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					Camou/Maubrigades         National overview Uruguay, Textile conference, 11-13 Nov. 2004

                       The evolution of Uruguayan textile industry


                             Mg. María Magdalena Camou
                               (mcamou@fcsum.edu.uy)
                               Mg. Silvana Maubrigades
                                (silvana@fcsum.edu.uy)
                        Programa de Historia Económica y Social
                             Facultad de Ciencias Sociales


Abstract
This paper describes the path followed by the Uruguayan textile industry since its
beginnings in early twentieth century up to the present time. The main stages undergone by
the sector are followed here, taking into account the changes in the production process and
in labour occupation. Uruguayan textile industry had a late development in relation with the
region, but, as it has been one of the main productive branches from its rise up to the
present, with a remarkable performance in the domestic market as well as in the country’s
total exports. It was developed in factories with great concentration of labour, mainly
female, which favoured an important union presence. The Uruguayan State played an
important role in its performance both by its protectionist policies towards this sector and
for its participation in labour market regulation.


Textile production

A long term view
The study of manufacturing industry evolution has little precedents before 1929. Research
carried out by the end of the nineties have allowed to assess the evolution of industry in
general and by sector for the first half of the twentieth century.
        Until 1930 the food industry made up nearly 50% of manufacturing industry value
added. Within food industry the most important was meat industry, the country's main
export product. Second came beverage and textile industries, which had risen and expanded
by the end of the nineteenth and the beginning of the twentieth century. Textile industry,
experienced a late uprising as well as moderate growth compared to the other branches until
the end of the First World War. By the early twenties, it had a major boost, thus becoming
the second branch in manufacturing industry value added share. By then, the Uruguayan
industry, based on the export of agricultural products, kept, although if with fluctuations, a
dynamism which allowed a relative improvement in living standards and population
growth, mainly fed by immigration flows. The industry was still weak but import
substitution grew.




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Camou/Maubrigades                       National overview Uruguay, Textile conference, 11-13 Nov. 2004




Figure 1

                        Textile industry value added share in manufacturing sector,
                                                 1900-1955
                   16
                   14
                   12
     percentages




                   10
                    8
                    6
                    4
                    2
                    0
                        1900
                               1904
                                      1908
                                             1912
                                                    1916
                                                           1920
                                                                  1924
                                                                         1928
                                                                                1932
                                                                                       1936
                                                                                              1940
                                                                                                     1944
                                                                                                            1948
                                                                                                                   1952
                                                           Textile industry value added
  Source: Bertino and H.Tajam El PBI del Uruguay, 1900-1955.(Montevideo 1991), p. 67

Textile industry includes the wool sector, which works with domestic raw material and the
cotton sector relying on imported raw material. Both industries imported the rest of the
production inputs as well as capital goods. The 1929 crisis deeply affected the industry as a
whole. Particularly the textile industry was hit, due to import reduction, as a consequence
of the fall of exchange rates, shrinking of the domestic market, the main destination of
textile production. The textile industry recovered by the mid-thirties and continued its
expansion process, enlarging its relative weight in manufacturing industry as a whole
during all the industrialization period for import substitution. In the early fifties, the relative
importance of the textile branch stagnated.
        Due to the crisis of the import substitution model, by the mid fifties, Uruguayan
manufacturing industry faced a persistent stagnation. The crisis was triggered by the
decrease in export income as a consequence of a fall of exchange rates. This mainly
affected the textile industry, which suffered a reduction in state protection margins. The
branch started to decline compared to other industrial branches. In a context of low
dynamic domestic and foreign demand, protection weakness and the increase of domestic
prices for raw materials, the branch also lost competitiveness on foreign markets. The
industry's competitiveness relied on the low costs of its raw materials, and when this factor
disappeared the restrictions to technology access and high production costs made most of
the industry unattractive. On world scale, the textile industry underwent a relocation
process after Second World War, by concentrating in lower income and lower wage
countries. The result was that the greater the per capita income of a country was, the
smaller the relative weight of textile sector in manufacturing industry became.




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Camou/Maubrigades         National overview Uruguay, Textile conference, 11-13 Nov. 2004



Table 1
Textile industry share in manufacturing industry

period                                %
1960-1971                           14.1
1972-1976                           12.1
1977-1980                            8.7
1981-1982                            6.5
Source: L. Sierra and R. Irigoyen, Uruguay: competitividad externa del complejo textil
lanero (Montevideo,1986), p. 84.

In the seventies the branch boosted, growing at a rate of 50% over the rest of the industry.
The textile sector grew in an absolute sense, but its relative weight in manufacturing
industry value added decreased, because of the high incidence of wages in the branch's
value added. Wages fell drastically during the term of military dictatorship and union
dissolution. Nevertheless, the weight of the Uruguayan textile industry still continued to be
very important in the eighties, occupying the third place in value added. As from 1981-82,
recession hit the textile industry harder than any other industrial sector.

Background
With European industrial development in the nineteenth century, the demand for fibers for
thetextile industry grew, thus energizing wool production in peripheral countries. To this
demand the interruption in cotton production in the United States during the Civil War in
the 1860s was added. After that period, when the United States returned to the commodities
market, the rest of primary supplying countries had to face an overproduction crisis and a
lack of markets to place it. In this framework, in Uruguay, private interests started to rise
claiming to create a domestic textile industry capable of processing the raw material
produced here.
        In the 1870s, passion was aroused during the debate on the need to industrialize the
abundant wool production of Uruguay, exported mostly dirty, to Europe. This production
came to Uruguay with some delay in relation with the rest of the South Cone of Latin
America. Wool refining only started to be processed in the sixties, as a response to
international demand. Previously some handicrafts and individual enterprises, like for
example a family workshop for wool knitting founded in 1837, with European immigrant
capital, that had a short existence because of civil wars in the rural environment, frustrated
all attempts towards an intensive sheep breeding. Other attempts tried to produce on the
basis of imported raw material, or other commodities such as silk. All those enterprises
were also frustrated by barriers set by the government who profited on taxes on textile
imports.

