Brazil: A reply to Lula from the workers of the occupied Flaskô factory

Flaskô is the last surviving factory of the Occupied Factories Movement of Brazil, after the heavy police intervention put an end to the almost five-year occupation at Cipla and Interfibra. The workforce has been demanding that the Lula government nationalises the plant, but with no serious reply. But recently Lula took up the question in the press. Here is the reply of the Flaskô workers.

Editor’ Note:

Brazil witnessed a wave of factory occupations in recent years that produced the Movement of Occupied Factories, a glorious chapter in the history of the Brazilian workers’ movement. For several years factories such as Cipla, Interfibra and Flaskô were run under workers’ control and management. They proved that workers are perfectly capable of running industry without the need for bosses.

The workers elected factory councils to run the plants and also co-ordinated among themselves. They also linked up internationally with occupied factories in countries like Argentina, Paraguay and Venezuela. This gave us a glimpse of what an international socialist economy could be like.

However, individual factories run by workers within a capitalist economy face enormous difficulties. They can only really be the springboard towards a generalised struggle for the nationalisation of all the major industries. The leaders of the movement, who belonged to the Esquerda Marxista tendency within the PT, have always insisted that the solution to the problems of these factories is nationalisation under workers’ control and management. They have consistently and systematically campaigned for this demand to be implemented by the Lula government.

However, Lula has always refused to take up such a demand. In the case of Cipla and Interfibra he did not lift a finger to help. Instead heavy armed police interventions put an end to the occupations, and the leaders are still facing numerous criminal charges.

The workers of Flaskô are holding out in extremely difficult conditions. It is clear that the bosses and the government are attempting to strangle the factory and see the end of workers’ management.

After years of pleading with the government, and getting no serious reply, Lula suddenly took up the issue, answering the question of a young student in the pages of Brazil’s newspapers. He claims that nationalisation of Flaskô would mean socialising losses. Pedro Santinho, the Coordinator of the Factory Council of Flaskô, answers fully all the point raised by Lula and lays stress on the fact that his government had no qualms about using massive amount of public money to save banks and other private firms in difficulty. When it comes to saving the bosses, losses can be socialised, but when it comes to saving workers’ jobs they cannot! (Fred Weston)

On January 12, 2010 President Luis Inacio Lula da Silva replied publicly in his weekly column "The President replies”, to a question from a journalism student (Camila Delmondes Dias) on the struggle of the workers at the occupied factory of Flaskô.

Faced with the response given (which can be read here) we believe it is extremely important that the workers' committee running Flaskô under workers’ control should reply to Lula and the points raised by him before the entire working class. First of all, it is worth noting that since 12 June 2003 when we occupied the factory and resumed production to protect our jobs, we have been waiting for a response from the President. During these almost seven years we have never stopped fighting to keep Flaskô open under workers’ control and have always demanded of the federal government the following:

1. We have organised seven convoys to Brasilia to call on the president to defend the right to work of the workers of Flaskô, but so far we have received no response.

2. We have visited several times in recent years, especially in 2009, the Ministry of Labour (with the previous Minister Lupi), the Ministry of Social Security, the Ministry of Finance, the BNDES [Brazilian Development Bank], the Civil Cabinet, the Ministry of Institutional Relations, the Attorney to the National Treasury, the Chairman of the INSS [National Institute for Social Security], the National Secretariat for Solidarity Economy (SENAES), but the requests of the workers were not met.

3. In 2009, we conducted a hearing in the House of Deputies in Brasilia, in which Paul Singer (President of SENAES), representing the federal government and with the presence of several MPs and more than 200 workers, said he did not know what to do about Flaskô, but that the government was committed to the struggle of workers for jobs.

4. Each time we went to Brasilia, in each of the scheduled meetings, we formally filed requests for help, clarifications, explanations, proposals, etc. But so far nothing has been done.

5. With the testimony of a delegation of 100 workers on November 10, 2009 we filed, again, a letter requesting a meeting with President Lula to seek a solution for Flaskô.

6. We tried to get a meeting with the Presidency, and although more than seven thousand postcards, with a written request from workers all over Brazil for a meeting to be arranged, had been sent by the end of 2009, again there was no answer. We were informed that the responsibility for this question was of the Ministry of Labour and that we should approach this body. That is, the most that the federal government was prepared to do was to pass the buck to the Ministry of Labour (and we did approach said Ministry, together with the support of the CUT, Central Workers Union Confederation). This bureaucratic response given on November 22, by fax, demonstrates that our letter was not even read, as we had already said a week earlier that we had met with the Ministry of Labour and SENAES (and furthermore we had met one of their representatives at the Flaskô plant, as well as at the hearing mentioned above), and they had said they did not know what to do, but that they agreed to set in motion some procedures. Finally, they promised to go back to "square one" with this "playing to and fro”, leaving the workers with no firm commitment.

7. Thus, one can see that we had not received any official response from the President, until we had the surprise public response in his weekly column ("The President Responds"), and which is published in more than 175 newspapers throughout the country, as well as on the government’s own Planalto do Governo website.

