TABLE OF CONTENTS. Page SUMMARY i. DEDICATION ii. ACKNOWLEDGEMENTS iii. TABLE OF CONTENTS vi. LIST OF TABLES, CHARTS AND DIAGRAMS xii.

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1 vi TABLE OF CONTENTS Page SUMMARY i DEDICATION ii ACKNOWLEDGEMENTS iii TABLE OF CONTENTS vi LIST OF TABLES, CHARTS AND DIAGRAMS xii ACRONYMS xv CHAPTER ONE: INTRODUCTION TO THESIS 1 INTRODUCTION 1 PART ONE: MAIN QUESTIONS AND SIGNIFICANCE OF STUDY 3 1. Main Questions and Concepts 3 2. Significance of Study 5 2a Productive Adaptation 5 2b Enterprise Industrial Relations 8 PART TWO: RESEARCH CONTEXT Role of the State in the Nicaraguan Economy 12 1a Agriculture, Agro-industry and Geothermal Energy 13 1b The Manufacturing Sector and Metalworking Industry 14 1c Industrial Production Issues and the Role of the State The Role of Industrial Labour Organisations International Environment 19 PART THREE: ANALYTICAL FRAMEWORK Productive Adaptation 20 1a Resource Constraints 22 1b Demand Conditions 23 1c Financial Conditions Industrial Relations 28 2a Contrasting Types 28 2b Adaptation and Industrial Relations 30 PART FOUR: RESEARCH METHODS Productive Adaptation Industrial Relations Interview Techniques Limitations to Research Approach 37 PART FIVE: STRUCTURE OF THESIS 38 NOTES 41

2 vii CHAPTER TWO: PRESSURES AND CONSTRAINTS ON PRODUCTION 46 INTRODUCTION 46 PART ONE: MAIN FEATURES OF NICARAGUAN MANUFACTURING PRODUCTION PRIOR TO Import Dependence Main Branches and User Sectors 49 PART TWO: NICARAGUA S FOREIGN SECTOR IN THE 1980s Trade Balance Foreign Financial Flows to Nicaragua Trade Relations 55 PART THREE: GOVERNMENT ECONOMIC POLICY The State as Customer The State as Regulator of Economic Activity 61 PART FOUR: GOVERNMENT INDUSTRIAL POLICY Industrial Development Strategy The State as Industrial Planner and Policy Maker 65 2a Availability of Finance for Current Production 66 2b Input and Product Prices 68 2c Investment Capacity 72 SUMMARY AND CONCLUSION 73 NOTES 76 CHAPTER THREE: THE NICARAGUAN METALWORKING INDUSTRY 79 INTRODUCTION 79 PART ONE: PRESSURES AND CONSTRAINTS ON NICARAGUAN METWORKING PRODUCTION Nicaraguan Metalworking Industry Foreign Exchange Shortages, Changes in Supply Networks and Resource Constraints Changing Domestic Demand Conditions 93 3a Changes in Marketing Channels 95 3b Domestic Demand Conditions and Export Performance Financial Conditions in Local Currency 98 PART TWO: STATE STRATEGY AND PRODUCTIVE ADAPTATION IN FIVE MAIN METALWORKING FIRMS Entry into Equipment Production Reactivation of the Major Firms Developed under the Central American Common Market Entry into Spare Parts Production The Rationalisation Programme 106 SUMMARY AND CONCLUSION 108 NOTES 111 CHAPTER FOUR: PRODUCTIVE ADAPTATION IN IMEP AND METASA 113 INTRODUCTION 113

3 viii PART ONE: CATEGORIES OF PRODUCTIVE ADAPTATION 114 PART TWO: PRODUCTIVE ADAPTATION IN IMEP Adaptation Given Foreign Exchange Considerations 118 1a Sub-conclusion Adaptation to Resource Constraints 123 2a Sub-conclusion Demand-oriented Adaptation 130 3a Changes in Output Composition 130 3b Adjustments in Product Mix Within Equipment Line 133 3c Limits to Demand-oriented Adaptation in IMEP 138 3d Sub-conclusion Productive Adaptation and Financial Conditions in Local Currency 141 4a Sub-conclusion 142 PART THREE: PRODUCTIVE ADAPTATION IN METASA Adaptation Given Foreign Exchange Considerations 148 1a Sub-conclusion Adaptation to Resource Constraints 153 2a The Structural Mill Area 153 2b The Galvanization Area 159 2c Sub-conclusion Demand-oriented Adaptation 163 3a Output Maximization 163 3b Export Trends and Limits to Demand-oriented Adaptation 164 3c Sub-conclusion Productive Adaptation and Financial Considerations in Local Currency 168 4a Sub-conclusion 170 SUMMARY AND CONCLUSION 170 NOTES 175 CHAPTER FIVE: PRESSURES AND CONSTRAINTS ON LABOUR POLICY AND UNION-MANAGEMENT RELATIONS 182 INTRODUCTION 182 PART ONE: THE SANDINISTA MOVEMENT AND ORGANISED INDUSTRIAL LABOUR PRIOR TO PART TWO: GOVERNMENT WAGE AND INCENTIVE POLICY The Social Wage Policy and Constraints on Nominal Wage Increases Government Control over the Structure and Level of Wage Earnings Specific Criteria for Setting Wages and Incentives External Constraints on Non-wage Distribution Within Enterprises 198

