Venezuelan Government Pays Worker Benefits in Ailing Aluminum Industry

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.
Basic Industries and Mining Minister Rodolfo Sanz (left) and President Hugo Chavez (Prensa Presidencial)

Mérida, July 18th 2009 ( — 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
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 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 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.