Early textile industry
In 1897 under the cover of protectionist laws, this idea was materialized by the settlement
of the textile factory "La Victoria" owned by Lorenzo and José Salvo. With the settlement
of the first wool knitting factories, and the boost that the settlement of the first spinning
mill in 1905 gave to the sector, textile industry had a sustained production growth at an
annual rate of 39% between 1900 and 1913. This growth was reflected also in workers’


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Camou/Maubrigades        National overview Uruguay, Textile conference, 11-13 Nov. 2004

incorporation in the sector, having a total of 1408 workers, 6% of the manufacturing
industry as a whole.
        During the First World War and the following post-war, in spite of the problems on
capital goods supply, this branch had a great impulse. European production stopped for the
war provoked an important export market for the country's textile products, which supplied
countries not only in America but also in Europe. Additionally the domestic market became
more important in this period with an early substitution of textiles that came mainly from
Europe.
        The second half of the twenties was a conflictive stage for the textile industry.
Europe in peace and having reconverted its industry went after the recovery of its previous
market, thus putting pressure on Uruguay’s local market. In this context, woollen and
cashmere cloths that amounted to 769,424 kilograms in the period 1915 - 1920, rose to
1,108,165 kilograms in the period 1921 - 1925. In addition, Uruguay’s early social laws on
the working day, wages and workers’ insurance caused high labour costs compared to the
European Continent.1 The cost of labour was above Italian or German workers’ wages, with
a cost of living higher than the European and a working week of 48 hours. At the same time
the costs of buildings and machinery were 40% higher and credit scarce.
        By the second half of the thirties, textile industry reached its most important
development. In 1930 the textile sector had 212 shops in a total of 6,570 for the whole
manufacturing industry, employed 5% of industrial workers and generated 4.3% of
manufacturing value added. The percentage of value added by the textile branch to raw
materials was by that time of 45%. Import substitution of wool textile products became an
alternative market for wool producers. In the period 1929-1933 five million kilograms of
washed wool was processed, and between 1934 and 1938 this number jumped to more than
twenty million. The main buyers of textile products were Belgium (36% of the total)
Germany (24%) and Italy (20%).2

The process of import substitution
The quarter century between 1930 and 1955 had as main feature the high dynamism shown
by the domestic industry in the framework of the so-called process of import substitution,
as opposed to the previous term leaded by exports. Within this period of continued growth
of the textile industry, three intervals should be emphasized: a first period that passed
between the 1930-1938 world crisis, the second period from the first years of the Second
World War and the immediate post-war, and the last one, the beginning of the crisis of the
sector up to 1955.
         In the first period, dominated by difficulties in raw material supply, several
economic measures were taken in order to mitigate the effects of the crisis and to protect
domestic industry. The annual manufacturing growth, in those years, was around 2%,
textile industry on its side showed an exceptional expansion, with a cumulative annual rate
of 17.3% and the industrial product share doubled, regarding to the share registered in
1930. Within the textile sector, wool was the main sub-branch due to the comparative
advantages granted by the local production of raw material. Cotton industry, with no
spinning mills, was devoted to the production of fabrics made with imported threads during
this term, showing a much slower growth rhythm. It should be pointed out that even if
much of the production was intended for the domestic market, industrial exports also grew,
reaching 4% by 1930 and up to 20% in 1938. To the good performance of textile branch
during said period it may be added that many new enterprises were settled, like S.A. Fabril


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Camou/Maubrigades        National overview Uruguay, Textile conference, 11-13 Nov. 2004

Uruguaya in 1930, linked to the cotton industry, Textil Uruguaya S.A. in 1932, cotton
manufacturer, and in 1933 ILDU, a wool manufacturer.
        As for workers, in 1936 Campomar y Soulas, the country's biggest textile enterprise,
had 2000 workers in their group of plants and the second textile industry was "La Aurora"
owned by Martinez Reina who employed 522 workers. The sector as a whole, had a total of
24 textile factories with more than fifty labourers, with a total of 4,664 employed workers.
Since hundred textile factories were counted and 5,835 workers appear in the Industrial
Census of the same year, we know that 24% of the factories occupied 80% of the workers.
        The second period to be highlighted is the Second World War time and the
immediate post-war, in which manufacturing production slowed down showing an annual
cumulative growth of 2.2%, due both to war outbreak problems and the domestic economic
situation. To the protectionism already enjoyed by domestic industry the one resulting from
the military conflict was added. In this context and after having overcome supply problems
of the beginning of the war (inputs, raw materials, machinery, spare parts), the most
important expansion in textile history took place, with a growth rate in those years which
doubled the whole of the manufacturing industry. The major change experienced by the
sector was the sale in the foreign market of washed wool, threads, fabrics, and on a smaller
scale, tops,3 as well as large scale substitution of cotton fabrics, that up to that moment,
were, almost all, imported. Production for sale grew between 1936 and 1948 at an annual
cumulative rate of 14% with important investments in machinery (19% annual increase)
that exceeded labour growth (8%).
        Cotton textiles, even if with a later development than the wool sector, showed a
greater growth rhythm in the years between 1936 and 1948, with an annual cumulative rate
of 21%. This was the period of greater of imports substitution in the cotton branch, mainly
for ordinary products, yarns, and carded fabrics. A strong investment in machinery (26%
annually) was made, mostly explained by the rise of new weaving and spinning mills.
        Last, the period from 1947 to 1955 showed the largest growth in domestic
manufacturing industry, with an annual growth rate of 6.3% supported by the implementing
of a redistributive income policy and ample possibilities of import supply. Textile industry
kept an annual growth of 6.4%, characterized by an increase of 35% in number of factories,
60% of occupied personnel and 75% gross value of production.
        Market liberalization promoted after the war provoked an increase in competence
for the sector supplier to the domestic market, as more imported fabrics were sold in the
market, between 1944/46 and 1947/494 they doubled. This situation went back in 1951 with
a new protectionist boost, partly fostered by a devaluation of the Uruguayan currency with
relation to the pound, thus favouring the cotton as well as the non-export wool sector. The
export wool sector, once protection to exports was re-established in 1947, showed a steady
growth between 1949 and 1953. The main item was tops, supported by a differential
exchange rate set in 1949, which in five years term achieved a production multiplied by 22.