4 ix PART THREE: PRESSURES AND CONSTRAINTS ON THE ROLE OF ENTERPRISE UNIONS The Role of Enterprise Unions in Negotiations and Dispute Resolution 200 1a Contrasting Political Stances on the Wage Issue 201 1b Predominant Position of the Sandinista Workers Federation (CST) 203 1c Strike Activity 203 1d Enterprise Bargaining 205 1e Labour Law Pressures and Constraints on the Role of the Enterprise Union in Efforts to Resolve Production and Labour Issues 207 CONCLUSION 213 NOTES 215 CHAPTER SIX: ISSUES IN EMPLOYMENT AND THE DIVISION OF LABOUR 218 INTRODUCTION Main Issues Sources of Labour Instability 219 PART ONE: SKILL CONSTRAINTS AND IN-HOUSE TRAINING IMEP 221 1a New Skill Requirements and Skilled Labour Supply Problems 224 1b Response to Skill Constraints: In-house training METASA 227 2a New Skill Requirements and Skilled Labour Supply Problems 227 2b METASA s Response to Skill Constraints: In-house Training In-house Training and the National Wage System 232 PART TWO: SHOP-FLOOR DECISION-MAKING 233 1a Decision-making on Labour Allocation 233 1b Decision-making on Production Issues and Worker Accountability METASA 236 2a Decision-making on Labour Allocation 236 2b Decision-making on Production Issues and Worker Accountability The National Wage System and Shop-floor Decision-making in IMEP and METASA 239 CONCLUSION 240 NOTES 244

5 x CHAPTER SEVEN: ADAPTATION AND INDUSTRIAL RELATIONS 247 INTRODUCTION 247 PART ONE: CONFLICTIVE AND COOPERATIVE INDUSTRIAL RELATIONS Contrasting Types of Industrial Relations Union-Management Relations in IMEP and METASA a IMEP 251 2b METASA 252 2c A Comparison 254 PART TWO: ADAPTATION AND INDUSTRIAL RELATIONS: SOCIAL WELFARE POLICIES Social Benefits in IMEP and METASA IMEP 259 2a Informal Relations and Ongoing Negotiations 260 2b The Assembly Process METASA 264 3a Negotiations around the 1984 Annual Agreement and Associated Strike Action 265 3b Changes in Management 266 3c Changes in Labour Strategies Summary 271 PART THREE: ADAPTATION AND INDUSTRIAL RELATIONS: INCENTIVE POLICIES Incentive Policies in IMEP and METASA IMEP 275 2a Enterprise Bargaining 275 2b The Economic Brigades METASA Summary 286 SUMMARY AND CONCLUSION 287 NOTES 289 CHAPTER EIGHT: THESIS CONCLUSION 293 PART ONE: PRODUCTIVE ADAPTATION Financial Criteria and Social Transformation Goals 294 1a Research Findings 294 1b Alternative Policy Measures: Applying a Hard Budget Constraint in Foreign Exchange Adaptation to Resource Constraints 297 2a Research Findings 297 2b Alternative Policy Measures: Restructuring and Strengthening Adaptive Capacity Demand-oriented Adaptation 302 3a Research Findings 302

6 xi 3b Alternative Policy Measures: Utilising State Contracts to Implement Industrial Policy 304 PART TWO: UNION-MANAGEMENT RELATIONS Favourable Conditions for This Approach Asserting Autonomy Amid Institutional Pressures and Constraints Measures Aimed at Strengthening Shop Unions 311 PART THREE: CONCLUDING REFLECTIONS ON ANALYTICAL APPROACH A Radically-changed Environment 314 CONCLUSION 322 NOTES 323 APPENDIX: CASE STUDY METHODOLOGY 324 LIST OF INTERVIEWS 348 BIBLIOGRAPHY 351