Argentina: the car industry stalls, and Milei's chainsaw makes the workers pay

According to RFI, the Argentine economy is expected to enter technical recession next month. The radio cites weak consumption and a fall in industrial output, very visible in the Cordoba region, where the car sector is losing momentum. RFI attributes these difficulties to the austerity policy of ultraliberal President Javier Milei. The dispatch is brief: it gives no production figures, no number of jobs at risk, and no names of plants or carmakers. We will not invent them.

What follows is our reading, not an established fact. When an economy contracts, we like to speak of a "cycle" or a "bad patch," as if describing gloomy weather. Yet the recession on the horizon has nothing meteorological about it: it is the result of a choice. Cutting public spending, squeezing incomes and waiting for the market to sort things out amounts to taking purchasing power away from those who buy cars, but also from those who assemble them. The paradox is cruel for the ultraliberals: austerity kills the demand it claims to unleash.

The question the dispatch does not ask, but we do, concerns Argentina's place in the global chain. An assembly-based car industry, dependent on decisions taken elsewhere, is exposed to every shock. Dependency economists describe this mechanism: peripheral countries are integrated in a subordinate way, supplying markets, labour and raw materials, while debt and conditional loans lock that position in place. When the domestic market tightens, it is the workers of Cordoba who absorb the blow, not the distant boardrooms. This reading is a framework of analysis: RFI says nothing, in this dispatch, about the role of creditors or the IMF, and we do not claim otherwise.

The question, then, is who pays and who gains. Those who pay are the employees, the subcontractors, and the shops in a region whose activity depends on the plant. Those who gain, if one follows the logic of the programme, are the holders of capital who emerge unscathed from an adjustment presented as a technical necessity. Productivity gains and budgetary discipline are rarely shared equally: the bill, meanwhile, is written in job cuts and eroded wages.

Finally, it would be a mistake to see this as merely an Argentine episode. The history of the continent is studded with adjustment programmes sold as remedies, leaving behind industrial fabrics in tatters. Each time, recovery is promised for later; each time, the workers foot the bill up front. In the weeks ahead, the real employment figures in Cordoba will need watching, and above all the response of the unions. That, more than any press release, is where the meaning of this recession will be decided.