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The cost left by the stagnation and decay of industrial activity in Brazil is not superficial: a trail of social and economic disintegration

This week Ford announced the closure of its last factories in Brazil, ending a period of 101 years of activity in the country's manufacturing sector. The company, by spreading across the globe during the 1920s several automobile assembly plants, was the forerunner of a strategy of expansion in the world market that would be reproduced among the great American, European and Japanese industries in the post-1945 period.

This process sought to replicate on a global scale the success of the organization of assembly plants throughout the United States. In addition to reducing transport costs – 26 disassembled cars occupied the same space as seven or eight assembled vehicles –, assembly plants around the globe could also take advantage of greater proximity to consumer markets, as well as circumvent customs restrictions, speculate with the exchange rate and often combine the introduction of modern production processes with the availability of a much cheaper and less organized workforce. Although at this stage the presence of the automaker did not produce the so-called “nationalization of components”, that is, it stimulated the emergence of auxiliary industries, such as auto parts, one should not overlook the economic weight that assembly had, since, at that time, around 25% of the vehicle's value came from this process.

In 1921, Ford inaugurated its factory on Rua Solon in the Bom Retiro neighborhood of São Paulo. The building was designed by Albert Kahn, architect of the Highland Park factory in Detroit, where, in 1913, for the first time in history, an automobile was produced on an assembly line. Construction, with its conveyor belt, was the most modern thing in relation to the new forms of work organization that spread from the automobile industry. Strategically located on the banks of the Santos-Jundiaí railroad, the factory received disassembled cars manufactured in the Rio Rouge workshops in Detroit by train.

Such was the volume of exports to the branches in South America that the company put into operation in 1924 the SS Onondaga, an 80-meter-long, 3.800-tonne steamship, with the capacity to transport 1.500 cars, 150 tractors and thousands of parts for assembly, to supply its assembly plants in the region. In 1925, when Ford reached the unprecedented mark of 136 units assembled in its foreign branches – excluding Canada -, the Solon Street factory was responsible for a far from negligible 12% of this total.

The installation of Ford branches around the world, especially in peripheral exporting economies – in addition to São Paulo, during the 1920s, Ford began to assemble cars in Buenos Aires (the third largest factory abroad), Mexico City, Santiago de Chile and Istanbul -, obeyed both the limits imposed by the US internal market on the possibilities of profits for large companies in that country, as well as the boom in commodities that followed the recovery of the world economy after the First World War. If in 1925, the Solon Street factory reached a record in the number of motor vehicles assembled, foreign exchange earnings from coffee exports also reached their historic maximum, reaching 74 million pounds sterling…

The closure of Ford's manufacturing activities in Brazil is not the result of the country's de-industrialization, but of the fact that Brazil has never industrialized. The growth of Brazilian industry was made possible and pursued while the agricultural-mining export complex admitted and the mechanisms of technological dependence allowed multinational groups to capture part of the surplus produced by the primary sector. That is, currently, the large economic groups that control the Brazilian economy do not have the slightest intention of capitalizing their income in industry, nor do multinationals see industrial production in Brazil as a way to capture the surpluses produced by our fundamentally export-oriented economy.

Such a national industry was never anything other than foam. As a project, it was defeated. Its character as a secondary and accessory activity remained, serving only as a way of adjusting the imbalances in the external accounts caused by the more or less structural fluctuations of the commodity cycles. From the domestic point of view, it is noteworthy how the Brazilian industrial growth between 1950 and 1980 marked the transition from coffee to soy. The Technological Revolution and the reorganization of the international division of labor from 1973 onwards, especially the industrialization of East Asia, made it possible, with the income obtained through exports, to supply the consumption of the upper classes of Brazil again with products from overseas. .

The economic diversification that had supported the primary export sector after 1930 became obsolete, as well as the entire legal and political superstructure and the corresponding forms of social conscience – see the dismantling of Social Security, the Labor Legislation, but, above all, the dismantling of and the near disappearance of the factory proletariat. It is not by chance that an elitist liberalism has returned to fashion, spiced up and revamped by the radical social Darwinism of Pinochet neoliberalism.

The cost that the stagnation and decay of industrial activity in Brazil leave behind, however, is not superficial: a trail of social and economic disintegration, throwing even more water in the mill of the precariousness of the life of the Brazilian population. As a consequence, violence against the inorganic, mostly trapped in the peripheries, corresponds to the transformation of the Canudos and Contestado massacres into everyday, ordinary and preventive politics. It is not a question here of repetition as a tragedy, but of the long duration of our colonial night.

*Fernando Sarti Ferreira he holds a doctorate in economic history from USP.

Originally published on Bulletin of GMARX-USP.

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