Buenos Aires, ARGENTINA, Monday, Feb. 24, 2003 --CropChoice news: If
it's sweet, Ghelco S.A. makes it: ice cream, fudge, chocolate,
pastries, about 1,800 sticky, sugary products in all. When
the bottom fell out of the Argentine economy in 2001, the
owners of the once flourishing manufacturer of sweets could
no longer make a go of it, finally shutting the plant and
filing for bankruptcy.
That's when the employees on the factory floor -- 42 men
and one woman -- took a bold step. They refused to stop working,
physically blocked the company's creditors from seizing Ghelco's
machinery and continued to show up every weekday, baking,
churning, whipping and selling the stuff that made the company
name a synonym for sinful indulgence.
In September, the legislature of Buenos Aires province confiscated
the Ghelco factory, and in a step heralded as the first of
its kind, gave the operation to the workers in receivership
so they could run it as a cooperative. The workers formed
a management team, responsible for all aspects of the factory
The precedent at Ghelco, more of a desperate than hostile
takeover, was the beginning of a trend.
Across the country, workers and their families have set up
cooperatives at about 100 shuttered factories and shops, keeping
the businesses operating and saving more than 10,000 jobs,
according to Luis Alberto Caro, a labor lawyer who represents
many of the employee cooperatives.
This factory, located in an aging industrial sector on the
southern outskirts of the capital, is now operating 12 hours
a day, at 50 percent of capacity. Workers say they hope to
be running at close to 100 percent by year's end. Taking advantage
of a trimmed management payroll, the workers have increased
their own monthly wages from about $160 to $265 and lowered
the prices of their goods. Part of the improvement comes from
subsidies, but the workers say that revenue and productivity
have increased even when state support is taken into account.
In a recent survey, retailers said the quality of Ghelco products
"These are difficult times," said Miguel Robles,
a factory employee and secretary of the workers' team that
now forms Ghelco's management. "We started doing this
because we knew no one else would. The government wasn't going
to help us. The unions couldn't help us and the banks wouldn't
help us, so it was up to us. There are no jobs and people
are learning they have to make their own way."
Worker-controlled business ventures such as Ghelco are just
one example of the spirit of self-help that runs through Argentine
society. When federal and provincial governments began slashing
their health budgets, groups of unemployed citizens opened
makeshift medical clinics or recruited volunteer doctors,
dentists and nurses to visit the sick, the pregnant and the
elderly at home.
When their children didn't have enough food and the government
began to slash pensions, people opened soup kitchens, collected
donated clothes and started communal farms. When credit dried
up, people banded together to lend money to aspiring entrepreneurs
or homeowners who needed a new roof.
When government officials began cutting funds for public
education, teachers set up computer, literacy and math courses
under jacaranda trees and inside roofless, abandoned warehouses.
When foreign imports began to crush local industries, enterprising
people created new ventures. Thousands of scavengers known
as cartoneros sift through trash on street corners every night
looking for salvageable cardboard. Only a decade ago, Argentina
imported nearly $100 million annually in paper products from
neighboring Brazil. The country now exports recycled paper
"What we are seeing in Argentina is this tremendous
new shift in responsibilities from public institutions to
private citizens," said Victor Abramovich, executive
director of the Center for Legal and Social Studies in Buenos
Aires. "Government is smaller. The economy is smaller
and that's created this vacuum which is being filled by this
expanded pool of very poor people who are isolated from their
politicians, estranged from labor unions.
"They have only each other to fend for their interests.
Argentina has never had so many people fall outside the traditional
spheres of what we consider public space and so they're recreating
their own version of public space," Abramovich said.
Argentina's economic collapse was a product of the 1990s,
when the government of then-President Carlos Menem established
policies that brought a temporary economic boom. Menem's economic
team pegged the value of the Argentine peso to the dollar,
sold off state-owned industries and opened the domestic market
to foreign trade. In the short term, the measures brought
down triple-digit inflation and won praise from the World
Bank and International Monetary Fund. For a time, Argentina
was cited as a model for free-market reforms.
However, Menem's government borrowed heavily, and the peso's
parity with the dollar made Argentine exports less competitive
abroad and crippled domestic industries. Shortly after Menem
left office in 1999, Argentina suffered a broad recession
and in December 2001 defaulted on its private foreign debt.
