Venezuala to Nationalize Steelmaker Sidor
Government alleges, Ternium denies worker mistreatment
Government alleges, Ternium denies worker mistreatment
Fulfilling a frequent threat, Venezuelan president Hugo Chvez ordered the nationalization of Siderrgica del Orinoco, or Sidor, the nation’s largest steelmaker. Sidor has an estimated annual capacity of 3.6 million metric tons, and is an operating division of Ternium S.A., a regional steel producer with operations stretching from Argentina to Mexico.
The decision came at the end of negotiations between Sidor, its workers, and the government over a new wage package. Workers rejected the company’s latest offer last week. Venezualan vice president Ramon Carrizalez declared Sidor’s unwillingness to increase its offer revealed “a grand arrogance” and “a colonizer attitude” from a company that wishes to continue “barbarous exploitation” of its workers.
“This is a government that protects workers and will never take the side of a transnational company,” Carrizalez declared.
The president of Sidor’s board of directors, Maritza Izaguirre, said the government’s allegations of worker mistreatment are false, adding that Sidor has been “subjected to constant supervision and auditing of its management by organisms of the state,” and that all of its decisions have been made in compliance with Venezuelan law.
Ternium, based in Luxembourg and headquartered in Argentina, also insists its wage offers have been fair. In a letter to Chvez asking him to intervene in the dispute, Ternium chairman Paolo Rocca contended that Sidor had offered a 130% increase in worker salaries, which he asserted would make Sidor’s workers among the best-paid in Venezuela.
Chvez has threatened nationalization several times in recent years, characterizing these plans as part of a strategy to strengthen socialism in Latin America as an alternative to North American capitalism.
In the past, Chavez has nationalized Venezuela’s oil, telecom, and electrical utility companies, though the wider takeover efforts seemed to be tabled until recently. This week, Chvez also directed his government to nationalize the country’s cement industry.
Analysts say the moves on cement and steel are driven by Chvez’s need to revive his popularity with voters in advance of elections later this year. Venezuela has been hit by food shortages and various other economic problems, generally attributed to the disruptions caused by nationalization efforts.
Previous nationalizations have resulted in Venezuela compensating foreign owners for the local assets, though Carrizalez would not estimate the value the government places on Sidor.
The decision came at the end of negotiations between Sidor, its workers, and the government over a new wage package. Workers rejected the company’s latest offer last week. Venezualan vice president Ramon Carrizalez declared Sidor’s unwillingness to increase its offer revealed “a grand arrogance” and “a colonizer attitude” from a company that wishes to continue “barbarous exploitation” of its workers.
“This is a government that protects workers and will never take the side of a transnational company,” Carrizalez declared.
The president of Sidor’s board of directors, Maritza Izaguirre, said the government’s allegations of worker mistreatment are false, adding that Sidor has been “subjected to constant supervision and auditing of its management by organisms of the state,” and that all of its decisions have been made in compliance with Venezuelan law.
Ternium, based in Luxembourg and headquartered in Argentina, also insists its wage offers have been fair. In a letter to Chvez asking him to intervene in the dispute, Ternium chairman Paolo Rocca contended that Sidor had offered a 130% increase in worker salaries, which he asserted would make Sidor’s workers among the best-paid in Venezuela.
Chvez has threatened nationalization several times in recent years, characterizing these plans as part of a strategy to strengthen socialism in Latin America as an alternative to North American capitalism.
In the past, Chavez has nationalized Venezuela’s oil, telecom, and electrical utility companies, though the wider takeover efforts seemed to be tabled until recently. This week, Chvez also directed his government to nationalize the country’s cement industry.
Analysts say the moves on cement and steel are driven by Chvez’s need to revive his popularity with voters in advance of elections later this year. Venezuela has been hit by food shortages and various other economic problems, generally attributed to the disruptions caused by nationalization efforts.
Previous nationalizations have resulted in Venezuela compensating foreign owners for the local assets, though Carrizalez would not estimate the value the government places on Sidor.
