The Crisis in a Venezuelan Steel Mill: A Conversation with César Soto

Siderúrgicas del Orinoco-Sidor is a state-owned steelmaking complex in Bolívar state-Guayana. The corporation, which Hugo Chávez nationalized in 2008, is part of the larger Corporación Venezolana de Guayana [Venezuelan Corporation of Guayana, CVG], an industrial complex that includes a range of basic industries. In this interview, we talk to Sidor worker César Soto about the challenges the company faces and the conditions of its workers. In addition to having worked at Sidor for almost 30 years, Soto is a union organizer, the coordinator of the “Libertad Sindical 10” [Trade Union Liberty 10] current, and a member of the “Unidad en la coincidencia” [Unity in Coming Together] workers movement.

The 2008 nationalization of Sidor was the outcome of a great deal of workers’ pressure and mobilization. Tell us about the recent history of Sidor, focusing on the working class actions.

We struggle both to preserve our working conditions and to maintain Sidor’s productive mission. Sidor and the CVG enterprises are very important for the region’s development and the country in general. We fight for decent jobs, fair treatment, respect for labor rights, and to maintain production in a company that is of strategic importance for the nation. This struggle goes back to Sidor’s early days.

In 2007, workers raised their voices for these two reasons: Ternium Sidor – a corporation belonging to the multinational Techint group that had plants in Mexico, Brazil, Argentina, and Venezuela – treated workers poorly and had no commitment to the nation. It obeyed the interests of markets in other countries in deciding how to place its production. Instead of producing laminated steel or transformed products for export or national consumption, thus adding value to our production, we produced slabs and billets. The export of these semi-finished products had clear advantages for the corporation, but it hurt Venezuela.

Ternium Sidor was taking good quality iron ore processed with low-cost hydroelectric power and cheap skilled labor, but it was adding value elsewhere. The corporation also enjoyed other government incentives such as subsidized port services, which meant cheap access to the Atlantic Ocean.

When the mobilizations began in 2007, the spark was the unfair treatment and coercion we were experiencing. By the way, it resembles the situation we are facing today! The company had 8,000 subcontracted, precarious workers: Ternium had brought non-contract workers in while regular workers were being dismissed. This meant that the outsourced workers were being over-exploited, while dismissed ones had it even worse.

The working conditions of outsourced workers were terrible: instead of buses, “kennels” [trucks not fit for transporting humans] were provided for their transportation. They had no access to bathrooms, canteens, occupational medicine, personal protective equipment, and so on. Additionally, outsourced workers had to use another gate to enter the plant while working in the same spaces as the company’s regular workers. Workers who raised their voices in protest were immediately fired.

The situation, plus Ternium Sidor’s unwillingness to negotiate a new collective contract, triggered wide protests and mobilizations. Actions ranged from marches to eight-hour production halts, to production slow-downs. At the same time, workers went all over Guayana seeking solidarity and support.

What did the government do?

President Chávez tried to mediate with Techint’s representative in Venezuela, but he made little progress. In the meantime, the company increased the pressure on the workers and humiliated them further. That is when we decided that our struggle would be for the immediate nationalization of Sidor.

At the request of the Techint Group, Chávez visited the company in early 2008. However, when he got there, the workers’ situation and pressure we [the workers] were exerting led him to nationalize Sidor. This went along with a generous compensation for Ternium. The conflict lasted about a year and a half from its beginning to its solution.

Since the nationalization of Sidor, there has been a tug-of-war between workers’ control and bureaucratic management. In this process, bureaucratic management ended up winning out. Could you tell us how this played out?

Guayana’s basic industries have been laboratories for various management models, from capitalist management to bureaucratic state control and also co-management.

Carlos Lanz promoted co-management through the Factory Councils for Worker Control in ALCASA [state-owned aluminum enterprise]. The objective was to empower the working class through a co-management model. Unfortunately, this exercise did not flourish. Later came the Workers’ Productive Councils [2018], but they were really just theater since they were controlled from above and particular interests prevailed.

Then, in 2010, came the military management of the Guayana enterprises, and that is more or less the model that has lasted to date. What were the results for the workers? The militarization of work, gradual deterioration of salaries, and the elimination of medical care.