The crisis of the textile sector and its transformations
The period between 1955 and 1971 showed stagnation in industrial production as a whole,
with an annual growth rate of 1%. Textile industry, which used to lead the manufacturing
development in previous times, now registered a negative annual growth rate of nearly 2%.
In spite of this fall, it continued to be important within the manufacturing industry as a
whole, occupying the third place after Food and Beverages. The main cause of this
downfall may be found in the stagnation of wool production after the second half of the


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Camou/Maubrigades         National overview Uruguay, Textile conference, 11-13 Nov. 2004

fifties and its later descent along the following decade. If in the period 1950-1955 wool
exports amounted to 78,000 tons, in the following five years they only reached 64,000. But,
under the protection of export refunding policies applied since the mid-sixties, major
changes took place in the structure of said textile exports, favouring the participation of
those with a higher degree of industrialization. Thus the relative importance of tops and
woven and threads among the total volume of wool exports, going from nearly 22% in
1950/1959 up to 36% in 1970. This behaviour is erratic in the long term, for policies in
support of exports were not sustained. This was even more so by the end of the eighties
when policy was abandoned and a reduction in tariffs for the textile sector was applied
together with an openness process assumed by the economic model in force.
         Textile production was one of the leading branches of industrial development in the
seventies, showing a growth 50% above the manufacturing industry as a whole. Until 1976
it continued to have a sustained expansion rhythm (3.2% annual), relying mainly on tops
production. The following stage also showed growth but based mainly on wool and cotton
spinning and weaving, with an annual growth of 18% and 9% respectively. In spite of this
rapid economic growth, textile production lost representation in manufacturing production
as a consequence of the fall in added value compared to the rest of the industry. This fact is
explained by the intensive use of labour made by this sector and the relative decline in
wages in those years. Besides, there was a 26% descent in the number of working posts
between 1968 and 1978.
         By the mid-eighties, the textile branch was still in third place (9%) in the
manufacturing industry as a whole, now behind Food (20%) and Oil by-products (14%).
This is explained on one side, by the high share of gross value of textile production in the
whole of the gross value of industry production, more than 6%. But, besides, because of an
incorporation of textile industry added value per product unit (50%) above the average in
manufacturing industry (43%). In those years, an important technological renewal took
place, at least in some items, after a long period of stagnation in investments in the textile
sector. Thus, according to research carried out in the eighties, a renewal of 80 to 100% was
reached in workshops dedicated to the manufacture of tops.
         It maintained its importance in respect to labour market, thus occupying the second
place in industries offering labour posts, after food industry, with a total of 12% of direct
employment generated by the manufacturing industry. In connection with its export share
this decade showed a greater relative weight of those textile products which incorporate a
smaller industrial added value, thus the total value exported by textile industry is mainly
(85%) composed of washed and carded wool and the rest by yarns and fabrics. Due to the
high value of wool compared to other textile threads, its sales were addressed to the
countries of greater income, therefore the main buyers are found in the European Economic
Community.

Organization of production
The organization of labour process in Uruguayan textile industry may be considered, since
its beginning, as Taylorist for the degree of work division, repetitive character and low
qualification of tasks and the use of technologies intended to save time and make work
more efficient. At the same time, ways of social discipline and constraint, of settlement of
labour and training and replacement were used, with the aim of achieving a performance
that enabled to increase productivity. In Uruguay, little historical research is done on the
evolution and organization of labour and it is not easy to find information on this subject


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Camou/Maubrigades        National overview Uruguay, Textile conference, 11-13 Nov. 2004

