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Worker-Run Factories in Argentina Continue to Thrive, Boosting the Economy and Influencing Workers in Other Countries

"The state should strengthen these businesses because they are productive units that are growing sources of genuine jobs, which are neither precarious nor informal."

After the late 2001 financial and political meltdown in Argentina, thousands of companies were abandoned by their owners in a sea of debt. But some of them were taken over and reopened by their employees. Today, as the economy continues to grow, these worker-run factories are still going strong.

There are now 205 "recovered" companies, with a total of 9,362 workers -- up from 161 companies with 6,900 workers in 2004, according to a study published in October.

"How has a phenomenon that emerged as a kind of life raft after the 2001 economic collapse grown rather than faded away during a period of economic boom?" asks the lead author of the study, Andrés Ruggeri.

"The workers learned that running a company by themselves is a viable alternative, to keep a company operating," he tells IPS. "That was unthinkable before."

The study, "Las Empresas Recuperadas en la Argentina. 2010" ("Recovered Companies in Argentina 2010"), was carried out by a large team of student volunteers with the Open Faculty Programme at the University of Buenos Aires.

The aim was to provide data to help design policies to strengthen and improve the self-management of companies, says the study, which is based on an in-depth survey of the companies. Although there are some earlier precedents in Argentine history of bankrupt businesses that were reopened by their workers, they were isolated cases.

But as a result of the severe 2002-2003 economic crisis, worker-run companies began to mushroom in a broad range of areas, including the food industry, steel, textile, footwear and plastic factories, meat-packing plants, ceramic, glass and rubber manufacturers, graphic design companies, transport firms, restaurants, health businesses and even a five-star hotel.

The companies were reclaimed by their workers after the owners disappeared overnight, leaving behind jobless employees, piles of debt, factories stripped of everything not bolted down -- and, often, charges of tax evasion or fraud.

Many of the companies are producing and even exporting again after they were taken over by the workers, who were owed months and sometimes years of back wages.

Most of the workers formed cooperatives, and decisions are reached in assemblies, while they receive advice and support from other worker-owned companies and from government institutions as well.

A similar phenomenon has occurred in other countries of Latin America. According to the Open Faculty Programme report, there are 69 "recovered" companies in Brazil, around 30 in Uruguay, 20 in Paraguay and a growing number in Venezuela. Cases are also starting to be seen in Spain, says Ruggeri.

Many believed that as the economy boomed -- it grew an average of 8.5 percent a year from 2003 to 2008 -- the companies had gradually shrunk in number, and only a few survived as testimony to an era, the study says. But "nothing could be further from the truth," Ruggeri says.

Even during times of economic growth, numerous companies fall into bankruptcy, sometimes as part of a strategy aimed at enabling the owner to start over again elsewhere. But the employees are left high and dry, and many of them are no longer young enough to be reabsorbed by the labour market, he points out.

"Recovered companies are a labour, economic and social reality that has taken root; they are here to stay and they will continue growing," the study says. Although they face their own difficulties, they have enormous potential, it adds.

One illustrative case not related to the 2002-2003 crisis is that of Global, a firm that produced latex products -- mainly balloons -- that declared bankruptcy in 2004.

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