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U.S. Union Fights Takeover of Bankrupt Varig Assets in Brazil

The United Steelworkers (USW) today said that the Union is cooperating with the CUT (Central Àšnica dos Trabalhadores, Workers’ Unified Central) of Brazil and sharing information about the anti-worker practices of US-based investment fund MatlinPatterson.

The American workers’s union calls MatlinPatterson a “vulture” fund that is awaiting permission from a Brazilian bankruptcy court to purchase a subsidiary of the Brazilian airline Varig.


“Thanks to MatlinPatterson, thousands of our members have been forced into the street or robbed of their health insurance and pension benefits,” said David McCall, Director of USW District 1. “We do not believe our sisters and brothers in Brazil will fare any better if MatlinPatterson has its way.”


In June, Varig filed for bankruptcy protection in both Brazilian and US courts. Late last month, the company announced the sale of its cargo subsidiary, VarigLog, to MatlinPatterson for a reported US$ 38 million. The sale must be approved by a bankruptcy court in Rio de Janeiro before it becomes official.


The USW is sharing information with the CUT about the harm MatlinPatterson has inflicted on workers at Ormet Corporation and Huntsman Corporation, two US-based companies that fell into the hands of MatlinPatterson after both companies faced financial problems. The fund specializes in distressed investing situations and still holds a controlling interest in both Ormet and Huntsman.


Led by co-founders David Matlin and Mark Patterson, MatlinPatterson has raised nearly US$ 4 billion since spinning out of Credit Suisse First Boston in 2002.


At Ormet, about 1,300 workers have been on strike against unfair labor practices since November 2004 at two aluminum mills in Hannibal, Ohio. At Huntsman, hundreds of workers have suffered layoffs, job combinations and cuts to health insurance and pensions since MatlinPatterson took over.


McCall said that the USW is considering further steps it can take to support Varig workers, including sending a delegation of USW members affected by MatlinPatterson’s investment and management practices to Brazil and other expressions of international solidarity.


“Too many jobs have been sacrificed already for the greed of David Matlin, Mark Patterson and their partners,” McCall said. “Our Union will not rest until MatlinPatterson gets the message that we will not back down or go away.”


United Steelworkers – www.steelworkers-usw.org

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