AmBev Manufacturing Excellence Program

Sowing discord and greed

One of the issues most frequently brought up by members of the Latin American Federation of InBev Workers (FELATRAIN) in the meetings is the Manufacturing Excellence Program (PEF) that AmBev has succeeded in imposing in its plants throughout the region. At the last meeting, held recently in Buenos Aires, Sirel took the opportunity to interview several participants to discuss this controversial matter.

The workers interviewed were Siderlei de Olivera, president of FELATRAIN and CONTAC, Brazil; Melquíades de Araújo, president of the Federation of Food Industry Workers of the State of Sao Paulo, Brazil; Roque Apecetche, president of the Union of Workers and Employees of Norteña (SOEN), Paysandú, Uruguay; and José Oxley, general secretary of SOEN, also from Uruguay.

Siderlei:

The Manufacturing Excellence Program (PEF) is a way of stimulating production and increasing corporate savings which is presented as a way to reward workers. If instead AmBev were to pay all of its workers who work so hard every day, it would be too expensive. So it allocates a certain amount of money (that divided among all the workers would give an insignificant amount for each) to the PEF, concentrating its application in a single plant and pitting it against the others. With a lot less money it achieves the same effect: it increases production and lowers costs in every plant. While the results of the competition are still not in, and nobody knows which plant will take the prize, everyone works like crazy, but only a few will be rewarded. It’s an “intelligent” way of getting everyone to work at their fullest.

Araújo:

The PEF has been implemented in AmBev for a long time now, and every year the number of plants that can participate is expanded. Right now its 21. The basis for the calculation is the company’s liquid profit which is recorded in documents that are public, what we don’t know is the methodology used for the calculations to arrive at the results. This justifies the constant pressure on workers to save on costs and how they are encouraged to compete. Until the middle of the year they create the illusion that the plant is doing well, and then they start presenting negative factors. And in the summer, when the peak season comes around, that’s when workers are really pushed to increase their productivity.

With the PEF, AmBev seeks to replace the Profit-Income Participation Program (PPLR) established by law, which does not have a predetermined value and instead must be negotiated in each company according to that company’s results. But the law requires that a committee be formed with the participation of workers and that the targets be clearly defined and discussed with the workers. In the case of the PEF, it’s a target stipulated unilaterally by the company. If an action were brought in the Ministry of Labor or another government body, AmBev would probably have to pay all the money it’s saved to date in its attempts to substitute the PEF for the PPLR. It also happens that according to law the companies that implement the PPLR are entitled to deduct almost 30 percent of their tax obligations. That means that if a ruling were issued against AmBev, it will also have to pay the tax authorities for all past deductions.

Siderlei:

Another problem is that some of the Collective Bargaining Agreements signed by the workers, accepted the PEF as if it were the PPLR, and therefore AmBev maintains that it is complying with the Profit-Income Participation Program. AmBev is operating outside legal regulations because it twists the law, using it to install this perverse system of competition, that sometimes even leads one worker to report a fellow worker for low productivity.

Araújo:

What we’re discussing now is that all the unions that achieved their demand to have the PEF eliminated from their agreements form a committee to discuss the possibility that the PEF only be assimilated to the PPLR if all the targets are discussed with the workers and all the plants that reach these targets, independently of how many they are, are benefited with the extra bonus.

But that PEF bonus also has a negative factor, because as soon as the company acquires other plants the acquisitions are entered as a debit in its accounting, reducing the profit and the part that corresponds to the workers. In the past, this portion of the profits was as high as ten salaries, but in 2007 it didn’t even amount to five, because of all the company acquisitions.

Oxley:

Right from the beginning our trade union saw the PEF system as a clear attack on our right to unionize and we rejected it straight out, in the understanding that we are not willing to take part in company projects that are not discussed beforehand with the union. This system undermines labor unity and is part of a profoundly antiunion policy of the company. What we see as very positive is that in all the companies where this policy has been applied, the unions are trying to coordinate actions to deal with it successfully.

The PEF is very dangerous for the labor movement, and in Uruguay it’s done a great deal of harm, because by pitting units against each other, it obviously brings out the worst in human beings, which is greed. We end up reporting our fellow workers if they don’t reach the targets set by the company. Targets are not agreed with the union and are instead imposed on the workers.

Araújo:

Once the plant reaches the target and wins the prize, the union can’t criticize the PEF because workers won’t go for it. When the plant doesn’t win, the opposite happens. Which is why it’s a complex weapon. We have units that have won the price four or five times already, and those units don’t want to hear about abandoning the system. But then there are several units that have never won it, and those are the units that want to eliminate it.

Apecetche:

Also, this methodology is totally unfair because it does not reward all the members of a plant equally, as there is an internal regulation that prevents many workers from accessing this prize, even if they have contributed substantially with their efforts to reach the production targets. For example, workers that have missed work for more than 90 days in the year, even if it’s due to an accident or an illness, don’t receive any part of the prize, and neither do outsourced workers even if they work the same or more than other workers.

This is why we say that if we want to be consistent when we defend unity and solidarity among workers, we can’t accept a system that discriminates for reasons that are unacceptable. And these are just a few examples, but there are many other injustices. Which is why we say that if a reward system is proposed, we need to be involved in the definition of the system’s criteria, because we have our own set of criteria which we’ve been applying for a long time, we’ve proven that these criteria work; whether it be a reward in money or in kind, we have experience in establishing indexes that harmonize a situation towards a just distribution.

Araújo:

We succeeded in halting the PEF when in the negotiations of one of the AmBev units we demanded that, apart from the classification in the general list, if the company reached a total of 400 points of the target, it would receive 40 percent of the first prize. This agreement, which was achieved in the Jaguariúna plant, is now being replicated in all the other plants in the country. This brings some justice to the distribution, but in no way does it replace the PPLR established by law.

Moreover, the companies have a system for overseeing the results declared in the plants, but workers are not included in it. The information for each plant is handled exclusively by management, and we’re merely notified.

Apecetche:

Like Araújo says, managers often change results, because they have their own prize pool, in addition to the general one. It’s common for workers to be called to meetings which are never held, and then are used to justify information that’s false and that managers invent to position themselves better in the competition. The system is unilateral: they set the standards and they can change them over the course of the year; that is, if the plant is on schedule with the targets, the company will suddenly readjust the indicators and nobody can say anything about it. What agreement can you have under these conditions? They call that “raising the stakes.” And it’s all really just a big lie, the real goal is to make workers compete against each other.