Mass firings at Kraft Foods’ plant in Argentina sparked protests throughout the nation, and ignited a new wave of worker organizing. In August, Kraft fired 160 workers after they went on strike to demand proper health measures at the company’s factory in suburban Buenos Aires during the swine flu epidemic in Argentina. Most of the fired workers were active union members; almost all of the factory’s union delegates were fired.
Kraft workers responded by taking over the plant. They staged a 40-day work stoppage, with the majority of the 3,000 workers participating in the strike. The U.S.-based company has accused protesting workers of prohibiting personnel from leaving the plant, but the union says that they were camping inside the plant peacefully to demand their jobs. On Sep. 25, police attacked the workers and removed them by force so Kraft could resume plant operations.
The factory looks more like a prison than a factory. Barbed wire borders the gates, guards walk the perimeter with attack dogs, and police patrol on horseback. Union members are barred from entering.
"There are police inside the plant. The inspectors are going to the lines and forcing people to work. Outside the plant, there are police surrounding the factory," says Carlos Mores, a union delegate fired from Kraft.
Kraft: King of Consolidation
Kraft’s history is laden with acquisitions, buyouts, consolidations, and the raw concentration of market power. The company dates back to 1903 when James L. Kraft opened a cheese distributor in Chicago, Illinois. In 1913, Kraft opened its first plant to manufacture cheese. Kraft’s claim to fame came through consolidation and following Andrew Carnegie’s motto: "Put all your eggs into one basket and then watch that basket, do not scatter your shot. The great successes of life are made by concentration."
By World War II the cheese giant was sending 4 million pounds of its patented pasteurized processed cheese to Britain weekly. Founding itself on the coattails of the military-industrial complex, its next frontier was the American housewife’s modern kitchen, encouraged to cook easier, tastier, faster foods with a much lower nutritional value.
Kraft grew to become one of the largest food companies in the world after acquiring Nabisco Brands in 2000. Soon after, the Marlboro Man purchased Kraft in 1992. Altria (the new name for tobacco and food giant Phillip Morris) by 2000 planned to spin off control of Kraft Foods, which now is the second largest food company in the world, after Nestle.
The company produces in more than 70 countries, and distributes in more than 150 countries. In many countries, like Argentina, the food processing leader quietly buys out local brands and markets the brand under the same name. Consolidation of market power throughout the food industry has been a creeping trend, and Argentina’s food market is no exception. Kraft’s largest gem in Argentina is the Terrabusi cookie brand.
In 1994 Nabisco foods purchased Terrabusi, the nation’s largest cookie/cracker manufacturer. At the time, the factory employed 8,000. By 2009, that number shrunk by half to only 4,000 workers. The company cornered nearly 50% of the nation’s cookie market, making Kraft’s plant in the working class suburb of Pacheco one of the most important outside the United States.
The U.S. multinational reaped record profits in 2008, taking in $42 billion dollars in revenue. "Kraft is one company that has managed to do well in spite of the economic downturn, because hey, people have to eat," boasts a Kraft online video. With skyrocketing food prices, many consumers turned to more economical, processed food, helping Kraft’s stocks peak at an all-time high on Sep. 18, 2008 at $34 a share.
During the swine flu outbreak in Argentina in July, the health ministry issued guidelines for workplaces. These included providing anti-bacterial soap, alcohol gel, and paper towels for increased hygiene and granting leave to pregnant women working in enclosed spaces, who are known to be at greater risk from the virus.
"The conflict started during the H1N1 epidemic," says Fernando, a worker fired from Kraft. "We were demanding improvements like paper towels, toilet paper, alcohol gel, and other health measures. Because we made our demands, they fired 160 workers."
In addition, the company refused to give pregnant women and women with children maternity leave. The Labor Ministry requested that Kraft Foods take health precautions, as schools, public spaces, and workplaces were shut down throughout the country to prevent the H1N1 virus from spreading, but the corporation refused. In addition, the company shut down the company daycare center offering women 200 pesos (70 dollars) to find their own private child care. The Labor Ministry or Food and Beverage Union did not intervene, but the ministry described Kraft as a "hard company" in respect to the labor conflict.
During this time, the company brought in police to guard the factory. According to union representatives, the company went so far as to bring in managers to interrogate workers with the police present, but without the workers’ labor lawyers. The workers decided to hold a work-stoppage, showing up for their shifts and then camping inside the factory.
