"If Civil War, So Be It!"

Chile, unstable for months, is now threatened by civil war. Marxist President Salvador Allende Gossens has been so shaken by a wave of strikes that last week he reorganized his entire Cabinet and installed a new one containing the chiefs of the army, navy, air force and the paramilitary carabineros. The immediate crisis was sparked by a nationwide truck owners' strike that began on July 26 and has partially isolated Santiago's 3,000,000 residents. Terrorist bands have blown up gasoline pipe lines and dynamited highways. Armed troops now guard gas stations, while Santiagoans in queues several blocks long wait for dwindling supplies of everything from matches to meat. Militant workers have taken over 30 factories in Santiago's "industrial belt," which produces most of Chile's goods. TIME Contributing Editor James Randall recently toured Santiago and visited one of the captive factories with Reporter Paul Potter. Randall's report:

Huge hand-painted signs on plants lining the highway that winds out of Santiago parallel to the Andes foothills proclaim the new order: workers, not management, will run Chile's industry. The takeovers were initiated by Allende during last June's abortive coup (TIME, July 7). At the time, Allende saw such actions as the first step in mobilizing the workers to save his government against the possibility that the army would prove disloyal. It did not. But now, to Allende's consternation, the workers refuse to give up the occupied factories. Their refusal has dealt a staggering blow to Chile's already battered economy.

We decided to visit the Lucchetti plant, a worker-expropriated factory that produces half of Chile's noodles. At the gate we were stopped by a burly "people's guard," who watched us closely as a companion vanished into a nearby building. A few minutes later, a stocky man with a rumpled sports coat met us, and after listening to our request, ushered us into a small, spartan office. "We have taken over the factory," said Union Spokesman Guillermo Bonilla, "because the bosses never gave workers human respect or consulted with them about changes in their jobs. They were bastards."

Now that the bosses are out, said Bonilla, the workers will run the factory themselves and do a better job of it. "Malcontents will be weeded out faster, and production will increase [actually, it has dropped slightly since the takeover]. We will do away with inflation by working harder, taking better care of machinery and by not asking for excessive pay raises."

Given Chile's hopelessly snarled economic problems, Bonilla's solution sounded a bit too simple. The fact is that Chilean workers who now earn around $30 a month, will need substantial pay boosts in order to offset inflation, which, at 300% a year, is the highest rate in the world. If they are granted such huge wage increases, the inflationary trend will continue soaring, wiping out their gains. They are ensnared in an economic Catch-22.

Bonilla vowed that the Lucchetti workers would continue occupying the factory until the government did something to improve their lot. Just what the government could do, he did not detail. But he warned that if any attempt is made to evict the workers forcibly, they will fight back. "And if this means civil war, then so be it!"

Giving force to Bonilla's words was the military-like discipline of the workers. They sleep in shifts at the factory, so that there is always an alert group on guard. And though we saw no weapons, Allende's right-wing opposition insists the workers are armed.

For all this, the workers seemed happy, almost euphoric. A soccer game was in full swing in the company compound, while indoors a group of young people strummed guitars and sang decidedly unrevolutionary songs (sample: "Lucchetti noodles are really, really good"). But by last week the mood had darkened. A textile factory in the southern city of Punta Arenas was stormed by troops searching for arms; one worker was bayoneted and another shot and killed. At Lucchetti, a photographer was told he could not enter or take photos "for security reasons." Said Bonilla nervously: "We expect the military at any time." With the traditionally neutral military leaders joining Allende's Cabinet, all sides were wondering if that expectation would be fulfilled.

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