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
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-
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
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
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
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
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

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

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