Are we in a bad way, but are we doing well?

The long list of companies that closed, suspended operations or laid off in the last year

Fresenius Medical Care, Xerox, Clorox, Prudential, Procter & Gamble, Nutrien, ENAP and HSBC, Dánica, Chango Más, Diarco, Copetín Gonzalo, Granja Tres Arroyos, AVON, NRG Argentina, Fabrisur, Whirlpool, Textilcom, AlpaCladd, General Motors, Acindar, Bridgestone, among many others.

More than 2,300 companies closed their doors, while others reduced their production or implemented mass layoffs. From multinationals to SMEs, the impact of the recession affects thousands of workers.

The industry suffered a sharp decline this year and that was evidenced in company closures and mass layoffs.

In the last year, Argentina experienced a notable outflow of multinational companies and a series of closures, production suspensions and layoffs in various industries, reflecting the complex economic situation that the country is going through.

The data are conclusive, according to a report by the Confederation of Industrial Unions of the Argentine Republic (Csira), between November 2023 and August 2024, 38,532 jobs were lost in the industry. If the construction and mining sectors are included, the figure rises to 126,050 jobs lost.

In addition, in the same period, 879 companies closed in the manufacturing industry, and 2,333 if mining and construction are also considered. The situation has led 86.6% of the unions surveyed to consider that activity has worsened since Javier Milei came to power, reflecting a climate of growing concern in the workplace.

The labor outlook was also strongly affected, with 60% of industrial unions reporting layoffs in the last quarter and a third of them pointing to difficulties on the part of companies to pay wages. In addition, 82% of the unions surveyed indicated cuts in overtime, and 72% mentioned suspensions, leaves and early vacations for a percentage of workers.

In this context, in the last year, at least eight multinationals stopped operating in Argentina, including HSBC, Xerox, Clorox, Prudential, Nutrien, ENAP, Fresenius Medical Care and Procter & Gamble.

The truth is that the crisis reached all industries equally and many companies chose to stop their production and/or execute layoffs to stay afloat.

An emblematic case was that of Acindar, the steel company, a subsidiary of ArcelorMitta, suspended production at all its plants for a month in March 2024, due to an abrupt drop in demand. Subsequently, in June 2024, it announced a three-week suspension at its plant in Villa Constitución, Santa Fe, and a reduction of its annual production from 1.2 million tons in 2023 to 600,000 tons in 2024.

More recently, the company announced an "untimely" advance of the stops they had scheduled for the end of the year, "due to the sharp drop in sales," according to the union. This stoppage of activities affects more than 700 workers.

In the same vein, Ferrum, the leading company in the manufacture of toilets, paralyzed its plants and carried out layoffs and suspensions of workers in the first half of 2024, in response to the decrease in activity in the construction sector.

Meanwhile, Textilcom and AlpaCladd, textile companies, which produce for brands such as Cheeky, Mimo, Yagmour and Penguin, laid off 300 workers in May in the provinces of Catamarca and La Rioja, due to falling demand and financial difficulties.

The fall in consumption also affects the appliances or white goods sector, which in turn is being unprotected by the reduction of tariffs on the import of refrigerators and washing machines. This led to layoffs at Whirlpool and Briket, among others. In the first, there were 60 layoffs in the company due to production reduction at its plant in the Pilar Industrial Park, in the province of Buenos Aires, in May of this year. In Briket, located in the south of Rosario, the company – which produces refrigerators, displays and freezers – has laid off 300 workers so far this year.

The list goes on and just to mention two cases, General Motors, made 33 layoffs and agreed to 167 voluntary retirements, within the framework of a reduction in production projection. For its part, Bridgestone, the tire company located in Lomas de Zamora, Buenos Aires province, laid off 35 workers in February 2024, citing a drop in demand.

In the retail segment, the ChangoMás supermarket chain laid off around 200 employees in the province of Buenos Aires in May of this year, as part of an operational restructuring.

Later in time, the firm Dánica announced the closure of its plant located in the town of Lavallol, province of Buenos Aires. The decision, taken by the Beltrán Group, owner of the company since 2018, is part of the company's decrease in demand and economic problems. The measure would leave 150 workers unemployed.

Another historic company that this year declared bankruptcy and fired all its workers is the Mendoza-based Copetín Gonzalo, the firm with 30 years of experience closed its doors definitively in the Milei era.

Also in the food sector, companies such as Granja Tres Arroyos, Bimbo and Pepsico, among many others, this year advanced with dozens of layoffs in their different production plants. In all cases, the fall in demand and the high costs of production and labor were the main causes of the decision.

The reality is that job losses and business closures not only affect the workers directly involved, but also local economies and the value chains of various industries. In this context, for the time being, the projections of job creation for 2025 do not seem to be very encouraging.

González Olguín: "There was a profound economic and social deterioration in a very short time"

  The economist and professor at the National University of Córdoba analyzed the results of the economic policy applied by Milei's government one year into his administration.

