Brazil: New Labor Militancy Is Costing Millions

A wave of labor militancy, born of inflation-slashed earning power and thriving on the freedom provided by the return of democratic government, is costing Brazil’s debt-ridden economy millions of dollars and generating political tensions that have divided the Cabinet of President Jose Sarney.

After years of authoritarian military rule, which repressed union demands and forced down workers’ wages, there is an explosive demand from labor for better pay and working conditions.

And the success of the government’s efforts to revive the economy, reduce inflation and boost exports to meet Brazil’s payments on $100 billion in foreign debt depends heavily on whether it can handle labor’s demands and still retain business confidence.

The labor problem is centered in Sao Paulo, the state responsible for 50% of Brazil’s industrial output, as well as many of its major agricultural exports, such as sugar, alcohol and orange juice concentrate.

More Strikes Threatened

Some strikes during the first two months of the Sarney government, such as an airline stoppage that halted domestic flights for five days, have been solved by negotiations.

Others, such as a postal workers’ strike in Rio de Janeiro that halted deliveries of mail and telegrams for six days, have collapsed from lack of worker support or from weak union organization.

Many more strikes are threatened, however, including one by electrical and water system workers in Sao Paulo that would severely disrupt the metropolitan area of 13 million people. Although such a strike would be illegal under present law, bus and subway workers have already staged such walkouts briefly in Sao Paulo and Rio de Janeiro.

And, just as the sugar cane and citrus harvests are to begin, farm workers are also threatening to strike, having rejected the farm owners’ latest wage offer. More than 400,000 workers are needed for the seasonal harvest.

Mood of Uncertainty

The mood of Brazilian labor was displayed last weekend by metalworkers, who assembled outside their five-story union headquarters in this Sao Paulo suburb to hear about progress in their strike against most of Brazil’s big automotive factories--Ford, Mercedes-Benz, Volkswagen, Scania-Vabis and other related firms, whose modern factories dot the rolling red hillsides.

The workers expressed uncertainty about the future.

“Last month, I sold the bicycle I rode to work but now the money is gone,” said Antonio Alves, who works at the Volkswagen plant. “The workers always lose. If you don’t go on strike, you get paid less than the inflation. But then you can get fired and lose everything.”

Many of the auto workers, whose wages average $120 a month, have not received a paycheck for more than a month; 5,000 workers have already been dismissed without pay. The union’s only help for them is a weekly basket of food.

The workers whistled and booed when Jair Meneguelli, the union president, announced that management’s latest offer on a new contract was unacceptable. The firms have argued that they cannot raise wages beyond the rate of inflation, plus 5% for productivity, because the government has imposed price controls on automotive sales here.

Surprise Walkouts Threatened

“The strike will go on. We will stop factories by surprise and keep up the pressure for a year, if we have to,” shouted Meneguelli, 37, a stocky, bearded former tool and die maker at the Ford plant who was elected union president in 1982.

Some workers were talking about going back to work, at least to earn enough money to pay bills accumulated during the 38 days of the strike. Jacinto Anacleto, who works at the Ford plant, said that his wife and children are eating at the home of his mother-in-law, but he still has to pay his mortgage or risk losing his home.

“I may have to go back to work for a month or two,” he said. “But we will stop again and again until we get a fair contract.”

On Monday, union pickets were unable to keep 13,000 workers from going back to work at the Ford plant. Strikes continued at Volkswagen, Mercedes-Benz and at a Perkins diesel motor plant, but the total number of workers striking in Brazil’s auto industry has declined from a peak of 120,000 to less than 50,000 now.

The prospect of continuing job-action by the workers worries auto makers, who have to meet foreign export contracts. Brazilian auto manufacturers produced 800,000 vehicles last year and exported more than $2 billion worth of cars, trucks and parts. The automotive factories say the strikes have cost $500 million in production, reducing export earnings last month by $200 million.

For Sarney, the strikes have produced the first major rift between Cabinet ministers and pose a threat to the unity of the coalition that supports him.

Labor Minister Almir Pazzianotto is a former union lawyer who belongs to the Brazilian Democratic Movement Party, holder of the coalition’s largest block of congressional seats. He favors government mediation to resolve the auto dispute, averting a possible declaration of strikes as illegal.

Minister of Industry and Commerce Roberto Gusman, of the Liberal Party, the smaller member of the coalition, represents conventional business attitudes. He has criticized Pazzianotto for not applying legal restraints and has denounced the strikes as “political.”

Sarney has promised an early reform of labor laws, which are very restrictive of union organization and limit the right to strike. However, fear of social disorders if strikes cripple public services, such as transportation, has delayed the changes.