from the available sources. Therefore, files belonging to the companies are most important
as sources to learn about industry evolution, especially for the very early periods.
        In the two main textile companies in the country in the first half of the twentieth
century: Campomar & Soulas and La Aurora, we may trace through the payroll, the
increasing complexity of sections and occupations that gathered the workers. In both
companies, the building structures were specially built for textile production and have
separated rooms for each manufacturing phase, distributed according to the sequence in
work process.
        In La Industrial plant belonging to Campomar & Soulas, inaugurated in 1907, the
display of the different sections was made around a central courtyard closed with gates.
These gates were only opened during the change of shift, stating a territorial separation
between work and every day life.5 The plant of 60,000 square meters, located in a small
town, distant two hundred kilometres from the capital city, was the main working source
and developed a strong link with the population of the place, generating assistance policies
towards the environment, engaging in building or cooperation in the establishment of
services required by the population. Campomar, as well as most of the Uruguayan textile
companies founded in the first stages of industrial development, worked with a system of
full vertical integration. All wool processing from its natural stadium up to the
manufactured fabric ready to be sold, was made inside the plant. This way of production
implied huge enterprises with an important concentration of personnel and diversity of
tasks into the factory.
        Campomar opened with 170 looms.6 Some years later, in 1939 and 1945, two
publications by the company speak of the existence of 200 looms in this same plant.7 In
1960 the total number of looms had grown to 276.8 After the Second World War, in 1948,
an important renewal of looms took place. The most important innovation, as for machinery
bought during the period, seemed to be the progressive substitution of mechanic for
automatic looms (even if in 1960 the first ones still were the majority) and the acquisition
of carding machines for tops. Both innovations made it possible to increase qualified
personnel productivity. The industrial plant maintenance was in charge of mechanic and
electric workshops and departments of bricklayers and painters, water purification, electric
energy generation and vapour, and machinery repair and construction. 9
        We have compared the occupation structure of Campomar in three moments of its
history: at their beginnings (1918), in the times of the first expansion (1934) and in the
period of greater technology incorporation (1951). The distribution between the different
groups of occupations was made with a combined criterion based on the tasks
corresponding to the post, required qualification and controlling that those groups were
placed within certain income ranges. Among the qualified workers we may find different
trades such as carpenter, electrician, bricklayer, industrial fitter, people in charge of the
plant's maintenance and also qualified workers who were part of production process in
tasks which required qualification such as warper, stoker, dry cleaner, machine operator,
milling machine operator, etc.
        When we observe the distribution per worker’s activity, we note that along time,
there is a trend towards more skilled occupied personnel. While in 1918 workers, including
all non-skilled workers, constituted 62% of the total, in 1951 they were 26%. On the
contrary, there was a significant increase in percentage of skilled workers and labourers and
apprentices. Labourers and apprentices are a low-income group with great social mobility;
if we study their path in the company we may see that most of skilled workers were hired


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Camou/Maubrigades                    National overview Uruguay, Textile conference, 11-13 Nov. 2004

first as labourers or apprentices, and later on they obtained the training within the company.
The group of weavers slowly diminished along the period, due to the introduction of
automatic looms, which increased productivity per worker.

Figure 2

                          S tructure evolution per activity in La Industrial

                     70
                     60
    Pe rce ntage s




                     50                                                                   1918
                     40                                                                   1934
                     30                                                                   1951
                     20
                     10
                      0
                          Worker      Laborer and     Weaver      Skill worker
                                      apprentice



Source: Own elaboration based on work tables in: files of the company Campomar & Soulas

There may be several causes for this process of specialization. More and modern machinery
used in production process determined that each activity became more specific per worker.
The spreading of Taylor’s theory of a ‘scientific organization of work’ meant a hierarchic
and bureaucratic, pyramidal and stratified organization. The decisions were made at
directive level, but were transmitted stepped through the different levels to the whole
personnel. Edwards points out that while in early stages of the Taylorization process, the
trend is to workers’ homogeneity, as the process goes on, big companies tend to adopt a
greater differentiation between workers in hierarchic scale, thus constituting a more
impersonal control mechanism. 10
        The average years of work in the company (seniority11) is distributed in a different
way according to activity, clearly showing a trend of over representation of skilled workers
and with supervision posts according to seniority into the company. This trend is reinforced
when we look at the history of the workers into the company. Table 2 shows previous
activity of workers who in 1949 occupied charges of foreman, weaver and skilled workers.
Thus it may be noted that what we could call ‘entrance posts’ to higher hierarchy in the
factory’s work rolls. The post foreman is occupied as a whole by workers who have been
promoted to that post from other positions, such as: weaver, skilled workers and labourers.
Weaver in 42% of the cases is a post performed at least since 1930, but 60% of them come
from lower income other activities and have been promoted to that category.




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Camou/Maubrigades               National overview Uruguay, Textile conference, 11-13 Nov. 2004

Table 2

                 Labour histories in Campomar Company
                    Origin of skilled labour in 1949 *
                                        OCCUPATION 1949
 OCUPATION 1930             foremen        weavers     skilled workers
                                       %            %                 %
Apprentice                                           4
Worker                                              35               31
Labourer                              60            11               59
Weaver                                20            42
Skilled workers                       20             8               12
Total                                100           100              100
Total cases: 135

Notes and source: * Includes only workers who stayed in the company between 1930 y 1949. Own elaboration based on
work tables in: Files of the Company Campomar & Soulas

In the case of skilled workers, a great percentage belonged to the category ‘labourer’, that
had more possibilities of promotion than worker. This pattern of occupation and promotion
in working posts is related to the existence of a strong working of the internal labour
market. The isolation of the place where the factory was located, and the fact that it was the
main working source in the region, added to its size; seem to have strengthened this kind of
working.
         According to the requirements of a more bureaucratic control, which divides more
neatly the spheres of conception and programming from execution, and requires more
intermediation between these two fields a great deal of intermediate managers, the
proportion of administrative and managing personnel increases in relation to workers as a
whole.
         Among the managing and administrative personnel, foremen are those who have in
average, more seniority, equivalent to 15.4 years. There existed a previous category called
‘apprentice foreman’. The person who expected to become foreman should have fulfilled a
period of at least 1500 working days in this post before he could be promoted to foreman.
The average number of foremen per worker experienced important changes along the
period; in 1930 there was one foreman per twenty two workers, afterwards, in the early
thirties, when the number of workers increased very much, this relationship is doubled, and,
by the end of the period, in 1951, it increases up to one per twenty-one workers.
         Along these years, important changes took place in the entrepreneurs-workers
relationship. Since 1943 the "Salaries Councils" (Consejos de Salarios) were settled, which
constituted a collective bargaining instance, where entrepreneurs, workers and the State
took part. The Salaries Councils acted also as a conflict conciliation mechanism, between
the different actors. This is a time of union power strengthening, where legislation referred
to working conditions is widened. The Textile Workers Union (Unión Obrera Textil),
created in 1940, and, namely, the textile salaries council of La Industrial, obtains wages
increases above other branches. The trend that may be seen in the evolution of salaries of
Campomar company is an important increase in real salary and a reduction of wage
inequality among workers.12


