  Also there has any adequate information regarding work-related illnesses been collected, as is the employer’s responsibility according to Article 71, “Work-Related Illnesses.”[5] 

According to Victor Jiménez of Sutiss’ Industrial Health & Safety Committee,

“…there are abnormally high incidences of professionally-related health problems as a result of working in conditions of extreme heat, exposure to radiation, and to dangerous chemicals… records of these illnesses don’t exist! No one is sick at Sidor! …workers are not…getting health reports as is their right according to article 51 of the Medical Practice Law, that all workers…have the right to solicit the information and diagnoses of the real medical condition of this patient…..At the level of accidents where workers are disabled, where they lose a finger, or an arm, or break their foot, or are partially-paralyzed there is not a single type of statistical report on these accidents. [Based on the statistics] This is an ideal company![6]


Contract workers, who represented only about 45% of the workforce prior to privatization and 0% in 1979, now represent well over 60% of the workforce.  Since the 1980s, and since privatization in particular, unionized workers have been explicitly targeted for firings and replaced by contract workers.  These workersare paid minimum wage, which is less than a third of the wage of direct employees, with no benefits (though the collective bargaining agreement explicitly states that they are guaranteed a whole series of benefits[7]).  Their terms of employment are temporary and because the company can dismiss them without notice (or justification) contract workers are the most vulnerable workers at Sidor.  Thus, they are forced to accept the riskiest jobs, and to work in the worst conditions.[8]

According to assembly-line technician Ramon Arramello, “…there are young exploited workers here making Bs 200, 000 (US$100) monthly…Some of the most poorly paid workers here in Venezuela are steelworkers, because Sidor ignores all of their demands, the collective-agreement, their [health-care]…”[9]


According to Article 12 “Vacation Time and Transport,” of the Collective-Agreement, Sidor is obligated to provide free transportation to and from the plant to workers.  If the company does not provide free transportation, they must reimburse workers who pay for their own transportation.[10]  But, according to Sutiss, Sidor has failed to provide said transport, nor have they compensated workers for their transportation costs for the last 2 years.  The transport issue is particularly important given the history of cooperation between steel-workers at Sidor and the transport workers.  In 1976 the then young matancero movement organized the drivers of the buses the company contracted to transport workers.  It was a breakthrough for the expansion of Matancero into the communities around Sidor, and facilitated massive participation in strikes and work-stoppages at Sidor.  The current strike is considerably weakened by difficulties in bringing workers from distant neighborhoods to the plant.[11]

National Guard

The National Guard has been called in to Sidor, allegedly to protect the installation from worker-saboteurs. However, their role has also clearly been one of intimidation.  At 9am on April 29th the National Guard opened fire on striking workers with rubber bullets and tear-gas (the company that makes the rubber bullets used is GlobalShot.com—see photo).  According to Acarigua “Gen. Nieves of CORE 8 has converted the National Guard into strike breakers that are favoring the company and this cannot be.  This is not their function.  They can’t be partial to a transnational [over the workers at Sidor].”[12]


According to Sutiss, the bonuses must come from the transnational, and not from the government.  Article 8 of the collective bargaining agreement, on profit sharing, states that the company is required to distribute 15% of its annual profits to the workers (only the direct employees, since contract-workers are not covered).[13] The Amazonia Consortium (AC), which owns the privatized portion of Sidor, claims that it has already redistributed these profits, but Sutiss maintains that they have yet to receive them.  Yet spokespersons for AC have also said that the union’s disagreement regarding receiving these profits is with CVG, which would appear to contradict their claims that the union has already received these profits. Sutiss members at every level from Machuca to the rank & file have asserted and reasserted that the 20% of profits that they are owed must come from the transnational and not from the government.

José Rodriguez Acarigua: “We are also owed profits from the last 6 years…last year, in 2003 we quadrupled production, quadrupled, so there is no shortage of money…the company made 90 million dollars (US) in profits last year and we haven’t received a cent, not a cent (…)”[14]


Both the Sutiss leadership and the rank and file constantly refer to the Amazonia Consortium as the root of the problem: it is a problem with neoliberalism. As Sutiss President Ramón Machuca notes,

“The problem is with a method of neoliberal management that is being applied all over the world and systematically violating the worker’s rights…Mediation [by the government] is the only way I can see to resolve this conflict…Here there are two conflicting ideologies: the first is the ideology of globalization, of Neoliberal politics represented by the foreign management; the second is the social ideology of the union and of the workers, who are struggling every day for our rights…We are proposing re-nationalization because we believe it is a necessary measure and one that should be discussed nationally…”[15]

Yet Sidor began the transition to Neoliberal management while still state-run, and many of the problems that exist today can be traced to long before 1997.  The experience of the state oil company PDVSA prior to its restructuring in 2003 provides a clue to how SIDOR must have been managed during the 1980s and 1990s.  However, between 1961 (when the company was started) and 1998 (privatization) there was one strike, around 20 work-stoppages, compared to 2 strikes (one in 2001, and 2004), and 320 work-stoppages in the last 6 years.


