Pay cuts, job insecurity to stoke Portugal strike

* Strike seen more powerful than a year ago

* Portugal performs austerity under EU/IMF bailout

* Shipbuilders' woes in Viana add to austerity pain

VIANA DO CASTELO, Portugal, Nov 22 (Reuters) - Portuguese workers will stage a general strike on Thursday to protest against the pain of a 78 billion euro bailout that led to deep pay cuts and mass job losses as the debt-laden country enters its harshest recession in decades.

Fears of hardship are nationwide but the struggling Naval Shipyards in the northern town of Viana do Castelo show just how dire the situation in the Atlantic coastal country has become as a once booming industry now faces decay and possible closure.

A siren howls for the midday break and dozens of workers pour out of the shipyard checkpoint to the Field of Agony square. The sinister name comes from a church nearby, but seems only appropriate considering the mood of some employees.

There is little talk and most faces are stern as workers in green and blue overalls walk past the placards calling them to join the strike "against exploitation and impoverishment".

"People at the shipyard feel down, demotivated. It's been like that for months, since they announced the first layoff plan. Now we have all the more reasons to strike due to the new austerity measures," said Antonio Silva, a machine shop metal worker, 54 years old and a shipyard employee for 39 years.

The EU/IMF bailout of Portugal dictates tough fiscal targets to pull it out of its debt crisis.

Fears about jobs are especially acute at public companies like Viana's shipyards as the centre-right government has promised to restructure everything from railway services to the state broadcaster, which have amassed unsustainable debts.

The government has slapped a 50 percent tax on this year's year-end bonuses and cancelled two bonuses for civil servants next year, each equivalent to a monthly salary.

"This month the workers felt the axe falling on their wages for the first time with the bonus tax, so this should boost their participation in the strike," said Fernando Branco Viana, the regional union leader and a long-time shipyard worker.

The unions expect the shipyards to halt work completely on Thursday, as happened in the previous general strike a year ago, and in the region the participation is seen at over 80 percent.

"As a public company, shipyard workers are affected by next year's bonus cuts, so they really get the rough end of the stick... On top of that there's a lot of frustration and anxiety over the future of the company," Branco Viana added.

The shipyard's dire financial straits are illustrative of the country's woes of low competitiveness, waning industrial capacity and indebtedness of public companies that aggravates the state debt crisis. That requires more austerity, however economically damaging, in what some economists see as a vicious circle.

The economy is expected to shrink 1.9 percent this year and at least 2.8 percent in 2012, in what is likely to be Portugal's worst recession since the 1974 revolution. Unemployment is at 12.4 percent, the highest level since the 1980s.

ONLY REMAINING SHIPYARD

Naval Shipyards, the only yard in Portugal still building new vessels, employs about 700 people, but much of the town of 89,000 depends on it via supply contracts, maintenance and services. The company has gradually cut its workforce from several thousand over the past few years by not replacing retirees.

Sergiy Savelyev, a millwright from Ukraine who used to work as a temporary hire at the shipyard but is now unemployed, says he has little choice but to try his luck in Poland or Russia.

"Things are not looking good here and without the shipyards the town would be left out of work," he said.

In June the company, which has a debt of over 200 million euros and made a 40 million euro loss last year, said it planned to lay off 380 workers under a government-approved restructuring plan.

After protests, the government agreed to reevaluate the plan, but has yet to come up with an alternative.

"They tell us they are seeking investors to save the plant, turning to Venezuela one week, the next week to Brazil, Angola or Russia, but it almost feels like the government is playing with us while the company is next on their culling list," said Silva, who earns about 900 euros a month at the plant.

His wife also works at the shipyard's cafeteria, making the family entirely dependent on the plant.

Just last week, the shipyard suffered a blow when Venezuela dropped a plan to buy a large ferry. The plan was announced to much fanfare earlier this year by visiting leftist President Hugo Chavez, but a government change in Portugal from Socialist to centre-right has torpedoed the deal, local media have said.

"It's nerve-wracking to live with this anxiety waiting for a decision, but we haven't lost hope that the plant can be saved, and there are potential partners out there who can help," said Antonio Barbosa of the shipyard's workers' commission.

But Martinho Cerqueira, 59 and a maintenance electrician, said the problem of the shipyard "is only a drop adding to the country's problem" and not the main reason to go on strike.

"They are taking away the rights and benefits of workers. All the Portuguese people have to stand up against this aggression that impacts us at every step - buying food at the grocery, paying bills or interest on loans," Cerqueira said.

Sociologist Elisio Estanque at Coimbra University expected the strike to be much more influential than last year's walkout, which had little nationwide impact.

"Although people generally accept the need for austerity, there is a deep feeling of injustice about the distribution of sacrifices, especially in the public sector," he said.