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Camou/Maubrigades         National overview Uruguay, Textile conference, 11-13 Nov. 2004

        Nevertheless, it was evidently the increase in wages among supervising personnel
that enlarged the gap between them and workers. In 1930, foremen earned 37% above
workers and in 1949 this difference had gone up to 74%. The strengthening of controlling
posts coincided with the moment - in the early fifties - in which the company and the
branch as a whole started a period of stagnation and crisis. In Campomar, the minutes of the
Board of Directors state the increase in costs of salaries and complications arisen from
workers’ social struggle.
        The economic crisis of the mid-fifties and the end of the industrialization period of
import substitution both marked the beginning of a progressive dismantling of the
negotiated relationship between workers and employers and a deterioration of working
conditions and workers’ quality of life. During the military dictatorship (1973-1984) in
front of a general fall in real salary and an increase in unemployment, neo-artisanal ways of
textile work reappear. These are mainly networks of informal home workers who do
piecework for companies that commercialized their production in the domestic as well as
foreign markets. This sector employed up to approximately 7,000 thousand women, an
important number considering the size of the Uruguayan labour market. 13
        At the same time, by the mid seventies, formal textile companies started a
technological change process, which included the acquisition of new machinery and
renewal of the existing machinery in nearly all Uruguayan textile companies. These
technical changes were addressed mainly to increase production capacity to face foreign
demands. The sector that was more modernized was not production, but managing and
sales, through computation. The work process and the type of products manufactured did
not undergo essential changes. Taylor's matrix of work organization as well as the training
required to workers did not experience changes in most of the companies. A survey carried
out among textile owners in 1991 shows that in 54% of the companies studied, the
technical change had a direct impact on employment, tending to eliminate working posts. 14
        By the end of 1988 a new collective agreement was signed, which for the textile
sector implied, formally, to start again with the old tradition of the forties in a collective
negotiation on wages. In fact, in its content, the provisions of this agreement tend to give a
legal framework to de-regulation of collective relationship in the textile sector. Especially
regarding production organization and technical change, the new rules widened the freedom
for the employers to modify production processes and labour requirements just as the
unions were weakening.

The workers
Before describing the textile industry workers it should be mentioned that, at a national
level, research work on the industrial sector has been devoted to the analysis and
characterization of the growth stages, fluctuations and crises in the different branches that
compose it and their evolution as a whole. In those studies, labour appears as a non
disintegrated component of production, giving account of the increase of workers and the
relative weight this had on production, with no concern for a thorough analysis of its
contribution to the global growth of the sector.
        But, besides, available sources impose a serious restriction to any work tending to
describe the labour market behaviour in the long term. Thus, it is compulsory to present
two successive views, which even if complementary, correspond to different levels of
aggregation. In the first place the evolution of workers in the textile branch since the first
census of the twentieth century, carried out in 1908, is presented. Later on, an analysis of


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Camou/Maubrigades                 National overview Uruguay, Textile conference, 11-13 Nov. 2004

labour characteristics in Campomar & Soulas is presented. The addition of this case study
is intended, on one hand to cover the lack of information already mentioned and to enlarge
in time the term of study of the sector.

Textile workers in manufacturing industry
Along the twentieth century, participation of textile workers in the whole labour market in
manufacturing industry, continued to grow in importance. This is due mainly to the
intensive use of work factor in this particular branch.

Table 3

                                                Employed workers
                                                                                                %
                                                                                            TextileInd./
                          Textile Industry                         Manufacturing Industry
                                                                                              Manuf.
                                                                                               Ind.
                     Total         Men        Women                Total    Men     Women
  1908               1408           848           560          22224       17979     4245             6
  1919                 922          572           350          36872       32167     4705             3
  1930               2263                                      46204                                  5
  1937               6487         2479           4008          57746       43987    13759            11
  1948              10885                                      91960                                 12
  1955              21854                                     135311                                 16
  1968              22905                                     166575                                 14
  1978              16746                                     130068                                 13
  1988              15518                                     124317                                 12
  1997               6314                                      51712                                 12

Sources: Own elaboration based on official industrial statistics

The data at aggregate level allow us to show that in the first decades of the twentieth
century, workers’ participation accompanied the consolidation of this productive sector in
the manufacturing industry as a whole. The steady increase of textile production occurred
in Uruguay in the second half of the thirties, when the participation of textile products in
the total amount of national exports started to become important, at the same time that the
domestic market became a significant consumer of local products. Even if since 1955
textile industry clearly showed signs of crisis, occupied labour continued to grow, maybe
explained by the rigid labour market in a context of labour regulation.
         It was after the profound economic depression during the sixties, that the textile
industry acquired a relative weight in the manufacturing sector of nearly 12%, which was