The U.S. company accused protesting workers of prohibiting personnel from entering the plant and threatening managers, but the union says that they were peacefully protesting to assert their demands. After striking workers went to the factory administrative offices, Kraft decided to fire 160 of the workers inside the plant.
A month-long campaign followed, to demand that the workers be rehired and persecution of union activists be halted. Workers carried out a series of road blockades and a total work stoppage for more than 40 days. Around the country, students, union activists, unemployed workers, and human rights groups organized actions in solidarity with the workers of ex-Terrabusi, today Kraft Foods, Inc.
For Kraft Foods, unionists and strikes blemish the company’s public image. According to Sara Jones from the Say No to Kraft campaign in the United States, Kraft’s headquarters have been following developments in Argentina closely. "One of the main reasons we’re creating a solidarity campaign from here in Chicago is because the headquarters is located in Illinois and we are well aware that they are managing this ‘operation.’ On websites dedicated to news about the struggle we have seen the IP addresses of 17 computers that are connected from EDS/Kraft Glenview, IL."
Activists in Kraft’s home state Illinois began the campaign in solidarity with the Argentine workers following the firings and have led a boycott campaign against the food leader, with products in 98% of American homes.
In the midst of a global economic crisis, job losses can literally destroy a family. At a time when Kraft has reported record profits, it decides to fire workers. Kraft has admitted that it fired the workers for participating in protests against the company. However, many of the delegates say that in addition to purging union activists from the company, Kraft planned to restructure shifts by cutting an entire shift and imposing extended hours on the others.
"The company wants to implement 12-hour shifts, but they need to cut personnel. First they had to remove all of the labor organization inside the plant—our elected union delegates and internal commission at the factory," says Fernando.
Signs point to a premeditated decision to fire the workers, with Kraft using the protests as an excuse to lay-off 160 workers en masse and rid themselves of union activism. In an interview published in Pagina/12 Labor Minister Carlos Tomada said that the conflict at the Kraft factory was "a conflict where the company made a decision to get revenge on its workers."
Kraft’s Hopes for a Banana Republic
Following failed negotiations between the Labor Ministry, Kraft, and union delegates late on Sep. 25, police surrounded the plant and attacked protestors. They arrested 60 people and injured 12, police shot tear gas and rubber bullets, beating others and attacking protestors while on horseback. "Kraft is a North American multinational that has the money to finance repression and pay fines to the Labor Ministry when they violate Argentina’s labor laws," says Fernando. The corporation has violated the Obligatory Conciliation period ordered by the Labor Ministry which would enforce the temporary rehiring of all fired workers until both sides of the conflict reached an agreement. Kraft even called for the U.S. embassy to take its side in the increasingly costly labor conflict.
Since the strike, the company has only reinitiated normal production on five of its 36 product lines. During the 40-day work stoppage, the production lines were paralyzed, including the Oreo line, clogging pipes with the white cream used in the cookies. The factory’s silos have accumulated bugs contaminating flour supplies. Kraft’s Director of Corporate Affairs Pedro Lopez Matheu said that the company has seen "significant losses," compared to 2008 sales in Argentina topping 370 million dollars.
During the eviction, police detained protesters inside the factory in a scene reminiscent of when unions were persecuted, detained, and disappeared inside the Ford factory during the nation’s 1976-1983 military dictatorship. Human rights lawyer Maria del Carmen Verdu says Kraft is in violation of Argentina’s criminal code because it used the plant as a detention center. "Instead of being taken to the police stations, prisoners were detained inside the factory, in an unprecedented circumstance where lawyers couldn’t even enter the place where the prisoners were being detained."
Business leaders of the Industrial Union of Argentina (IUA) are pushing the government to get tough on rising protests. They fear the protests could interfere with their plans for massive layoffs using the economic crisis as an excuse. The UIA reports that since 2008 there have been more than 220,000 layoffs in Argentina.
"Here in Argentina the economic crisis is getting worse. Many companies need to ‘restructure’ and cut labor costs to maintain profits," says Carlos Mores, another union delegate fired from Kraft who witnessed the police attacks on Sep. 25. "Kraft Foods, and other multinationals that have the UIA’s support, are seeking to restructure personnel. This is why the government allows violent repression against workers, in scenes we haven’t seen since the military dictatorship. Because they want the workers to carry the burden of the economic crisis."
