Sinvoz Against Privatization in ex-Yugoslavia
by 26.01.2008 16:25-
Privatization of Zrenjanin's Sinvoz, a railcar manufacturing and repair plant, began in 1990, as required by the Law on Social Capital. By 1993, when privatization efforts were suspended due to hyperinflation, the Sinvoz workers had acquired 14% of shares in the company.
In 2004, privatization was reinitiated under the new Law on Privatization. Sinvoz workers and retirees held 30% of company shares, while the state sold the remaining 56% to Nebojsa Ivkovic, who personally attended the share auction. At the time of the share auction, Sinvoz employed approximately 870 people.
As per an agreement with the Privatization Agency, Ivkovic was obligated to invest further in Sinvoz, with further ownership shares being dependent on such investment. Ivkovic "fulfilled” this contractual obligation in 2005 by arguing that five mothballed steam locomotives purchased for scrap metal were in fact an investment in Sinvoz’s basic operation, netting him a 76% ownership share. Worker shareholders informed the Privatization Agency about the nature of Ivkovic’s “investment” (see photos below), and requested control over fulfillment of contractual obligations related to privatization. As a result of the worker-owners’ demands, the Agency sent several investigators to Sinvoz in the next two years, but their findings consistently found that investment was proceeding as per the privatization agreement.
In the summer of 2006, for the first time ever, Sinvoz workers went out on strike over the issue of unpaid wages. With the intervention of the Ministry of Finance, the strike was suspended after two weeks, but it almost soon apparent that the majority owner had no intention of fulfilling the strikers’ demands.
As soon as his contractual obligation to maintain uninterrupted production ran out in 2007, Ivkovic stopped work at Sinvoz, and began firing an ever-larger number of workers under the guise of a technology related surplus. Worker-owners began organizing protests demanding cancellation of the privatization agreement. Ivkovic’s reaction was to fire the president of Sinvoz’s independent union, Mita Lisica.
In November of 2007, Sinvoz went into bankruptcy. The leading bankruptcy trustee appointed was a company also owned by Nebojsa Ivkovic. Approximately 470 worker were employed at Sinvoz when it became bankrupt; all of them lost their jobs on the same day the trustees were appointed.
On December 28, 2007, about 400 Sinvoz worker-shareholders blockaded the factory and demanded the cancellation of privatization agreement with Ivkovic and relief from bankruptcy. In response to pressure brought to bear by the workers, the Privatization Agency’s last investigation confirmed that Ivkovic had not invested in Sinvoz as required by the privatization agreement but did not cancel the contract, instead giving him an extra 15 days to complete the required investments.
The worker-shareholders of Sinvoz, together with the worker-shareholders from the Zrenjanin factory BEK (which was also privatized and then forced into bankruptcy), have called for a public meeting at the Union Hall. Representatives of the Ministry of Finance and the Privatization Agency have been invited. The workers are demanding the privatization of Sinvoz be cancelled and bankruptcy relief for both companies.
Sinvoz: A Photo Essay on Factory Blockades and a Privatization Tragedy:
"I do not deserve the firm’s treatment of me. Those who run it should have me on their conscience! To my children: your father loves you very much. Forgive me. Dragan". An apology letter from a worker who, believing management claims, did not protests but continued to work. But realizing that he had been duped and that management would not make good on their promises, he committed suicide. As a gesture of respect, his work friends posted his letter on the machine he had operated.
Letter from the Workers-shareholders of Zrenjanin factories Bek and Shinvoz
A year and a half ago, more than 60 prominent intellectuals and activists of the world supported the struggle of the workers-shareholders of Zrenjanin pharmaceutical factory Jugoremedija. That support was key to the most important victory of Serbia's workers over the past eight years: on March 1st 2007, Jugoremedija became the first factory in Serbia controlled by its workers-shareholders.
Today the Jugoremedija workers-shareholders are supporting the struggle of other Zrenjanin workers for their rights. We are asking you to read the following description of the circumstances that forced us to occupy our factories and to start the fight for our right to work and live a decent life.
Zrenjanin, the city that used to be the industrial core of Yugoslavia, has now an unemployment rate of 35%, according to official data. Most of the factories that Zrenjaninian workers built during socialism and lived off for decades are closed today. Seven years ago, during the beginning of the transition in Serbia, neo-liberal experts warned us that the entire Serbian economy would be forced into bankruptcy unless it was privatised as soon as possible. This is how Shinvoz, a company producing and repairing trains and locomotives, was privatised in 2004. The meat processing plant Bek was privatised one year later. Despite privatisation the neoliberal threats came true: both companies went bankrupt.
To someone not well informed about the situation in Serbia, it may seem strange that the new owners forced their companies into bankruptcy. There are very simple reasons for this. Let us explain two of them: Privatisation in Serbia decreed that a minority of shares should be distributed to the workers of the company (in Shinvoz they have 44% of ownership, in Bek 30%). Although the majority shareholders can control the company, it remains impossible to control it absolutely as long as the workers are co-owners. Serbian bosses therefore use a simple tactic: they appoint management with no worker-shareholder representatives and use this absence of control to make bad business deals through which the company becomes indebted. Yet the trick is that the debts are to shell companies owned by the same person. When the factories go bankrupt, they can, as owner of the shell companies, rebuy them on the grounds of debts, this time with 100% of the shares. The collective contract between union and management that protects the rights of workers in Serbia is cancelled when the company goes into bankruptcy. All workers are laid off and the union ceases to exist. When a former major owner regains the factory after bankruptcy there is no more collective contract and the owner chooses whom to re-employ. Any union that is reinstated will be under full control of the boss and his/her new management.
The fact that the main creditors of Bek and Shinvoz are the same people that privatised our factories and led them into bankruptcy through their mismanagement, is evidence of the reasons explained above. After the workers-shareholders of Jugoremedija fought for their rights and showed all workers in Serbia how solidarity and persistence can be effective, the workers-shareholders of Bek and Shinvoz started the fight for their own factories.
The occupation of Bek began on the October 8th and that of Shinvoz on December 28th 2007. Through pressures on the Privatisation Agency to stop breaches of contracts and illegal activities in our factories, the privatisation contract was cancelled at Bek, thus returning 70% of capital back to the state.
Although the government admitted that their tolerating of illegal activities contributed to Bek's bankruptcy, it still refuses to take responsibility for it. The government also refuses to work with workers-shareholders towards the recovery of the factory, thus not protecting its 70% of capital, which, as public funds, belong to all Serbian citizens. In Shinvoz, the Privatisation Agency established that the majority owner breached both the privatisation contract and the law. Yet it didn't cancel the contract with him. On the contrary he was awarded a delay of 15 days to "correct his errors" and to make the obligatory investments (3 years too late!) in the very corporation that he led to bankruptcy.
On January15th, over 1000 worker-shareholders from both factories are going to Belgrade's Union Hall. They will remain there until Shinvoz's privatisation contract is cancelled and an agreement with the government is reached about how both companies can get out of bankruptcy.
We ask for you support in our struggle by appealing to the president of Serbia, Boris Tadic, as well as to the relevant government institutions. They must accept our demands and participate in the recovery of companies that are out of business today due to the illegal activities of their major owners and to the inefficiency of government institutions supposed to control the respect of the law and the privatisation contract.
Yours truly, Protest Board of worker-shareholders of Bek and Shinvoz Milena Prstojevi
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