BRAZIL Workers Have a Better Idea

September 25, 2007

When I arrived at the Ford plant with union president "Vicentinho," several thousand workers were gath- ered at the factory gates. We made our way through the crowd and headed toward the office of the workers' com- mission, two cramped rooms littered with the tiny plastic cups Brazilians use Scott B. Martin is a doctoral stu- dent at Columbia University research- ing the new union movments in Brazil and Mexico. He recently returnedfrom Sdo Paulo. to drink their strong, black cafezinho. Forty or so plant activists were milling about, tension and exhaustion etched on their faces. It was July 25, the 45th day of the strike at the Ford auto plant in the Sao Paulo industrial suburb of Slo Bernardo do Campo. A few hours earlier, riot police had been called in to disperse angry workers who, for the second time in five days, had taken to smashing rows of parked cars. The events at Ford were the most dramatic scenes of the labor unrest that gripped Brazil from June to August, in NACLA REPORT ON THE AMERICAS C qresponse to the economic austerity policies of President Fernando Collor, who took office on March 15. Unions of the Unified Workers Central (CUT), tied to the Workers Party (PT), led a wave of strikes involving several mil- lion throughout the country. At Ford and other companies, workers pressed for cost-of-living raises. In a round of strikes at state enterprises, employees fought for both wage increases and an end to government efforts to restructure the firms and reduce their labor force, viewed as a prelude to eventual privati- zation. Collor Plan Meets Resistance The catalyst for the wave of strikes was the "wage squeeze" intended to be a cornerstone of the Collor govern- ment's plan to contain inflation and pave the way for an accord on the nation's $110 billion debt. Battered by the country's 1,765% inflation rate in 1989 and 80% monthly rate by March 1990, many poor Brazilians greeted the blitzkrieg March 15 Collor Plan with enthusiasm. Savings deposits above $1,200 and speculative money-market deposits were frozen, and, during the first month of the plan, a handful of prominent businessmen who violated price controls were jailed. But the price tag for reduced inflation was recession and strict wage austerity. Although the new government re- injected considerable liquidity into the economy in April and May, the reces- sion hit hard. From April to June, Bra- zil's GNP fell by 6.04% compared to the first quarter of the year and 8.8% compared to 1989. By year's end, a three to four percent economic contrac- tion is expected. During the first six months of 1990, 171,000 industrial workers lost their jobs in SIo Paulo state, a region which produces roughly half the country's GNP. With salaries frozen and prices realigned upward, real wage losses reached an estimated 60% for March and April. To avoid the legal requirement for wage indexing, in mid-April the government declared "zero inflation" and a month later is- sued a decree making wage hikes sub- ject only to collective bargaining be- tween labor and management. In May, the labor movement re- acted. At the forefront was the Slo Ber- nardo metalworkers union, where Luis Inlcio da Silva ("Lula") had led the "new unionism" movement that founded the PT in 1980 and the CUT in 1983. When the government announced plans to lay off 360,000 state employ- ees, the CUT called a general strike for June 12, although backtracking by rival labor leaders caused its cancellation. At the same time, Labor Minister Antonio Rogdrio Magri, a former conservative unionist, backed tripartite "social truce" negotiations among government, labor and business leaders. Govern- ment representatives demanded from labor a pledge not to strike or send disputes to labor courts during the negotiating period. Discussions broke down after the first session, however, when the government refused to meet the CUT's countercondition: a halt to dismissals of state workers. Without the CUT, which groups 1,400 unions and about 18 million workers, a na- tional accord was untenable. During June, over a million and a half workers from all over Brazil walked off the job in mostly sectoral or firm- level disputes. Besides the Ford con- flict, there were strikes by oil and port workers in June, and month-long strikes ending in August by 22,000 Volta Redonda steel employees and 75,000 government electric workers in twelve states. These movements brought the total number of strike days back to the monthly levels of 1989, the country's most strike-prone year since 1964. "Ford" was changed to "Fome" (hunger), and the company logo became the symbol of the strike VOLUME XXIV, NUMBER 3 (NOVEMBER 1990) In what one Ford activist called an effort to "create a pole of resistance" against Collor's wage austerity, the Sio Bemardo metalworkers' union led some 19,000 workers out on strike June 11 at sixteen of the city's largest plants. The union called for an 84% salary increase instead of the I I % adjustment proposed by the employers' umbrella organiza- tion, the Sdo Paulo State Industrial Federation (FIESP). At Ford and Mer- cedes-Benz, the unions adopted the novel strike tactic of leading out only workers in strategic sectors, while the majority continued to clock in and re- ceive their wages. The objective was to disrupt production without wearing out the workers or the union. It also enabled non-strikers to help support the 900 strikers and their families through soli- darity donations. Eight days into the strike and with production completely halted at the Ford plant in Slo Bernardo, Autolatina (the holding company that jointly admini- sters Ford and Volkswagen operations in Brazil and Argentina) dismissed 100 Ford strikers. Workers responded with a ten-hour peaceful occupation of plant installations. Two days later, Autolatina dismissed ten more organizers. On June 29, union rank and file approved a general settlement negoti- ated between FIESP and the CUT's national metalworkers' department, by which autoworkers would receive a 59% raise and other metalworkers 51%. But while the accord drew most strikers E a 9back to the assembly line, the Ford workers stayed out, demanding the suspension of all dismissals. As negotiations between the com- pany and the union continued, Auto- latina periodically threatened to fire more workers and began openly to seek replacements. By the 45th day of the strike, the company had reportedly lost $150 million and failed to produce 21,000 vehicles. A few days earlier, management had decided to deduct strike days from the bi-weekly pay- checks of the 6,500 non-striking work- ers pending the strikers' return to work. The attempt to pit non-strikers against strikers backfired, however, as the for- mer vented their anger in three quebra- quebras, or spontaneous rioting and vandalism against managers' offices and cars. A victory for worker solidarity? Perhaps, but news photos of overturned and burning cars rapidly began to turn public opinion against the strike. With negotiations flagging and the strikers politically isolated, the union leader- ship tried to convince the unruly strik- ers to return to work. Finally, on the 50th day of the strike, after Autolatina had offered to extend a 15% raise (above and beyond what the union had already won) to all of its Brazilian workers, the Ford strikers agreed to call it quits. A Mixed Tally The final balance sheet of the Ford strike was a mixed one. The seven- week struggle netted workers less than half the union's original demand of a 166% wage hike. The future of the "strategic strike" also seemed in doubt, since the regional labor court twice refused the union's request for an in- junction to force management to pay non-strikers. In a more positive vein, the Ford strike set off a round of wage adjust- ments in the metal-working sector and led Autolatina to grant a three-step raise of 46% to all of its Brazilian workers. Moreover, in the final accord Ford workers gained the re-admission of eight of the ten dismissed leaders as well as 80 fired companheiros. The strike also expanded the network of plant-level activists. Finally, neither Ford workers nor management will soon forget that 900 strikers shut down one of Brazil's Lula addresses the strikers: His Workers Party has yet to capitalize on discontent with government economic policy largest auto plants for 50 days, the long- est single-company strike ever in Sdo Bemardo, the cradle of militant Brazil- ian trade unionism. For the labor movement in general, the results were also mixed. Partly as a result of the spate of strikes in state companies, Collor failed to reach even 20% of his goal of 360,000 public sec- tor lay-offs by June 15. His June decree limiting wage increases to two per year has been effectively shelved, at least for the private sector. In August Collor also decreed a one-time bonus of 3,000 cruzeiros, or about $37.50, to all work- ers earning up to five times the mini- mum wage of approximately $75 per month. At the same time, however, recent labor activity has been primarily defen- sive and reactive. While Lula was cor- rect in calling the Ford strike "the great- est symbol of resistance to the Collor Plan," the CUT has yet to translate such symbols into larger and explicitly political actions. Though tarnished, Collor's popularity remains remarka- bly high, particularly since inflation rates have been stabilized since June at around I 11%. While some sectors are unhappy with the government-wheth- er for cutting real wages, provoking un- employment, confiscating middle-class savings, initiating the privatization of 13 state-owned firms, or liberalizing import restrictions-no alternative pro- gram seems at hand. The center-left op- position bloc that some observers an- ticipated has materialized only spo- radically; one of the few displays of in- dependence by Congress, a bill passed by both houses in July to re-index wages, sputtered out in late August as the Senate narrowly upheld Collor's veto. The PT has been slow to regroup after the surprise and disappointment of almost winning the presidency last December. Lula's decision in April not to run again for Congress, in order to devote himself to day-to-day party building, provoked internal debate and no doubt contributed to the party'spoor showing in the October legislative and gubernatorial elections. Moreover, the PT has thus far failed to turn either the numerous large-city governments it controls, including So Paulo, or its new "parallel government" (a shadow cabinet to critique government policy) into an effective platform. The Ford strike and Brazil's winter of labor discontent show that unions are one of the most effective nuclei for opposition to the Collor Plan. The ter- rain may be shifting, though, as in early September the government called for a new round of tripartite talks. Despite some initial infighting, the CUT voted by a narrow margin to participate in the discussions. The question that now arises is whether the pitched battles that are likely to be ahead will take place mostly at the negotiating table or on the streets.

Tags: Brazil, auto union, Ford, strike, austerity

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