Production line at Flaskô Thus, the words of the President about the Flaskô workers, which had been widely publicized, were brought to our attention, but not in the form and content that we had asked. Let us look at what is being said.

The student Camila asked the President a straight question of whether it is possible that the nationalisation of factories can save jobs. She says:

“There are many workers who are struggling for the nationalization of factories that have gone bankrupt. This applies to the workers of Flaskô, in Sumaré/SP. Is such a victory possible in our country?”

First it is necessary to give some historical and factual details to start this discussion.

We occupied Flaskô on June 12, 2003, after a meeting with the workers of Cipla and Interfibra who had occupied these factories in October 2002 in Joinville, and having returned from Brasilia after meeting the day before with the President himself. The aim of the factory occupation and the meeting was to save our jobs, since three months earlier the factory had been abandoned by the owners, who had left the factory inoperational and after more than four years with the workers receiving no entitlements such as wages, retirement fund and Social Security. The meeting ended with the President's commitment to finding a solution that would save all the jobs in the occupied factories. The President said that nationalisation was not "on the menu”, but that a committee of the Ministry would be set up to review the situation and find a way out.

We organized and kept up production while awaiting the response of our President. Again and again we only received written acknowledgements. We organised convoys to Brasilia to find a solution, and further to that we launched an important initiative that led us to the conclusion that we had to defend all jobs, rights and industrial plants that were still under attack. Hopeful that our worker President would change the course of our history of 500 years of oppression and exploitation, we kept up production and the struggle for our jobs.

In February 2005, in a meeting with the Minister Luiz Dulci, a committee of experts was set up from BNDES, the BRDE bank and BADESC [Development Agency of the State of Santa Caterina] to study the viability of these factories. The report sent to the President states that "the factories are viable" and suggests that "their debts be transformed into shares, which would be transformed into capital of BNDES and one of the State Development agencies, BRDE or BADESC" (depending on the opinion of BNDES).

We put the plant into full operation, increasing production and sales, winning back hundreds of customers and suppliers. More than that, not only did we protect jobs and create new jobs, we also organized production in such a way as to reduce the working week to 40 hours initially, and since April 2007 to 30 hours, showing that workers can run the factory better than the parasitic bosses. In addition, we came to an agreement with the Labour Court, where we established that we would pay 1% of monthly turnover of the factory to pay off labour debts left by the old management, showing that only workers can help workers, winning for hundreds of former workers their rights, because the factory remaining open guarantees revenue and the payment of entitlements that had been previously lost (the same agreement was sought with the tax authorities - based on Article 28 of the Law Enforcement Tax - considering that 80% of the debts of Flaskô are with the State. But, as we shall see, to this day this has not been accepted t).

In the meantime, we suffered more than 200 threats of confiscation of the machinery in the plant, to be auctioned to pay off debts left by the old employers. Always and everywhere, we explained that the old bosses own more than enough property to pay off the debts. Thus it was necessary to find this property and allow the Flaskô workers to continue working as proposed. This can be done through removing the legal status of the old owners and the granting legal powers to the workers’ management. However, the government has acted to the contrary. If the auctions and the non-acceptance of the unification of foreclosures were to prove insufficient, more than 250% of the revenues would have to be pledged on request of the National Treasury. Therefore, in effect no measures have ever been adopted to defend jobs. And now, as if this were not enough, the Lula government is criminalising and blaming us for the debts incurred by the old private management.

Therefore we ask: how is it that in his reply the President states that we do not want to forget the "old bankrupt company? How come we read in the President’s reply that we want to share with the whole of society all the losses incurred by the mismanagement of the previous owners? No, that is not our position. On the contrary, everyone knows that it is government policy that socializes the losses of the bosses (remember the various measures taken by the government during this crisis). We have always maintained that unpaid debts are taxes that serve our people, for health, education, social security, and housing. We therefore demand that the debt be paid for with the immense property of the former owners, as provided for by Brazilian law.

What we see here clearly is that the government has taken a clear stance, because what we have seen in the past seven years have been attempts to put an end to the experiences of workers' management. The most aggressive of these was the intervention ordered by the Federal Court in the Cipla/Interfibra plants in Joinville-SC, at the request of the INSS and carried out by about 150 heavily armed federal police. This was an attack on workers’ management, on workers fighting for their jobs, and they treated us like criminals. What we see is that the government has chosen to continue threatening us with auctions and seizure of our income, criminalizing the social movement and its leaders, blaming the workers’ management for the damage caused by the old management and by the government’s refusal to act according to the Federal Constitution. What we ask is in the law, but to date the government has interpreted the law in the interests of capital, favouring the former employers at the expense of workers.

Despite these facts, it is worth clarifying another point in the President's reply, where he says that “the workers demand nationalization, staying with the old bankrupt company. For me, nationalisation means sharing out with the whole of society the losses caused by the mismanagement of the former owners.” It is necessary to point out some recent facts to clarify who want to share out the losses caused by the bosses. Let us consider the following and draw some conclusions:

1. Lula authorized the Federal Savings Bank (Caixa Econômica Federal) to socialize the debt of the Silvio Santos group, buying a 49% stake in the Banco Panamericano, leaving control in the hands of the old bosses that had administered during all these years. Is this kind of nationalisation good? And who for? Or is it indeed an attempt to socialize the losses?