The value of the peso plummeted 70 percent against the dollar.
Menem, who is now seeking reelection, was accused of corruption
and cronyism that exacerbated the economic collapse. Ten senior
government officials were implicated in corruption scandals;
Menem himself was jailed briefly last year on arms-trafficking
charges but eventually was cleared of wrongdoing.
One consequence of the economic breakdown has been an unprecedented
surge in unemployment in Argentina's cities, leaving nearly
a quarter of the workforce jobless and more than half of Argentina's
37 million people -- about 20 million -- so vexingly poor
they are unable to buy the most basic basket of staple food
The unemployed have little faith in Argentina's public institutions.
The frequency of demonstrations against the government has
increased. It is common to see jobless workers and their families
blocking major thoroughfares to demand jobs or an increase
in the government's monthly $45 subsidy to the poor.
"This has really changed everything," said Daniel
Funes Rioja, a labor lawyer here who represents major corporations.
"The unions don't control the street anymore; the unemployed
The most outspoken and organized self-help populist organization
is the Movement of Unemployed Workers, known by its Spanish
initials, MTD. It pools the $45 monthly subsidies of members
to buy food, medicine and tools. The organization has created
communes across the country to feed, clothe and house its
"We needed to find a way to survive," said Andres
Fernandez, who heads an MTD camp in the potholed, dirt-poor
Buenos Aires suburb of Solano. "We had needs that were
going unmet and our situation was worsening. We had to do
In Solano, they built a wood and concrete community bakery
and soup kitchen that guarantees its members at least one
meal per day. The pharmacy provides painkillers, bandages
and basic medicines. With credit dried up, the group has provided
start-up loans for small businesses whose owners get nothing
but cold stares in Argentina's banks.
"The government doesn't even give our hospitals enough
basic supplies like gauze," Fernandez said.
The MTD site in Solano was buzzing one recent morning as
cooks began to prepare bread and vegetable empanadas -- there
is rarely enough money for meat -- while donated clothes were
unbundled on folding tables for distribution.
Ariel Gonzalez, one of the men who heads the cooperative
farm, was inspecting tomatoes, zucchini, peppers and chickens
just as a heavy downpour began.
"We're not farmers," he said. "Most of us
don't know a lot about seeds or insects or fertilizer. But
we decided that if we want to eat, we need to do this and
we gathered up our members who know something about farming
to teach the ones who don't."
Inside a crumbling, roofless, abandoned automobile factory,
the MTD is preparing to install computers for a technology
job-training course. Once a week, volunteer doctors visit
to treat members who are unable to travel to a distant government
health clinic. In a rural province north of here, the MTD
has built schools for children whose nearest public school
may be four miles away.
But it is the takeover of bankrupt businesses that has gone
furthest in legitimizing self-help for Argentina's jobless
poor. Using a little-used public indemnity law that allows
the government to seize homes for state construction projects,
Caro and other lawyers successfully argued that worker takeovers
of shuttered plants were in the public interest.
Argentine courts agreed, and the law has become a powerful
weapon in relieving Argentina's poverty. There are still problems,
according to Caro, who said that with credit so tight, many
workers have to negotiate ways to buy equipment or supplies
to keep the factories running.
The workers at Ghelco are gradually finding ways around that
problem. With so little capital, the plant requires customers
to supply the raw materials for their orders or pay for them
up front. But they deliver the final product at prices much
lower than before the bankruptcy, even when the retailers'
contribution is accounted for.
The factory also is benefiting from dropping 29 higher-paid
managers from the payroll. Lately, orders have begun to pick
up. The company was operating at 60 percent capacity when
the owners filed for bankruptcy; Caro said he hopes Ghelco
will surpass that by mid-year.
"Right at the beginning there was no one there for the
average Argentine on the street," said Norbert Monzon,
president of the Ghelco workers' cooperative. "We're
doing what we've always done, what we know we can do as well
as anyone. And now we're doing it knowing that if we don't,
there won't be a job, there won't be a paycheck."
After it became clear that the workers were turning the factory
around, labor unions began to call, asking how they could
help, Monzon said. The government has formed an agency to
assist workers in reopening closed plants.
And the owners?
"They called us a few months ago," Monzon said.
"They asked us if they could buy the plant back from