Buenos Aires: Argentina’s industrial landscape is facing a steep decline as iconic local manufacturers struggle to survive amid sweeping economic reforms introduced by President Javier Milei. Factories that once symbolized the nation’s manufacturing prowess are closing or downsizing, creating economic and political pressure on the administration just ahead of crucial midterm elections.
For decades, Lumilagro, the 80-year-old thermos maker famous for its steel and glass containers used in the traditional preparation of mate, thrived on local production. Today, the company has been forced to shut down its glass furnace, operate only one of its four assembly lines, and reduce its workforce from 160 to 60 employees. Rising production costs, falling domestic sales, and competition from cheaper imports often 30% less than local manufacturing costs have left the firm dependent on imported thermoses, highlighting the vulnerability of Argentine industry under Milei’s economic overhaul.
Similarly, Ilva Ceramics has closed its Pilar factory in Buenos Aires, leaving 300 workers without jobs. Protesters have gathered outside the plant, demanding compensation and accountability. The closures reflect broader structural pressures on manufacturing, which has been hit by deregulation and competition from low-cost imports, exacerbated by a peso widely considered overvalued and diminished consumer purchasing power.
President Milei’s radical policies, including sharp public spending cuts and an overvalued currency, have successfully reduced inflation and produced a fiscal surplus. However, industrial production fell 4.4% year-over-year in August, while unemployment in factory-heavy suburbs of Buenos Aires rose to 9.8% from 9.1% last year. Economists warn that while Milei’s measures stabilize macroeconomics, they have also undercut labor-intensive sectors, limiting job creation and generating public discontent.
Politically, Milei faces pressure to secure legislative support to advance free-market reforms and sustain his vetoes of congressional spending bills. His libertarian party, already weakened by defeats in Buenos Aires provincial elections, must gain seats in the opposition-dominated Congress.
Despite the manufacturing slump, Milei’s administration emphasizes potential growth in energy, mining, agriculture, and AI-driven sectors. Yet, experts caution that these areas cannot immediately offset losses in traditional industries, leaving the president’s reform agenda vulnerable to rising unemployment and declining popular support.
The situation of Argentina’s “Made in Argentina” brands underscores the tension between ambitious economic reforms and the immediate social and political realities facing the country.