All this was accompanied by very poor management of production. In Sidor, we went from processing 4.3 million tons of liquid steel in 2007 to 17,000 in 2020. Likewise, the Complejo Industrial Siderúrgico [National Steel Complex, also state-owned] went from producing 646,000 tons of liquid steel in 2005 to 68,000 in 2020. If the industries were patients, they went from having a common cold to being in the ICU.

The upper management positions at Sidor and other basic industries in Guayana have been systematically filled by people that don’t have the knowledge or experience to run them. Over the years, they have turned their backs on the workers and have never developed a coherent production plan. Instead, they sought political alliances with particular interests. Sectarianism and cronyism prevailed instead of worker protagonism, which is what we believe in.

The company’s management procedures were neglected, from diagnosis and planning to control and evaluation. We are convinced that an inclusive management model is needed. Participation would boost workers’ commitment. In addition to bringing in knowledge and experience, workers are the creative force that promotes development!

Since approximately 2013, the conditions of Sidor workers have deteriorated greatly. There are many reasons for this. One is the general crisis that Venezuela is facing. A second one is the breakdown of the rentier-dependent capitalist development model. A third are the lethal US sanctions. Finally, there has been mismanagement. Given all these problems, what are the conditions of Sidor’s workers right now?

There are indeed a multiplicity of factors that brought us here. To what you mentioned we should add the struggles among different union tendencies. These are tensions that, in many cases, are kindled by the management.

The most concrete, recurrent problem on the plants is the lack of raw materials, supplies, spare parts, etc. While it is true that the sanctions have an impact, it is worth acknowledging that this problem arose well before. There has been a long process of divestment both in Sidor and in other state-owned industries in Guayana. To this, we must add clientelism and corruption.

What are the consequences? In 2019 Sidor and the National Steel Complex produced no steel. All this constitutes a devastating scenario for the workers’ morale. The morale of the workers was also hit by the de facto annihilation of our salaries: hyperinflation evaporated our purchasing power and the management did close to nothing to deal with this situation. Additionally, Memorandum 2792 [October 2018] had a big impact on our historically acquired rights: it took away the benefits granted by our collective bargaining agreement, eliminated our right to unionize, etc.

The pandemic was the nail that sealed the coffin. Eighty percent of the workers were given a “not required” status and sent home.

In this way, the “not required” workers have lost access to the company’s transportation, free meals, and health coverage, and everything indicates that we will be losing support for our kids’ schooling too.

In short, our salaries can be described as extreme-poverty wages and we have lost our rights as workers. In addition to this, when we protest, we face persecution and intimidation. In fact, the state’s security forces are now inside the plants, from the FAES [special action police forces] to the SEBIN [intelligence service], from the National Guard to the DGCIM [military counterintelligence]. They make their presence visible.

And what are the conditions of Sidor’s active workers, the so-called required ones?

The workers who remain on the plant, approximately 20 percent, receive the same salary as those of us who are “not required.” However, as the result of a mobilization of the required workers in the steel mills last year, and given that the company had negotiated a sale that was in production, management made some verbal concessions to both required and non-required workers.

Sidor’s President Néstor Astudillo committed to seeking a path to increase the wages of all workers, both required and not required, and providing bags of food to all. However, this didn’t come about. What is going on now is that required workers in certain areas are given a 30 dollar monthly bonus for “assistance,” while those that are directly involved with production in the mills receive an additional 30 dollar bonus. However, not all required workers receive bonuses. For instance, active maintenance personnel don’t receive them.

In other words, management is generating a sort of internal apartheid: a policy to create divisions and fractures among the workers.

All this happens in a context where domestic gasoline and cooking gas are scarce, power blackouts are frequent, and the water supply is not continuous at home.

We understand the impact of the sanctions. However, to a large extent, the problems that we face today were brewing long before. That is why we fight for better wages and working conditions, but we also struggle for reactivating production with worker participation.

There are rumors about a possible privatization of Sidor. Some say that the bosses’ indolence and the indirect layoffs that are going on are paving the way for privatization. Do you have any news on the subject?

We have lived through processes of privatization, nationalization, and occupation of plants abandoned by their owners. Today, in the nationalized companies, indolence could indeed be a breeding ground for another type of management.

There are many rumors about privatization. Yet in the case of Sidor we do not have any official information. However, the general tendency toward privatization and the rumors have us on the alert.

