Unions to fight ArcelorMittal cuts
ANGRY labour unions are planning to oppose job cuts at ArcelorMittal South Africa (Amsa), which said on Tuesday that it would consult employees on probable retrenchments.
Amsa announced it planned to retrench more than 50 employees as low demand, rising costs, a strong rand and South Africa’s sluggish economy necessitated further cost-cutting measures.
An Amsa spokesperson said yesterday that the restructuring would affect all operations. “At this stage we cannot say exactly how many people will be affected or which operations will be affected as the consultation process must first be concluded and all avoidance measures fully explored,” she said.
In the half-year to June, Amsa reported operating and headline losses had increased by R714 million and R1.161bn respectively as a result of higher coking coal and iron ore costs, the strong rand and the continued weakening of the economy.
It said steel consumption was 3.8 percent lower in the first half as a result of subdued economic growth.
Trade union Solidarity said it would hold serious talks with Amsa to discuss alternatives so retrenchments would be considered a last resort.
“We will do everything we can to prevent possible retrenchments,” said Solidarity’s deputy general secretary in the metal and engineering sector, Marius Croucamp.
He confirmed that the union had received a Section 189 notification of the restructuring plans, and described the development as a major blow for employment in Newcastle, Saldanha and the Vaal Triangle.
The planned retrenchments come in the wake of the government imposing tariffs on imported steel to protect the local industry.
However, Amsa chief executive Wim de Klerk said last month that despite duties and the designation of local steel for government infrastructure projects, half-a-million tons had been imported in the first half of the year.
On Tuesday, De Klerk said that measures to improve business performance had not yielded results and Amsa would focus on the costs that were within control in the face of the extremely challenging trading environment.
He said the restructuring plans would include selling of non-core assets and improving procurement savings to help to turn the company around.
De Klerk said he did not believe the outlook was likely to change in the foreseeable future, especially with regards to the lack of investment in infrastructure development.
The National Union of Metalworkers of SA (Numsa) also confirmed that it had been informed about the restructuring process.
The union said it planned to scrutinise the company’s books and financials in order to explore alternatives.
Numsa general secretary Irvin Jim said: “I can promise you and workers we are going to do everything in our power not to run away from engagement, but to fight and oppose any form of job losses at Amsa.”