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Viewing cable 07BUENOSAIRES1761, ARGENTINA: EMBASSY ASSISTS U.S. CHEMICAL FIRMS AND

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Reference ID Created Released Classification Origin
07BUENOSAIRES1761 2007-09-06 13:39 2011-08-26 00:00 UNCLASSIFIED Embassy Buenos Aires
VZCZCXYZ0001
RR RUEHWEB

DE RUEHBU #1761/01 2491339
ZNR UUUUU ZZH
R 061339Z SEP 07
FM AMEMBASSY BUENOS AIRES
TO RUCPDOC/USDOC WASHDC
INFO RUEHC/SECSTATE WASHDC 9145
UNCLAS BUENOS AIRES 001761 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR WHA/BSC 
PASS TO DEPUTY UNDER SECRETARY FOR FNS - KATE HOUSTON 
USDOC FOR 4322/ITA/MAC/OCAC/PEACHER 
USDOC FOR 3134/USFCS/OIO/WH/KESHISHIAN 
FAS/OA/OSTA/OCRA/ONA/OGA/OTP/OCBD/OAO/OFSO 
 
E.O. 12958:  N/A 
TAGS: EINV EAGR ECON BEXP ELAB AR
SUBJECT:  ARGENTINA: EMBASSY ASSISTS U.S. CHEMICAL FIRMS AND 
SHERATON HOTEL IN LABOR DISPUTES 
 
 
------- 
SUMMARY 
------- 
 
1. (U) In July 2007, the Embassy learned that Argentine chemical and 
petrochemical unions had called strikes in Zarate/Campana region, 
paralyzing production in that sector, which features four U.S. 
companies.  One of those firms, Monsanto, initially requested no 
Embassy involvement, as they hoped that the strikes could be 
resolved peacefully with the assistance of the Ministry of Labor 
(MOL).  After those talks failed, Monsanto sought our help, and we 
mobilized.  FCS and FAS contacted the three remaining U.S. firms in 
the region, Eastman Chemical, Rohm & Hass, and Merisant, who all 
reported that their plants had been similarly crippled by the 
strikes.  DCM called the Labor Minister to signal our interest in a 
solution.  After a prolonged period of stalled talks, and with 
strong continuous  Embassy support, industry recently reached an 
agreement with union leaders.  Mission assistance was also involved 
in the lifting of a taxi blockade of a local Sheraton hotel and 
providing security to the hotel while the disagreement was in play. 
Ambassador talked to the Interior Minister, Labor Minister, the 
Secretary of Tourism and the Mayor of Buenos Aires in support of a 
 
SIPDIS 
solution.  Both Sheraton and Monsanto subsequently expressed 
appreciation for Embassy efforts.  These episodes and others not 
directly involving US companies suggest that Argentina's unions are 
becoming increasingly militant, beyond the traditionally active. End 
Summary. 
 
------------------------------------------ 
The Establishment of Collective Bargaining 
------------------------------------------ 
 
2. (SBU) Last year, chemical and petrochemical companies in the 
Zarate/Campana region established a local chapter of the National 
Chamber of the Chemical/Petrochemical Industry and obtained MOL 
approval for the chamber to negotiate with the unions directly. 
This allowed the companies to negotiate with the unions collectively 
as opposed to independently.  Nelson Palacios, leader of the Union 
of Workers in the Chemical And Petrochemical Industries of 
Zrate/Campana, responded by calling strikes that began in May 
demanding higher wages and a return to negotiations by individual 
companies.  The companies managed to get government intervention in 
the strikes transferred from Buenos Aires Province's MOL to the 
national MOL.  Companies believed that this shift in purview would 
lead to a more effective response from national authorities. 
 
--------------------- 
Let the Strikes Begin 
--------------------- 
 
3. (SBU) The unions began with one-two hour strikes.  On June 10, 
Palacios organized a general strike that directly affected 15 
chemical companies, including four from the U.S.  The unions then 
expanded the strike to ten calendar days, citing an unsafe work 
environment as the cause.  The companies appealed to the MOL, asking 
the MOL to require the unions to come to the negotiating table.  The 
companies invited the MOL to tour plants to verify whether or not 
safety standards were being violated. 
 