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Camou/Maubrigades         National overview Uruguay, Textile conference, 11-13 Nov. 2004

maintained in spite of the continued fall, in absolute terms, that takes place in industrial
occupation until the end of the century. Even if workers in absolute numbers, were reduced
to more than a half in the nineties, the participation of the textile industry in the
manufacturing labour as a whole was maintained, partly due to the de-industrialization
process which affected the economy as a whole as from early the eighties15, and also
because of the growth of industrial branches with lower labour intensity. The data used
allow us to state that small enterprises, with less than twenty people, where 65% of working
posts disappeared, were most affected by the process of labour expulsion. On the other
hand, larger companies, of one hundred people or more, showed greater stagnation in
occupation for they kept the same number of working posts as in 1968.
         An analysis from the gender point of view of the textile market also reveals that
there is practically no information of occupied labour according to sex in the manufacturing
industry. The years with available information define the first period of growth (1908-
1919) of the sector and the first big crisis and later recovery of textile industry (1919-1937).
Its description gives valuable clues about the role developed by workers in general and
women in particular in this process. From the scarce data available it is evident that the
textile industry shows as a relevant feature the participation of women in higher proportions
than the manufacturing industry on average.
         The importance of textile industry in the total seems to increase considerably when
we look at occupation: textile workers go from 3% in 1919 to 11% in 1937. Special
attention deserves the income of men and women of the textile branch and its dynamics
should be compared to the manufacturing industry. Occupied men in the textile industry
are, in 1919, 2% of the workers in the industry. In 1937, textile workers representation went
up to 6% of the total of occupied men. In summary its participation tripled between 1919
and 1937. Women already showed a relative weight superior to men in the first year
analysed, even by the end of the period, they represented 7% of the occupied women in the
industry. This number had grown by 1937 up to 29% of the total of women in the
manufacturing industry. For the whole period, women in the textile industry multiplied by
four their participation in the total feminine labour in the industry. The files of the company
allow us to deduce that a great deal of this increase of female occupation may be due to the
crisis that the sector suffered since the mid-twenties. The companies’ strategies in this
moment seem to have been to reduce costs using female labourers, who earned 45% of
male wages.

The workers of Campomar & Soulas
The origin of the workers’ population of the plant La Industrial were national labour,
coming from the rural environment or small populations near the factory. This factory was
characterized by its location in a small town, with little population, therefore its opening in
1907 generated a pole of attraction for workers from different parts of the country. To this
internal migration we may add the immigrants coming mainly from Italy and Catalonia,
some of them directly hired by the company in Buenos Aires or Montevideo. After the
arrival of immigrants from some Italian regions generated migratory chains towards that
locality. Tales from contemporaries point out that many of those immigrants had some
previous qualification; in fact the first books of wages show an absolute majority of Italians
and Spaniards in the most qualified and best paid posts in the factory.
        Another interesting thing that arises when we observe the personnel registers is the
existence of entire families working in the plant, as well as the continuity of generations


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Camou/Maubrigades        National overview Uruguay, Textile conference, 11-13 Nov. 2004

within the company. It has been possible to systematise some information on the
differential participation of men and women in this company since 1918, when women
formed 48% of the occupied labour. Until the early forties this proportion was maintained
with little changes, later going down to 40% in times of better economic welfare.
        The presence of minors was notoriously high in La Industrial, representing 30% of
the occupied labour in 1930. Female labour as well as minor, of both sexes, earned wages
lower than those of men. Among minors, women formed the majority, in 1933 they
represented 54% and in 1940, 71%. The generation continuity of families in the company
shows a policy of the firm that privileged the hiring of relatives. This is shown in the
printed personnel form that workers had to fill in when they entered the factory where they
were asked about women and minors belonging to the household. For the whole of the
textile branch, interviews held with ex women workers emphasize the training into factories
transmitted from mothers to daughters.
        The real wages of workers in the company were maintained with small changes in
the thirties, which correspond to a period with little influence of union organization and
production stagnancy. Since the beginning of the forties, before the settlement of the
Salaries Councils, strong increases in wages were made. These increases were related to the
gross wage and also with a series of wage supplements. The increase in real salary
happened within a context of labour and social law advances, and related to the growing
weight of the state in the economy. The regulation of working relations continues to be
intensified during the period, by means of a compensation regime for work accidents
(1941), a compensation for dismissal (1944) and labour exchange in the different branches
(1947). To all this, we may add the setting of a family allowance regime and the extension
of social security to all of the occupied population.
        The average salary of women in Campomar company was kept below the level of
average wages of men. This difference started by 50% and diminished until 20% by the end
of the period. In the early thirties, a momentary increase in women’s wages took place. By
the forties, and namely after the institutionalization of wage regulation, women’s salaries
tended to diminish the gap in relation to men’s. The greatest wage equality between the
sexes corresponds to a period of lesser female participation. This process suggests two non-
exclusive explanations: when there is lesser wage difference between sexes, the company
prefers to employ more men and/or in a stage of real salary increase women show a trend to
withdraw from the labour market, leaving men to work outside of the household.
        The claim for wage equality between men and women, by group of workers since
the beginning of the twentieth century in the different companies, had its first achievement
in the textile branch. This success may be explained by the union strength but also by the
importance of female participation in the textile branch and women’s activism. This
conquest, pioneer in Latin America, took place in 1960 after a strike with mass
participation. Most of the achievements in this stage would be overturned as from 1967
when collective negotiation for wages was abandoned.

Relationship with the state
Protection state policies towards industry in Uruguay, and in general in all under developed
countries, basically used two kinds of instruments: customs tariffs and exchange
differences. The early development of industry, as the pre-1930 industry was called, has
been an object of research and debate in Latin-American historiography since the seventies.



