Import tariff ‘can save steel jobs’

FAR-REACHING steps must be taken to save about 12 000 jobs in the metals and engineering industries, the National Union of Metalworkers of SA (Numsa) — South Africa’s biggest trade union — warned this week.

“We have received Section 189 notices that indicate 12 000 jobs are on the line. This is not a Numsa problem. Everyone should be worried,” said Steve Nhlapo, the head of collective bargaining and organising at the union.

His comments come as the steel industry is in crisis, prompting steelmakers to ask the government to impose import duties to protect them against the dumping of cheap steel.

On Friday, ArcelorMittal SA reported a headline loss of R109million for the six months to June, compared with an interim loss of R6-million a year earlier.

The company said last month it was reviewing its Vereeniging Works to possibly mothball some plants and place others under care and maintenance.

Nhlapo said the industry was in a “sad state because of our government policy of allowing imports into the country”.

Nhlapo said Medupi was being built with steel from Thailand.

“Why can’t they buy steel from next door at Arcelor? It’s time our government realises steel doesn’t end with car manufacturing or wire cables.”

Another example was the Passenger Rail Agency of South Africa’s procurement programme. “Why procure [steel for locomotives] outside of the country . . . we have capacity here,” Nhlapo said.

Retrenchments in the metals and engineering sectors have accelerated. The Steel and Engineering Industries Federation of South Africa (Seifsa) estimates between 6 000 and 10 000 workers might have been laid off during the second quarter.

Indications are that output in the sector declined by 5% during the second quarter. Imports increased by an estimated 5% and exports declined by 2.5%, resulting in a trade deficit of more than R20-billion, said Seifsa chief economist Henk Langenhoven.

The metals and engineering sectors’ contribution to the economy had declined to 3.4% this year from 4.3% in 2007, he said. The combined workforces in the metals, engineering, construction, mining and automotive sectors had dropped by an estimated 30 000 workers since last year.

Gerhard Papenfus, the CEO of the National Employers Association of South Africa, supported the introduction of import tariffs. “Brazil has a tariff of 12% to 25% on steel imports. But . . . it is unlikely the government will do anything to jeopardise relations with [China]. South Africa is paying a huge price for what might turn out to be an inappropriate relationship.”

Papenfus said another solution would be to deregulate the labour market.