In recent months Sidor has had visits from Chinese, Russian, Indian, and Iranian technical teams, but we don’t know their purpose. Were reports or proposals made following the visits? As far as we know, these teams came and went without leaving any trace.

We, the workers, have been on the front line, watching the behavior of the bosses, the national government, and the state. The future of Sidor and of the state-owned basic industries concerns us.

However, the workers’ experience, our acquired knowledge, and our commitment to the enterprises and to Venezuela mean that we can actually contribute a lot to the recovery of the industry. A country facing a huge crisis and sanctions requires stabilization and economic growth. We, workers from all sectors, are called upon to be key players in the process. It’s all interrelated.

The oil and gas industries must be reactivated and this requires the recovery of electric infrastructure and the basic industries that produce the inputs needed to exploit oil. In the case of Guayana’s basic industries, they cannot be reactivated without the active participation of the workers and without a reliable supply of electricity.

The interlinking of the national productive apparatus requires the supply of electricity and fuel, but it also requires the supply of steel and aluminum. For this reason, basic industries such as Sidor are strategic.

Further, Sidor is not an island. Sidor is part of a productive chain in the iron and steel sector. After extraction, the process begins at Ferrominera [iron extraction and processing]. At Sidor the processes go from direct reduction through alteration and rolling. However, each process depends on inputs: it is all interlinked.

Sidor itself is a huge company with eighteen industrial plants for different processes. Today, the facilities have deteriorated due to divestment and lack of preventive and corrective maintenance. That is why in 2019 our production went down to zero.

There is another thing that hits Sidor hard. Workers have repeatedly denounced corruption and the de facto dismantling of the industry due to theft. The situation is so critical that the management is without resources and cannot get commercial credit of any kind. In fact, workers, particularly non-contract workers, are being paid in part by the Venezuelan state.

What solutions do you see to get out of this crisis?

To get out of this hole, Sidor needs electricity, gas, and financial resources. Given the level of deterioration, and much to our regret, this means seeking private financiers here or abroad.

However, we do not advocate privatization. We simply recognize that it is necessary to find the resources to reactivate Venezuela’s basic industries. We consider that this reactivation should happen with the workers who have knowledge, experience, and commitment to the enterprises and the country.

The only thing that has not failed in all these years is the creative potential of the workers. That is why we talk about a new kind of management in the enterprises.

The other option for Sidor and for the basic industries is, unfortunately, to undergo a process of “strategic association” or privatization. The basic industries have a great infrastructure and skilled workers, as well as privileged access to raw materials, which makes them an attractive option for investors.

We do not dream of privatization, but capital investment is necessary. If this were to happen, production might quickly be reactivated. With it, workers would likely recover living wages and rights.

Of course, if there is a privatization process, it must be clean and respect national interests above all else. We have already lived through capital’s de-territorialization of production and profit, and it must be avoided at all costs.

We do not want a Ternium-type scheme reimplanted in Venezuela. We struggled to get them out of Venezuela, and we succeeded. We do not want subcontracting schemes in Guayana, and we do not want companies to have carte blanche.

In recent months there have been worker protests in Sidor. What are your key demands?

We demand respect for our dignity and our rights. This includes the right to work.

We demand a living wage as laid out in article 91 of the Constitution: salaries that cover food, clothing, shelter, and the enjoyment of life, both for ourselves and for our families.

We demand the repeal of Memorandum 2792, the restoration of our collective bargaining rights, the re-legitimization of our unions, and the reinstatement of our right to freely organize. We also demand that the persecution and intimidation of workers who protest and denounce be immediately stopped.

Finally, we demand a collective approach to reactivating production to contribute to the country’s economy.

This struggle has taken us to the streets on numerous occasions in the past year. However, it must get bigger. An atomized struggle won’t work: workers of the basic industries, education, health, and transport workers, all must join together as brothers and sisters so that the government is forced to listen and rectify. We have listened to their explanations which are limited to saying that the current catastrophe is just due to the sanctions, but they haven’t listened to what we have to say. In fact, our experience gives us tools to propose solutions to the current crisis.

We are working toward uniting all Guayana workers with the hope of generating a space for sincere and honest debate. We want to recover not only our living conditions but also our country’s production!