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Camou/Maubrigades         National overview Uruguay, Textile conference, 11-13 Nov. 2004

One of the axes of the discussion was the relationship between industrial development and
state protectionist policies.
         Protectionist measures in Uruguay during this period were generally applied at
critical moments with the aim of increasing the collecting capacity of the state. The tool
used, taxes on appraisal value, had a stabilizing effect on industry and the state finances. 16
As there were no other tools available for State protection, this policy favoured the industry
intended for the domestic market, but it increased the prices in other industrial branches.
         The first protection measures towards the textile industry correspond to the last
quarter of the nineteenth century. In 1875, the first decree was passed by which it was
agreed to facilitate and promote the establishment of textile factories in the country and in
1887 in a stage of greater economic growth and in the framework of protectionist measures
towards the manufacturing industry, the first act of tax exemption to wool cloth factories
was passed. The 1888 Customs Act, which exonerated from import taxes to machinery for
the industry in general and certain kinds of raw materials required for the textile industry,
was another favourable precedent to the establishment of the industry. Nevertheless, only in
1898, the first tariff grants for the manufacture of wool threads and fabrics, washing and
dry cleaning, were given to Salvo Hnos. The tax facilities dating from 1875, 1887 and 1888
were projects that never realized still 1898. There were many promoters from the state to
create a domestic textile industry but Uruguay did not have the conditions at this time like
capital, skill workers, entrepreneurs and markets to make these projects possible.
         At the beginning of the twentieth century, the Uruguayan economy was growing
with a steady rhythm with its base in a capitalist production pattern agricultural-exporting,
which allowed to cover required imports in a context of demographic growth.17 At the same
time, advances in urban process and state consolidation and social networks gave rise to an
industry for the domestic market. In 1912 an act was passed to reduce import tariffs for raw
materials and materials needed for production. The effects of this new provision would not
be felt during the years of the world crisis and the First World War, which produced a rise
in prices of import products, but promoted, in the twenties, the growth of new industrial
sectors. Among these, the cotton industry developed in this stage composed of textile
factories of imported threads.
         In the twenties, the protectionist policy towards the textile sector had contradictory
effects. On one hand, it provoked a significant raise in customs rights for imported
competitive products but on the other, the valuation of the peso (Uruguayan currency) with
regard to the sterling pound, as Great Britain was the main supplier of fabrics and wool,
determined a reduction on the prices of imported products.
         Since the Crisis of 1929 the economic trend leant towards closure and production
was restructured for the domestic market. The industrial sector was favoured by several
economic measures, which promoted manufacturing production; namely through regulation
of the foreign trade, exchange control and the creation of a state petrol refinery. At the same
time, exchange devaluation acted as an additional way of ‘natural protection’ of domestic
products compared to imported ones.
         During this period, Uruguay followed the same trend as many other Latin American
countries. It used the exchange rate as a way of protection and promotion of the industrial
sector. Preferential exchange rates were used for commodities and supplies with regard to
imported articles, which are competitive to national products and shares of free exchange
per product and destination for exports with greater added value. These measures
contributed to the growth of the sector in first instance but at the same time they


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Camou/Maubrigades         National overview Uruguay, Textile conference, 11-13 Nov. 2004

jeopardized its projection in the long term for lack of continuity and consistency and the
non-existence of technological development plans for the production of capital goods.
        The strong growth of the textile sector during this period was fostered by several
protectionist measures set in 1931: prohibition to import for one month a list of articles
which included suiting and other textile articles, said measure was later on substituted by an
overcharge of 50% in import rights; a raise in tariffs to 48% in merchandises competitive
with production; preference for domestic products in state acquisitions and tax exemption
to raw materials and articles for the industry.
        After a decade of abundant protectionist legislation, in 1941 a specific organism was
created whose main task was the centralized distribution of currency. During the said
period, economic policies tending to stimulate import substitution were deepened and
redistributive policies intended to strengthen the domestic market are implemented. The
most important of these measures was the regulation of salaries and consumption prices.
Together with import control mechanisms and the promotion of investment in machinery
for the textile industry, in a discontinued way and with little success, several policies to
promote export diversity were implemented. In the framework of these measures of state
protection, textile exports found a favourable environment to develop in.
        Textile industry exports started during the Second World War, the main exported
items being yarns, wool fabrics and tops. During the war, textile exports were favoured by a
special exchange rate, which gave an amount of currency that varied along the period,
which could be exchanged in the free market. In average, the resulting exchange rate was
10% for tops and 17% for other textile products, above the rate for dirty wool. Textile
manufacture exports started to have a significant weight, but its evolution would always be
conditioned by state policies of promotion to the sector.
        The immediate post war was a period of transition in which international markets
were unstable, affecting industrial export sectors, among them the wool textile sector.
Production intended for the domestic market was also threatened by the reactivation of the
international market. By the early fifties, a new set of protection measures for the industry
gave new strength to the textile sector. This new expansion stage was almost exclusively
based on tops export.
        Uruguayan tariff protection met both domestic, from wool exporters, as well as
foreign opposition, from English and North American importers that complained of the
high degree of protection which distorted the world market allowing Uruguayan tops to be
sold at prices even lower than dirty wool. As a consequence of this pressure, the percentage
of free exchange assigned to tops was again reduced in the early fifties.
        The industrial policy of the early fifties - even if they had a more discriminate
character than in the thirties - stated subsidies to export of low added value products but did
not affect investment decisions. In this context, some industrial sectors - among them tops
exporters - obtained a short term growth but could not avoid the structural crisis that started
by the middle of the decade.18 The industry, during this period, grew under state protection.
When by the mid-fifties a strong fall in export value of main agricultural and cattle
products and terms of exchange took place, state resources were rapidly reduced and
industry protection policies started to be dismantled. The economic crisis was also evident
in the exhaustion of the domestic market.
        By the end of the fifties the policy of import substitution started to run out and the
heavy structure of regulations for the promotion of the industrial sector started to be
progressively dismantled towards a liberalization of the economy. This process was not