4. (SBU) In response, Minister of Labor Tomada ordered the unions to 
submit to mandatory conciliation, and gave the Chamber and the 
unions until July 11 to reach a resolution. On Thursday, July 5, the 
companies submitted a proposal to 
Tomada's Chief of Staff offering a wage increase of 
15 percent, as opposed to the unions' demand of 16.5 percent.  The 
unions' counteroffer demanded that the 
companies pay workers' salaries during the 10-day strike. On Friday, 
July 6, the companies stated that they were willing to consider this 
offer, on the condition that the unions agree not to organize 
additional strikes.  Unsatisfied with this latest proposal, Palacios 
immediately called for another strike.  In response, Minister Tomada 
sent the unions a letter demanding that they return to the mandatory 
conciliation process or face the loss of their legal status as a 
union. 
 
---------------------- 
U.S. Companies at Risk 
---------------------- 
 
5. (SBU) The affected U.S. companies included Monsanto, Eastman 
Chemical, Merisant and Rohm and Haas.  The strikes negatively 
affected the production of agrochemicals, herbicides, fertilizers, 
foot and mouth disease vaccines, chemical inputs for the leather 
industry, sweeteners, and 
solvents for the paint industry.  Monsanto estimated that the strike 
resulted in a US$16 million loss. 
 
 
6. (SBU) In follow-up calls by the Mission to each U.S. company 
during the strike, all reported that the strikes had paralyzed their 
operations.  The worst case was that of Merisant.  A Union employee 
answered the office phone and explained that the plant had been 
"taken" by the workers.  This was confirmed by the General Manager 
in a separate call.  He stated that the situation was critical with 
some employees being fired and others having lost salaries due to 
days not worked.  The General Manager also stated that stock was 
being depleted, and soon there would be no products to export. 
 
7. (SBU) Eastman Chemical reported that picketers had blocked entry 
to the firm's gate and that a police escort was needed in order to 
enter their own facility every twelve hours to maintain their 
effluents plant.  Without routine entry, the bacteria needed to run 
the plant would die and require a major reconstruction effort.  Rohm 
& Hass reported a similar situation but explained that they had 
abstained from trying to cross the picket line, instead transferring 
essential personnel to their Buenos Aires location. 
 
------------------------------------------ 
Embassy Assists U.S. firms with Resolution 
------------------------------------------ 
 
8. (SBU) From the onset of the strike, the Ambassador, DCM, Labor 
Officer, FCS, and FAS advocated on behalf of U.S. companies with the 
Ministry of Labor in an attempt to reach a quick resolution. 
Embassy Officials received constant updates from company Executives 
(often by cell phone, as many were not allowed access to their 
plants).  The DCM coordinated routine calls with Minister Tomada for 
updates on the situation, to brief him on the daily activities of 
the U.S. companies involved, and offered constant Embassy assistance 
when needed. 
 
9. (SBU) On August 16, FCS learned from Eastman Chemical that the 15 
companies affected by the strikes had reached agreement with union 
officials late the previous evening.  He confirmed that the 
agreement resolved several issues that preceded the current 
conflict, as well as most issues arising from the conflict itself. 
For example, it was agreed to downplay the role of the Chemical 
Chamber in the collective bargaining.  There were also agreements 
reached on issues such as lost salaries, salary increases, and 
collective bargaining.  It was also stressed that a period of 
"social peace" was needed in order to recoup heavy losses, to build 
up depleted inventories, and resolve some of the down-stream damages 
generated by the strike.  Monsanto representative subsequently 
expressed to Ambassador his company's profound thanks for the 
consistent support through this period. 
 
----------------------------- 
Mission Also Assists Sheraton 
----------------------------- 
 
10. (SBU) During this dispute, the Embassy was also called to assist 
with a dispute involving Sheraton Hotel, which faced a blockade of 
its entrances by a taxi firm that wanted an exclusive contract to 
serve the hotel.   Diplomatic Security and Legatt both helped to 
contact Federal Authorities to ensure that Sheraton's hotel and 
guests were protected during the taxi protests, and the DCM was in 
constant contact with Sheraton executives offering assistance.  The 
Ambassador raised this issue with the Secretary of Tourism, twice to 
the Interior Minister about providing security to the hotel against 
egg throwing activities, urged the Labor Minister to help find a 
solution and thanked the Mayor of Buenos Aires for offering to help 
facilitate a solution.  The issue was resolved quickly.   The 
Sheraton's local owner and manager called on the Ambassador and 
country team to express their appreciation for the support. 
 
WAYNE