[progchat_action] Venezuelan workers emboldened with steel mill takeover
 
Date: Sun, 13 Apr 2008 23:57:33 -0500 (CDT)


Chavez emboldens workers with takeover precedent

By Frank Jack Daniel
 Reuters
April 11, 2008

Caracas- President Hugo Chavez has set a precedent that emboldens workers
and worries businesses by nationalizing Venezuela's largest steel maker in
the middle of a sometimes violent labor dispute.

Left-wing Chavez ordered the takeover this week of the sprawling Ternium
Sidor steel plant -- his latest move to put what he calls strategic
industries in the South American oil nation under state control.

For months, workers had demanded the government step in to end a dispute
over pay and pensions that had led to strikes and clashes with police in
which a union leader was shot in the leg.

Chavez's decision now opens the door to increased pressure to resolve labor
disputes and could create headaches for the private sector and the
government, which is a major employer.

His vice president, Ramon Carrizalez, said "the worker comes first" in
Chavez's Venezuela.

Jubilant workers at the Argentine-run Ternium Sidor (TX.N: Quote, Profile,
Research) complex on the banks of the Orinoco river celebrated, cheering and
chanting in front of state television cameras as they expected the
government to quickly meet their pay demands.

"What is going to happen with the rest of the unions in Guayana?" asked a
former minister in Chavez's economic cabinet, speaking on condition of
anonymity. "Others could be inspired to ask for the same."

The area around Ciudad Guayana in the east of the country is at the heart of
Venezuela's industrial belt, which is almost entirely in government hands.

Workers at another union in the region took less than 24 hours to appear on
television after the announcement and urge Chavez to take over a smaller
company that was privatized along with Sidor in the 1990s.

Ever since he first tried to take power through a failed coup in 1992,
Chavez has promised to return privatized industries to the state.

Since he won office at the ballot box in 1998, the former tank division
soldier has taken over large private farms and foreign-run utility companies
and oil assets, paying billions of dollars in compensation.

Last week, he also ordered the takeover of companies owned by the three
largest cement producers.

Ismael Perez of business group Conindustria said the impact of the
nationalizations policy was being felt at labor negotiating tables across
the private sector.

"This is something in mind of many unions, when there are contract
arguments, they immediately say they will ask the government to expropriate
or nationalize if there is no agreement," he said.

INHERITING PROBLEMS

Much of the country's mineral and metalworking industry was never
privatized, including bauxite, iron ore and coal. The government controls
most of the sector and already has labor contract disputes with some unions
in the region.

In the short term, the nationalization of Ternium Sidor should bring
political benefits for Chavez as the self-styled socialist revolutionary
showed he can side with workers.

But he will soon have to deal with complex labor relations with Sidor's
almost 10,000 workers and management.

Sidor was founded four decades ago and grew rapidly in the 1970s oil boom to
become one of Latin America's largest steel operations.

The union is one of the strongest in the country and is divided between
pro-Chavez and opposition tendencies.

The union has asked the government to resolve the contract dispute and
blocked steel exports from Sidor since the nationalization order.

This is nominally to prevent Ternium from making bad faith sales, but it may
also be to apply pressure on the government.

"He is going to inherit all the antagonisms that there are between
management of a steel company and the work force," said Daniel Hellinger, a
Venezuela expert at Webster University in St. Louis.

(Editing by Saul Hudson and Sandra Maler)

http://uk.reuters.com/article/oilRpt/idUKN1145688120080411

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