Venezuela Guarantees Job Security in Nationalized Cement Companies

Mérida, April 14, 2008 (venezuelanalysis.com)– The Venezuelan government will guarantee the job security of the 4,600 workers in nationalized cement factories, according to a statement released over the weekend by the Venezuelan Energy and Petroleum Minister, Rafael Ramírez.

Ramírez, who heads up the Venezuelan indemnity negotiation commission, commented that the workers "should feel joyous, because following this nationalization we will re-establish just relations for all."

The minister also made clear that the sovereign decision of the Venezuelan government to nationalize the cement industry "does not have to do with transnational companies," but rather the government’s goals for the Venezuelan people, goals which do not "fall into line with the transnational strategy of any company."

The nationalization of nearly 40 cement plants of the Mexico-based company CEMEX, France’s Lafarge, and the Swiss company Holcim, was proclaimed by President Hugo Chávez April 3rd.

The Venezuelan Minister of Labor, José Ramón Rivero, met with the cement workers unions Monday concerning the nationalizations. With regard to firings that have already taken place in nationalized plants, the minister said “we are not going to accept this”.

Conversation with the workers “cannot be left aside,” Rivero asserted, “because it represents a new labor relationship that will permit a new distribution in order to attend to the different public works projects going on in the country.”

The United Cement Workers Union of the state of Anzoátegui, which participated in meetings Monday, guaranteed a steady supply of cement during and after the nationalizations.

“The workers are totally in favor of the nationalization,” the general secretary of the union, Oscar Rondón, declared.

Concerning indemnity for nationalized companies, the Venezuelan Ambassador in Mexico, Roy Chaderton, was interviewed by Mexican newspapers over the weekend about the negotiations with CEMEX-Venezuela.

According to Chaderton, Venezuela’s first option is to arrange with CEMEX a mixed enterprise in which the Venezuelan government controls a 60% share.

In the event that CEMEX rejects this minority status, the Venezuelan government is prepared to purchase 100% of the company’s Venezuela operations, Chaderton informed.

"What is sought is a negotiation in which the state and the People of Venezuela as well as the company and Mexican interests win," Chaderton told the press.

The nationalized companies "are making a lot of money in Venezuela," and “they can continue operating in the country if they adjust to the positioning of the position of our economy,” Chaderton assured, emphasizing that there is "room for imagination" in the negotiations.

Chaderton also denounced the "media terrorism" in Mexico that has caused an "over-reaction" to the nationalizations. The ambassador pointed out that the response of CEMEX and the Mexican foreign relations department was much more "moderated" than that of the press, and that Venezuela has appreciated the "sobriety" of their stance during negotiations.

The ambassador also made clear there was never any danger of a diplomatic breach between Mexico and Venezuela, as some news reports alleged. In the spirit of this, he invited the Mexican government to discuss the possibilities for economic accords between their respective state oil companies, PEMEX and PDVSA.

Indemnity for CEMEX, which controls over 50% of the Venezuelan cement market, is estimated by private consulting firms and banks to be between $350 million and $950 million, and as much as $1.9 billion for all three companies.

The estimates vary based on whether CEMEX operations in the Dominican Republic and Panama are included, and whether Venezuela will acquire 60% or 100% of the companies, among other factors.

Meanwhile, the workers council at an already state-owned cement company in Venezuela, Cemento Andino, based in Trujillo state, pledged its support for the nationalizations.

Union spokesperson Alexander Santos said the measure will “accentuate the sovereignty of our country over its soil and the riches contained therein, and furthermore eradicate speculation on this product which is fundamental for construction.”

“We will rescue our sovereignty and put the industry at the service of public policies on home construction and other things without having to permit what happens now, that even though the product exists here, a transnational decides to ignore the public interest and export it,” Santos proclaimed.

The union leader predicted that the nationalization of the three multinational companies will benefit under-paid contract workers by incorporating them into the union’s collective contract as permanent workers, which is what happened when Cemento Andino became state-owned.

In the Venezuelan stock market Monday, 58.5% of the total value of transactions involved CEMEX stocks, the value of which increased between .91% and 1.82%, according to the Venezuelan daily El Universal.