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Factories recovered by workers
Recovery of factories in practice

 The legal strategy applied to each process of recovery of a factory is sustained by a project that demonstrates the viability of its exploitation under the workers supervision. The projects of viability are submitted to the courts that serve bankruptcy or, in case of default, in provincial legislatures to apply for the process of expropriation. When designing the strategy of the project, the workers inevitably take into account the fact that the “traditional” enterprise filed bankruptcy because of a lack of competitiveness and that repeating the same architecture for production would give the project a high level of uncertainty.

To formulate a project, certain managerial principles are taken into account in the movement of recovered factories as they have given excellent results in various experiences.

The Principles

The workers invest their knowledge, time and effort in the organization and reap the economic results of their investment. Work produces capital. The substantial difference is the organizational structures with respect to other type of structures where economic results arise from an economical investment. Capital is a producer of capital itself, and work is not an investment but a resource.

The factories recovered by workers do not constitute a system of self-management whose objective is to create a social economic network alternative to the market. The factories achieve once again their efficiency in the market by competing in it. The factories are not capitalists because their objective is not to maximize the profit of capital, but the well being of its workers.

In the last years many reports and publications have been edited on these recovered factories. Nonetheless, in general they tend to emphasize the traditional approach on the market social economy, such as the self-managed businesses, the capitalist firms, or examples of social firms that should be nationalized. As matter of facts, the recovered factories represent a particular and successful experience from the economic and the social perspective, and generate a fundamental change towards a vision of human being considered as resource of labor for another ones, and architect in the construction of its own future.

The Organization

Its model of management constitutes one of the pillars that supports the viability of the factories associated with the movement. The factories have a system of open management in which the behavior of its members is interconnected with the special characteristics of the scenario in which they act.

A situation of crisis fortifies unity among the workers as they reach high levels of commitment and solidarity. Solidarity and the similarity of the circumstances allow them to feel a greater sense of safety and strength to face adverse scenarios. Commitment is generated by the information shared and the democratic decisions taken in the context of the assemblies.

Since the legal strategy of each factory allows the workers to use the means of production, the project is governed with common spirit, through dissemination of information and democratic decisions, and with solidarity which helps one another in the correspondent tasks and towards the objectives they need to fulfill.

This culture is added to the vast experience that the workers have with the means of production and the facilities. The efforts are focused in a first instance towards cleaning up and maintenance, in order to create the adequate conditions to produce. The first order from the market is adequately met in time and with high levels of quality, motivated obviously for the same conditions of commitment and solidarity.

Every achievement they reach, in turn, fortifies commitment and solidarity of the working team. The horizontal control makes managerial and supervision levels unnecessary and it reduces their respective costs. The gymnastics of this organizational strategy enables the firm to achieve high levels of efficiency, high and adequate levels of quality and an improvement in the economic productivity.

	Traditional Firm	Recovered Factories
Structure	Vertical	Horizontal
Levels of profit	Fixed by the supply of the market	Distribution of results
Politics of profits	Differentiated by scale	Equal distribution
Objectives	Fixed by management	Fixed by consensus
Efficiency	Difference between the firm’s objectives and the individual ones	Both the firm’s objectives and the individual ones coincide
Control	Vertical	Horizontal
Market Strategy	Competitive	Competitive
Productivity	Start-up costs	Experience
Leadership	Leader	Collective
Decisions	Fixed by management	Democratic

The process of recovery

The process of recovery can be divided into three phases:

• The first phases is the ownership of the means of production to start-up the activities
• The second phase focuses on subsistence. The first operations are carried on when concrete orders are received from customers, which allows the creation of the necessary liquidity for the initial working capital. The workers realize this activity at their own risk and they distribute the first benefits to cover their basic needs.
• The third one is the sustainability phase. The Cooperative starts to sell its products or services in the market. This allows them to earn larger margins, which are allocated to create inventories, for maintenance and investment in equipment to ensure the soundness of the process, and/or open new lines of production. The distributed earnings increase considerably.


The legal entity

Even though the regulation of the cooperatives in Argentina has some restrictions for the recovered factories, this method is adopted because it is the legal entity best suited to the principles that support the factories: the workers invest their knowledge, time and effort in an organization and collect the economic results of their investment.


The Market Analysis

The factories, that have been inoperative, leave an unsatisfied demand. Through formal and informal contacts with clients, in general, its possible to create sufficient information to determine the dimension of demand with high level of certainty. With this information workers can decide about the lines of production that need to be activated to meet this demand.


Physical Sizing

The state of the goods used in a factory has a direct relationship with the installed facility. The goods are the following: land and its improvement; building and complimentary works; industrial facilities; machines and equipment; used and auxiliary equipment; furniture, tools and infrastructure.

In the process of factories’ recovery, in general, the workers had to face deterioration or absence of production goods, as a consequence of the lack of investment in preventive and regular maintenance during the last periods of firm’s operation. They also faced the consequences of vandalism derived from carelessness and abandonment of the facilities or actions of dishonesty of those who have the custody or administration of the goods and facilities of the failed firm. In other cases people who were interested in buying at vile prices in case of an auction stole vital parts of the equipment.

The workers experience on equipment and facilities is one of the main elements of success. Tuning of the equipment is usually carried out with help of other factories of the Movement that provide material and labor of their specialists.

Even though the load of work is high, usually it’s possible the reach start-up with a very low or no monetary capital. In this way a certain installed capacity is regenerated, and this will define the quantitative limit of the production.