2. Lula authorized the Federal Savings Bank to buy (for R$ 4.2 billion) 50% of the share capital and 49.5% of the voting capital of the Banco Votorantim, helping thus to save the Votorantim family. And even with half the capital control was left in the hands of the bosses. This kind of nationalisation is good for whom? Or, again, is it the people that have to pay for the damage done by the bosses?

3. Lula authorized the BNDES to lend R$ 5 billion to the Globo network, one of the largest debtors to the Brazilian INSS (Department of Social Security). Is this not socializing the losses?

4. Lula authorized the BNDES to buy for R$ 2 billion 20% of the shares of JBS, the largest beef exporting company in the world, this soon after the announcement of several layoffs and closing of several plants. Is this not credit for the rich?

5. Claiming to equalize tax recovery procedures with the creation of the Super Receita (Internal Revenue Service), the government revoked an article from the Social Security Act that prohibited the appropriation and distribution of profits when a company has debts with the INSS. Is this not socializing the losses?

6. Lula signed Law No. 11,945, on June 4, 2009, which exempts companies from presenting a Certificate of Good Standing (CND) for loans and refinancing, that is, to present such a document to the federal banks. It is certain that private banks will not accept putting their money at risk, lending money to swindling employers. But the public banks can lend money to the swindlers of the people. Once again the government attends to the needs of the bosses.

The list could go on for many pages. Contrary to what the Lula administration has been claiming, we do not want the workers “to pay the bill” for the economic crisis caused by the bosses. Our proposals are very different from those of the government.

Thus, we cannot accept the answer given by Lula, which ignores two key points. Firstly, it ignores the entire history of the Movement of Occupied Factories and the resistance of the Flaskô workers that for seven years have demanded solutions from the government, only to receive negative responses and attacks from government institutions. On the other hand, we cannot fail to point out the contradictions of the Lula government. It is a government elected by the working class, but that favours the employers as we have shown with the examples above rather than defend the workers, especially those, such as the Flaskô workers, who struggle against unemployment and the disgusting behaviour of the bosses.

It is also worth mentioning that this reply did not appear by chance. At the end of November 2009 we organised a successful meeting, with several political, trade union and community representatives, as a genuine united front, to discuss the urgent need to save the Brazilian people. We discussed about the fact that the policy of tax exemptions and the speculative credit booms are only preparing an even bigger disaster in the future. A true and lasting solution, in the interests of workers, would be to break with the bosses and take concrete steps to meet the needs of the workers. Therefore, we endorse the campaigns for the Nationalisation of the Occupied Factories, re-nationalisation of Embraer [one of the largest aircraft manufacturers in the world], re-nationalisation of the railways, re-nationalisation of Vale do Rio Doce [metals and mining company], 100% nationalisation of Petrobras and the entire Pré-Sal oil fields. This is the challenge before the organisations of the working class, and of a government that claims to defend the exploited.

For all these reasons, we reaffirm our position that only nationalisation under workers' control can ensure the continuity of industrial activity and the maintenance of permanent jobs. Therefore, as we have stated in these past seven years, and as the BNDES report, drawn up at the request of Lula, states quite clearly, we want to dialogue with the government and find solutions. However, what we see is that the government "talk a lot and acts... a lot, but against the workers", as one Flaskô workers said after reading your answer in the newspapers.

We know that there is still time to save the struggle of the Flaskô workers. We want to find a solution to the problems. It is the government that has always had an intransigent position and has never given us any real options, apart from using criminal action against the workers themselves. We want dialogue. In this sense, it is worth highlighting a part of the reply: "With our offer of technical assistance and credit, the way will be open for the complete recovery of the company." For years, we have been asking for such help. The last time we asked for such help the staff by the President refused even to see us, despite seven years of struggle and the seven thousand postcards sent at the end of 2009 demanding such a meeting. And now we have this public statement on the part of the government. Great! If now we have a reply that states they can provide advice, let us apply it concretely. Let us apply and discuss these proposals. And therefore, we ask once again for a meeting with President Lula.

President Lula, you were elected by the workers. Mr President, we want your help. We are workers and we are fighting for our jobs. We are fighting for our dignity and the livelihood of our families. We are fighting to show that workers’ management is more beneficial to the entire population, which meets a real social need. We are fighting for a free and egalitarian society, one that is therefore against the logic of the bosses. And this should start with an amnesty for the leaders of the occupied factories who have been criminalised and blamed for the debts accumulated by the bosses; provide us immediately with technicians and credit; help us to sell our products because our production is used by several state enterprises and other controlled by BNDES.

Long live the struggle of the Flaskô workers!
Long live the resistance of the working class!

Pedro Santinho,
Coordinator of the Factory Council of Flaskô,
Sumaré, January 22, 2010