Strike costs steel sector R500m in production

As the indefinite wage strike by steelworkers entered its eighth day and workers rejected a revised offer, employers said the action had “eroded” growth in an industry that is struggling to recover from Covid-19 lockdowns and a weak economy.

The action by members of the National Union of Metalworkers of SA (Numsa), the country’s biggest union, has cost the R15bn metals and engineering sector about R500m in lost output, according to the Steel and Engineering Industries Federation of Southern Africa (Seifsa), which represents 18 organisations employing 170,000 workers.

On Thursday, Seifsa CEO Lucio Trentini said the revised offer of 6%, from a previous 4.4%, would have seen artisans receiving increases averaging R4.45 per hour over a three-year term. General labourers would receive increases of between R2.97 and R3.34 per hour.

The steel sector employs about 190,000 people and is a mainstay of the manufacturing sector, which contributes between 10% and 13% to GDP.

Seifsa said the strike, which disrupted the supply chains of major investors such as BMW, could create more headwinds after Numsa rejected the revised wage offer. Prolonged industrial action threatens more job losses in an economy that has the world’s highest unemployment rate at more than 34%.

“For a general labourer the total cost to company moves to a minimum of R12,734 per month,” said Trentini. This is “more than fair, equitable and sustainable” given the economic environment, he said. Workers had so far lost more than R100m in wages, with production lost “five times that number”.

BMW said this week the strike had affected its main vehicle assembly plant in Tshwane, with production of at least 700 vehicles lost on Monday.

Trentini said events of the past eight days had “eroded” the growth that had slowly begun to show in the sector, and noted that it “does look like another [production] week may be lost.

“We are at a crossroads and the lines in the sand have been drawn,” he said. “The longer the posturing and refusal to close continues, the more jobs will eventually be lost in an industry which should be doing everything possible to protect each and every job.”

In a media briefing on Thursday, Numsa general secretary Irvin Jim said the way the offer was structured meant that it would benefit only the lowestpaid workers.

He said the union was prepared to reach an agreement. “We have a very strong view that from where we are sitting we should be in a position to reach an agreement with Seifsa.”

If employers did not move swiftly and come to the table to settle the strike, “they will leave the union with no choice but to issue a secondary strike notice that will shut down the rest of the economy”.

Numsa initially demanded a one-year, 15% pay increase across the board but in August revised it down to 8% after declaring a dispute at the Metal and Engineering Industries Bargaining Council.