Economist Eduardo González Olguín said that the government of Javier Milei caused "a deep economic and social deterioration" in just one year.

"I think that with all objectivity it can be affirmed that Milei's economic policy has caused in a very short time a profound economic and social deterioration in Argentina. That can be synthesized in some indicators," said the professor of the National University of Córdoba (UNC), about the result of the economic policy applied in the last 12 months.

Among the most alarming data, González Olguín highlighted "a 3.8% drop in the Gross Domestic Product (GDP) compared to the previous year, according to the International Monetary Fund";the loss of 16% in real wages";the elimination of 261 thousand registered jobs, not counting the informal jobs affected"; "the increase in unemployment that went from 5.7% to 7.6%" or "the closure of 16 thousand SMEs and a drop in sales of small and medium-sized companies of 13.2%".

In addition, he stated that the purchasing power of workers and retirees also fell. "Pensions, which in November 2023 covered half of the basic basket of the elderly, today only reach a third."

On the other hand, he commented that "poverty went from 41.7% at the end of last year to 55% in the second half of this year, while indigence increased from 11.9% to 15.8%."

He also mentioned that meat consumption reached the lowest level in 26 years and that investment suffered the largest drop since 2004, with a decline of 35%, only comparable to the most critical years of the pandemic. For González Olguín, these figures show "a strong retraction of demand".

Brazil's central bank raises benchmark interest rate to 12.25 pct

BRASILIA, -- The Monetary Policy Committee (Copom) of Brazil's central bank decided on Wednesday to increase the benchmark Selic interest rate from 11.25 percent to 12.25 percent, the second-highest since November 2023, when it stood at 12.75 percent.

In response to an adverse economic scenario complicating the convergence of inflation toward the target, additional adjustments of the same magnitude are expected in the next two meetings, potentially raising the Selic rate to 14.25 percent annually, according to Copom's statement.

"The total magnitude of the monetary tightening cycle will be determined by the firm commitment to inflation convergence toward the target and will depend on the evolution of inflation dynamics, particularly the components most sensitive to economic activity and monetary policy," the statement said.

The interest rate increase aims to curb inflationary pressures, as the Consumer Price Index may exceed the upper limit of the official target range, set at 3 percent with a tolerance of 1.5 percentage points. Analysts project inflation at 4.84 percent for this year.

This decision marks the largest Selic rate hike under the administration of Luiz Inacio Lula da Silva and the most significant increase since February 2022, when a 1.5-percentage-point hike was implemented. All nine Copom members voted unanimously for the adjustment.

Wednesday's meeting was the last led by Roberto Campos Neto, who will step down as central bank president in January 2025. He will be succeeded by Gabriel Galipolo, the current director of monetary policy at the Central Bank, who was appointed by Lula and approved by the Senate in October. 

Opposition vows to build a democratic and pluralistic Syria after the fall of al-Assad's government

DAMASCUS, Syria (AP) — The Syrian National Coalition, one of Syria's main oppositions, vowed Sunday to continue working to transfer authority to a transitional governing body with full executive powers, to usher in a free, democratic and pluralistic Syria.

In a statement to the international community, the coalition emphasized its commitment to ensuring stability and security in neighboring countries and stressed that Syrians will refrain from interfering in the affairs of regional states.

The coalition said it hoped to forge strategic alliances with countries in the region and around the world to rebuild Syria for all its citizens, regardless of ethnicity, religion or sect. The group reiterated its vision of a nation founded on equality and democratic principles, laying the foundation for a peaceful and inclusive future.

In recent days, Damascus has become a focal point of rapid developments, marking a critical turning point in Syria's protracted civil conflict. The Syrian capital, which for years remained under the tight control of President Bashar al-Assad's government, experienced a sudden and dramatic change in power on Sunday following major rebel advances in the country.

Beginning in late November, armed opposition groups made significant gains in northern provinces such as Aleppo, where the Hayat Tahrir al-Sham rebel group spearheaded a major offensive against government forces. With the rebels' advance, reports emerged of rapid army withdrawals from major southern provinces, including Quneitra, Daraa, and Sweida.

Inside the capital, these developments sparked public anxiety, and many residents were unsure of what would come next. They rushed to get basic necessities, such as bread and rice.

After opposition forces seized control of Damascus, the Russian Foreign Ministry confirmed in a statement on Sunday that al-Assad has left Syria and resigned as the country's president, who, in the meantime, called for a peaceful transfer of power.

Local factions and international observers are closely monitoring the situation in Syria, concerned about the stability of diplomatic missions and the potential for violence in the Syrian capital following incidents such as the assault on the Iranian embassy.

Iranian Foreign Ministry spokesman Esmaeil Baghaei on Sunday condemned the attack, while noting that Iran's ambassador to Syria and embassy staff were in full health.

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