Community proposes cooperative alternative to factory closure

Far from taking the closure of the Heinz tomato factory sitting down, workers and community members from the 150-strong rural Victorian town of Girgarre are getting organised.

After the announcement by Heinz last year that it would shut down its operations in Girgarre, 200 kilometres north of Melbourne, more than 300 people met there in August and formed the Goulburn Valley Food Cooperative (GVFC).

The focus of this cooperative is to place the factory in community hands. Under the new, cooperative labour arrangement, all profits would be reinvested into the cooperative and the community.

A key focus of the enterprise would be to build new relationships between suppliers, producers and consumers that ensure everyone benefits. Factory production would be geared to meet people's needs, not profits.

Rex Thorley, who was elected to the cooperative committee, explained at the meeting that the first aim of the groups was “to work with Heinz so that the factory is handed back to the community (archived by Internet Archive 25/07/2012). This will protect jobs, community viability and all the farmers.”

The GVFC’s aims include providing (archived by Internet Archive 25/07/2012) “farmers with fair prices for their product and guaranteed demand”.

The GVFC also says it “will be for social profit only. No individual will benefit other than through agreed wages or salary.” Fifty percent of all profits will be reinvested in the company and 50% will go to the community.

Cooperative interim chair Les Cameron told the August 15 (archived by Internet Archive 15/08/2011) Australian: “We’re not looking for a profit arrangement. We assume it’s got to make a surplus but that has got to be turned back into new equipment and greater skill for workers and better pay for farmers.”

It would not just be farmers that would benefit, but also consumers. The GVFC is seeking to create “paddock to plate systems” of distribution. The aim is to develop “an innovative way to get quality food to the highest possible number of people” (archived by Internet Archive 25/07/2012).

However, the responses from Heinz and the government have been less than enthusiastic.

Heinz management has ruled out (archive by Internet Archive 20/08/2011) selling the factory to the cooperative at an affordable price and has begun dismantling the existing equipment, leaving behind what the cooperative has called a “bashed-up shell”.

Rather than step in on the side of GVFC, the state and federal governments have done little other than offer empty words of support.

Yet the arguments for government intervention are solid.

Heinz claimed in an official response to GVFC that it had contributed to the community by providing jobs and buying produce from farmers. But it said the time had come to “acquit our business obligations” by selling the site and taking the equipment elsewhere.

Yet, as Cameron noted in a February 28 letter to Heinz management, the enterprise was not the result of the good-natured intentions of Heinz management but rather the collective efforts of many. Heinz, however, has been the exclusive beneficiary.

Cameron said: “Heinz purchased this land about 20 years ago from the Shire of Deakin at a price that was very low by that day’s standards.”

He said: “Heinz received a number of incentives from the Australian taxpayer both at buying time and since then.”

Another factor, Cameron said, is that, “Heinz has had direct financial support from local farmers in purchasing equipment which you are now selling or giving to other factories”.

Finally, Cameron pointed out: “The group of people who helped you make this the most profitable plant in the world at one stage” are now the ones that will be hit hardest, as “up to 1000 people who have been directly or indirectly affected by this closure may be forced to leave the area”.

In its response to Cameron, Heinz management said the company had “contributed a great deal to our former employees and the wider community”. But in truth, the very existence of the factory has been the collective result of the social efforts of the community and workers.

In fact, this is true for every capitalist enterprise. Without the labour of past and current generations that design the infrastructure, develop the technology, build the installations and make enterprise run these capitalist firms would not exist.

The myth that everything around us is the result of capitalists investing their “hard-earned money” is simply a smokescreen to hide the fact that their wealth is skimmed from the wealth created by society.

In this scenario, most of society has little other option but to work for them to fulfil their basic needs.

If the government was to intervene — as it should — and place the factory and machinery in the hands of the GVFC, it would show that a different type of economy was possible: one based on social ownership, cooperative labour and production for social needs.

Perhaps this explains why Heinz and the pro-corporate state and federal governments have refused to do just that.