O-I workers in Venezuela stage rallies

10/28/2010

Workers at two Owens-Illinois Inc. plants in Venezuela are protesting the country’s plans to nationalize the facilities while the firm has begun preliminary talks with government officials about the forced acquisition.

Company spokesman Stephanie Johnston said the protests have been organized spontaneously by O-I’s Venezuelan employees and their families, and that the firm has no role in the demonstrations. More than 1,000 employees work at the two facilities, which are located in Los Guayos and Valera, about 100 and 300 miles west, respectively, of the capital city of Caracas.

El Tiempo, a daily newspaper in Valera, said the nationalization directly and indirectly could affect up to 1,500 people in the town where O-I is by far the largest employer.

The newspaper quoted an unidentified plant worker as disagreeing with the government’s assertion that O-I had been exploiting its Venezuelan work force. “Nothing could be further from reality,” the unidentified worker said. “We do not want to participate in politics. We want to work, period.”

Operations at the plants have continued in spite of protests and the Venezuelan government’s planned takeover, and no incidents have been reported, Ms. Johnston said.

Venezuelan National Guard soldiers remained outside the two facilities for a second day after Venezuelan President Hugo Chavez announced plans late Monday to expropriate O-I’s bottle-making plants.

El Carabobe o, a newspaper that covers Los Guayos, said reports emerged of silica supply shortages at the local plant since Tuesday night. Silica is used for glass production.

The Venezuelan government published a decree Tuesday in the country’s official gazette, which announced the “forced acquisition” of O-I’s properties in the country. O-I officials said they have been receiving regular updates from Enrique Machaen, general manager of O-I in Venezuela, and Andres Lopez, president of O-I Latin America, who is based in S o Paulo.

“Every couple of hours, we’re getting some kind of update from the field,” Ms. Johnston said.

Mr. Machaen talked Wednesday with officials from the Venezuelan ministry that is enforcing the O-I takeover. However, Ms. Johnston did not yet know the nature of those discussions.

Venezuelan Vice President Elias Jaua Wednesday called on O-I to negotiate a “fair” compensation for its two plants. He said, in comments carried on state television, that the government planned to meet with company representatives in Venezuela to agree on a takeover strategy and to evaluate the local unit’s value.

“The government has always honored its payments in terms of fair and real prices to the owners of companies that have been nationalized,” he said during the televised statement.

Mr. Jaua said the government decided to take over O-I’s plants “with the purpose of democratizing the Venezuelan productive economic sector and eliminating monopolies and oligopolies,” according to a report on the Venezuelan Embassy’s U.S. Web site. The government accused O-I of “illegal monopolistic practices.”

“We guarantee workers their rights under the collective agreement, so there is no reason for any worker to feel scared,” Mr. Jaua said. “It is a measure that includes them and is gradually expanding their labor rights.”

O-I, the world’s largest producer of glass containers and headquartered in Perrysburg, said its local unit always had followed Venezuelan law.

Mr. Jaua said the workers’ protests were impeding government efforts to take control of the firm’s assets.

Mr. Jaua said that Empresas Polar SA, Venezuela’s largest company and one of O-I’s main clients, was behind the protests.

“Its workers connected with Empresas Polar are massing outside Owens-Illinois,” Mr. Jaua said. “We ask Empresas Polar, which is impeding an act by the Venezuelan state, to distance itself from the position some of them are taking.”

But reports from Venezuelan newspapers showed dozens of workers standing outside of O-I’s plants, and quoted them as being opposed to the government’s expropriation plans because of fears that the wages and benefits they now receive will be diminished under government control.

Noel Alvarez, president of the Federation of Chambers of Commerce of Venezuela, told El Tiempo that the O-I takeover is a “significant loss” for the country’s business sector, and said the Venezuelan government plans to expropriate 40 companies in a similar fashion.

“The only thing that seems to be in the state’s agenda is to destroy the initiative of private enterprise,” Mr. Alvarez said.

Information from Bloomberg News Service was used in this report.

Contact Sheena Harrison at:sharrison@theblade.comor 419-724-6103.