Violating its promise to stop the firings, on Sep. 26 Kraft suspended 100 more workers who they suspected of participating in protests. On Sep. 28, thousands of workers and supporters marched in Buenos Aires to demand that the workers be rehired. The Kraft case quickly became emblematic of a larger battle over who would pay for the economic crisis—workers or the companies who skimmed off record profits before the fall.
"When the conflict started over health measures for the swine flu, Kraft already had a plan to fire the union delegates in order to make cut backs, adding to poverty and unemployment throughout the region," said Nora Cortinas, from the human rights organization Mothers of Plaza de Mayo at the massive march in support of the Kraft workers.
In the end, Kraft agreed to review the dismissals "on a case-by-case basis." The only offer the company has made was to 50 of the workers, saying that the fired workers are dangerous to the company, according to Kraft’s Lopez Matheu. The union delegates have refused this offer at the latest round of talks at the Labor Ministry.
The U.S. Embassy has not intervened directly. However, it issued a statement that contained the veiled threat of reduced foreign investment flows. "The embassy has been following the conflict based on our interest in promoting U.S. investments in Argentina, which have helped generate jobs for over 150,000 Argentine workers."
"Inside and outside, the plant has been militarized," says Mores. The company’s most direct violation of Argentina’s labor code has been to prohibit union delegates from entering the plant. According to the law, companies must allow even suspended delegates to fulfill their roles inside the plant. The Labor Ministry has reiterated the delegates’ right to fulfill their duties, but provincial police and barbed wire protecting the factory has made this an impossible feat.
Kraft’s Anti-Union Practices Across the Globe
"Kraft has a history of getting rid of the organized workers and union organizers that are not under their control," says Jones, from the campaign to boycott Kraft in the United States. Colombia’s Food Union, Sinaltrainal, has reported persecution of union members at Kraft factories in that country.
Kraft closed five factories in South America after the acquisition of Nabisco brands. Since 2003, the company has fired hundreds of workers, cutting personnel by 37%. When firings weren’t enough to stave off union activity, the company has resorted to direct threats, as in the case of a group of 30 workers who were locked inside a lunch room and told to sign letters of recognition. After workers realized that they were locked inside, they refused to sign and held a protest in front of the Colombian factory. Similar to the Argentine case, in Colombia Kraft has also used the police to forcefully remove protesting workers from factories.
"The plant managers that have passed through this company over the last six years have had rising careers, climbing through various posts and seeking promotion by strictly applying the company’s anti-union policies and using coercive measures against the workers," states the Sinaltrainal union in Colombia.
The U.S. boycott campaign states that Kraft has also played a role in the recent Honduran coup. "Kraft Foods has ties with the coup in Honduras," says Jones. "The Kraft Foods Company is a member of the Honduran American Chamber of Commerce—AMCHAM Honduras, which strongly supports the coup in Honduras and has stated its support for Micheletti." Kraft joined CitiBank and Wal-Mart, also members of AMCHAM, in a public statement of support for the "new president of Honduras, Roberto Micheletti."
The Honduran National Business Council, of which AMCHAM is a member, issued a press release on the day the Honduran Armed Forces kidnapped the democratically elected president, Manuel Zelaya, and forced him onto a flight bound for Costa Rica. "President Zelaya’s departure comes as a result of a systematic violation, by the government he headed, of the constitution and Honduran laws … What occurred today was the not changing of one president for another; today, framed in national unity, respect for the constitution, national laws, and institutionalism was achieved," states the press release.
The Kraft conflict in Argentina may be the straw that breaks the camel’s back. It has already sparked massive protests as an outcry against further firings throughout the country. Many have said that if Kraft gets away with firings, it’s a green light for companies in Argentina to follow suit. Other groups including the FUBA university student association, human rights group Mothers of Plaza de Mayo Linea Fundadora, Subway Workers, hospital employees throughout the nation, neighborhood assemblies, and unions are fighting for representation in their locales throughout the country to demand an end to repression of union activity and firings. The broad-based citizen response shows the resentment that has built up against transnational corporations that violate national sovereignty by breaking labor norms and laws, and unresponsive unions and governments unwilling to defend workers.
Kraft may have met its match in Argentina. The country has a long tradition of labor organizing and strong and active social movements. The current crisis has heightened demands for a new economic model less dependent on foreign investors and companies that use mobility as a way to control workers in developing countries.
Marie Trigona is a journalist based in Argentina and writes regularly for the Americas Program (www.americaspolicy.org). She can be reached at mtrigona(a)msn.com.