The CTV and the UNT at Sidor

Both the anti-Chavez union federation CTV and the pro-Chavez union federation UNT have recently voiced their support for the struggle of the Sutiss workers against Sidor.  The support of the UNT can likely be taken at face-value since they are also supporting workers in Carabobo, Miranda, and Caracas who have taken-over factories that participated in the oil industry shutdown in 2002-2003. Orlando Chirino, one of seven UNT provisional coordinators, has personally voiced his support for Sutiss, noting that “…this strike is decisive for workers and we support the workers at Sidor in a spirit of solidarity in this context.”[16]

The CTV’s support on the other hand must necessarily be viewed with extreme suspicion. As with the 2001 Sutiss strike, they will likely seek to turn this to their advantage. As long as the Ministry of Labor has not taken a position firmly supporting Sutiss, the CTV and the opposition more generally will have an opportunity to turn this into a conflict between Machuca and Chávez, as Víctor Moreno from Fetrabolívar has already begun to do (see above).

The Role of the Ministry of Labor

Because of the importance of Sutiss in the Venezuelan labor movement, and of Sidor in the Latin American steel market, whatever happens here will have widespread implications.  The Sutiss workers have genuine grievances with Sidor and perhaps a legal premise for the strike.  It is also likely that their demands will not be met by the Amazonia Consortium, but can only be achieved through nationalization. It is extremely important that the government take a position as quickly as possible, and to do so will mean grappling with this issue.  On May 6 the Associated Press reported that the Ministry of Labor promised to give SUTISS a 30% share of the company—30% that would come from the CVG’s share of 40.3%.  This is exactly what Sutiss does not need, and it does not reflect their demands.  They have been repeatedly asserting that the 20% share they are requesting must come from the transnational, not from the government. With this offer, the government is allowing Sidor to walk away from the strike relatively unscathed (though having lost around US$35 million due to the strike itself).  Furthermore, by dealing exclusively with the issue of profit-sharing they leave health & safety concerns, transport, and problems regarding contract workers unsolved. It is doubtful that Sutiss will accept such a superficial ‘solution’ to the problems at Sidor, and even if they do, these issues will resurface and there will be another strike in a few months, or a year.

A far more productive step for the Ministry of Labor would be to support nationalization.  Clearly this is a radical approach and its actual application would, admittedly, be a departure from previous economic policy.  However, this is a revolution (right?).  Maybe it’s time that el proceso takes this step.  However, given the predictable reactions of the US government, and probably also of Argentina, Brazil, and Mexico (due to inevitable pressure from the Amazonia Consortium), this would be a risky decision.  However, it is one that is going to have to be made sooner or later, or else the government will undoubtedly loose the support of even the UNT.  Thus, it is worth planning for, even if it is not really on the agenda yet.


But what position can the government take short of supporting nationalization? This is the most important consideration in the short-term, since it is imperative that the government take a position clearly in support of the workers at Sidor, yet nationalization is probably not in the cards.  If they do not, they risk causing Sutiss to break permanently with el proceso.  As mentioned earlier, Sutiss will be a key ally for both the government and the UNT as labor policy and the new federation progress.  Thus, losing the support of Sutiss should not be considered an option.

Still, it should be possible for the government to take a position supporting the workers at Sidor without supporting nationalization in the short term.  Paying rhetorical homage to nationalization would not be abnormal, particularly since there are serious and well documented grievances that justify the Sutiss position.  Such a statement would increase the likelihood of Sidor accepting less drastic concessions. Machuca has stated in a personal interview that the role he seeks the government to play at this point is one of ‘mediation’. Were the government to publicly declare that they are extremely concerned with the working conditions at Sidor and thus the Ministry of Labor was sending a delegation to observe conditions and make recommendations to both Sidor and Sutiss, it would be met with strong support among Venezuelan workers generally, and would not be overly threatening to Sidor. The nationalization option could be postponed, and perhaps if Sidor’s financial does not improve, the CVG will have the option to increase its ownership through another debt-restructuring as they did in 2003, resulting in CVG’s ownership increasing from 30%-40%.

[1] Daniel Hellinger, “The Causa R and the Nuevo Sindicalismo in Venezuela,” Latin American Perspectives, Vol.23, No.3, Postbonanza Venezuela (Summer, 1996), p.120.

[2] Steve Ellner, “Tendencias Recientes en el Movimiento Laboral Venezolano: Autonmía vs Control Político,” Revista Venezolana de Economia y Ciencias Sociales, ¿Para dónde va Venezuela?, (Sept.-Dic., 2003), p.167.

[3] Personal interview at Sidor, 29-04-04.

[4] José Rodriguez Acarigua, personal interview at Sidor, 29-04-04.

[5] Convención Colectiva de Trabajo 2002-2004, SIDOR, SUTISS, pp.136-8.

[6] Personal interview at Sidor, 30-04-04.

[7] “Cláusula No 97: Contratistas,” Convención Colectiva de Trabajo 2002-2004, SIDOR, SUTISS, pp.178-81.

[8] Wilfred Rondón, Coordinator of Contract-Workers Committee, personal interview at Sidor, 30-04-04.

[9] Personal interview at Sidor, 30-04-04.

[10] Convención Colectiva de Trabajo 2002-2004, SIDOR, SUTISS, pp.34-6.

[11] Hellinger, 120.

[12] Barreiro C., “Sidor reinicia…”

[13] Colectiva de Trabajo 2002-2004, SIDOR, SUTISS, pp.28-30.

[14] Personal interview at Sidor, 29-04-04.

[15] President of SUTISS, personal interview at Sidor, 30-04-04.

[16] Orlando Chirino, Coordinator UNT, personal interview, 27-04-04.