                                              15
Camou/Maubrigades          National overview Uruguay, Textile conference, 11-13 Nov. 2004

linear, but had several advances and backlashes, as consequence of the conflicts of interests
among the actors: several industrial groups, agricultural and cattle breeding exporters,
workers, the state, etc. Uruguay stands out within the Latin American context as one of the
countries that started this process earlier and also with a longer search for alternatives. 19 In
1959 multiple exchange rates were eliminated and imports control, even if charges and
tariffs were kept. By the mid-sixties, a regime of promotion to industrialization and wool
exports was again created and a system of reimbursement to textile exports was
implemented, which would benefit the textile industry. State reimbursements were
promoted and the aim was to give priority to export products with some degree of
processing in front of dirty wool.
         Later on, during the first years of the dictatorship government, which ruled the
country from 1973 to 1984, a model of economic openness and export substitution was
promoted. This strategy implied to privilege the development of non-traditional industries
which will be able to move from the first place, for the first time in the country’s history,
refrigerated meat and raw wool.20 In the framework of this model, the textile industry
specifically benefited from the extension of exemptions to machinery imports, forbids to
export dirty wool for several seasons in order to ensure supply to the industry and
reimbursements ranging from 33% to 48% for products with greater added value.21
Competitiveness of Uruguayan textile products was tied to this reimbursement regime and
other protection measures. In the case of products with more added value, such as suiting
fabrics, competitiveness was assured only through reimbursement, for when industrial
processing is added, the comparative advantage of cheap raw material disappears.
         The policy of trial and error continued and by the end of the sixties a new turn pro
traditional cattle breeding started and a progressive de-activation of non-traditional exports
promotion. Stronger than the reduction in promotion policies to industrial exports, the state
started to work in this period on the mechanism of the exchange lag which made domestic
costs higher. At the same time, the 1981 protectionist policies of the European Economic
Community, main buyer of tops and Uruguayan plane wool fabrics, had a negative impact
on the textile sector. In the following years, in the framework of a state policy addressed in
the first place to the payment of the foreign debt, which used as a resource the return to
traditional exports, protectionist measures for the textile sector continued to be dismantled.
         In summary, State policy towards the sector, if looked at in the long term, shows a
great instability, which sometimes even implies lack of consistency in the tools used. To
this it may be added, the lack of interaction between domestic policies and foreign market
conditions, which place the sector in situations where export promotion corresponds to
restrictions in foreign demand and vice versa.




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Camou/Maubrigades        National overview Uruguay, Textile conference, 11-13 Nov. 2004

                                         NOTES


 Eduardo Acevedo, Anales históricos del Uruguay (Montevideo, 1934), p. 342 and 343.
2
  Raúl Jacob, Breve historia de la industria en Uruguay (Montevideo, 1981) p. 112.
3
  Rolls of washed and carded wool.
4
   Luis Bértola, La industria manufacturera uruguaya, 1913-1961 (Montevideo, 1991), p.
213.
5
   Graciela Sapriza, Los caminos de una ilusión (Montevideo, 1993), p. 55.
6
   Raúl Jacob, Breve historia de la industria, p. 74.
7
   Newspaper El Día, Extraordinary edition of industrial advertising, 08.25.1939 and
Empresa Campomar, Dejemos hablar a los hechos (without edition date).
8
   Forms from the regional survey on textile industry by CEPAL in Campomar Archive.
9
   In the workshops of La Industrial, parts of the machinery, such as washing "trains" were
constructed.
10
    Richard Edwards,”Conflicto y control en el lugar de trabajo” in: Luis Toharia (ed), El
mercado de trabajo: teorías y aplicaciones (Madrid, 1983), p. 397.
11
    Seniority was considered adding the total years of work in the company, not the post.
12
    María Camou, "Industrialización y trabajo: un enfoque de la relación salarial desde una
empresa textil, 1922-1949" (Master Tesis, Universidad de la República, 2001). A thorough
analysis is made on evolution of salaries per category and gender.
13
    Marcos Supervielle, Nelson Argones, Ana López and Graciela Pratt. "Algunas hipotesis
acerca de las transformaciones en los procesos de trabajo en el capitalismo" in: Revista de
Ciencias Sociales, 4, pp. 50-60, here p. 56.
14
    Marcos Supervielle and Francisco Pucci. "Políticas de relaciones laborales e
innovaciones tecnológicas en Uruguay. El caso del sector textil" in: Gisela Argenti (ed.),
Uruguay: debate sobre la modernización posible (Montevideo, 1991), p. 177-223.
15
    Since 1982, Uruguay, as well as most of Latin American countries suffered the so-called
foreign debt crisis, characterized by an inflationary process, productive stagnation, fiscal
deficit, etc.
16
    As imported commodities had a fixed value the degree of protection had an effect inverse
to the price.
17
    The demographic growth was determined by the vegetative increase of migratory flows.
18
    Luis Bértola, La industria manufacturera... p. 234.
19
    Henry Finch, 1974-1997: Towards a new economic model (Liverpool, 1996).
20
    Inés Moraes, La producción de lanas en el Uruguay contemporáneo: una visión de largo
plazo (Montevideo, 2003), p. 28.
21
    We call reimbursements to domestic tax returns and it is a practice accepted by the
GATT, which in the case of Uruguay, the reimbursement regime does not require a
previous assessment of the amount of taxes paid, these are, in fact, subsidies.




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