News / Economy

S. African Engineering Strike Latest Blow to Sickly Economy

Members of the National Union of Metal Workers of South Africa, NUMSA, hold banners as they protest with others during national strike action in Cape Town, South Africa,  July 1, 2014.
Members of the National Union of Metal Workers of South Africa, NUMSA, hold banners as they protest with others during national strike action in Cape Town, South Africa, July 1, 2014.
Reuters

More than 220,000 South African engineering and metal workers launched a strike over wages on Tuesday, hot on the heels of a crippling platinum dispute and dealing a further blow to an already weak economy.

Members of the National Union of Metalworkers of South Africa (NUMSA), the country's largest union, and other smaller unions marched in cities including the commercial capital Johannesburg, Cape Town and Durban, NUMSA spokesman Castro Ngobese said.

"There are no talks at the moment and none are scheduled," he said. Workers are demanding a 12 percent wage hike, double the inflation rate, while employers are offering 8 percent. Local media reports earlier said NUMSA had revised its demand down to 10 percent and employers had raised their offer to 8.5 percent but Ngobese said this was not true. South Africa is still reeling from a five-month strike in the platinum mines that ended with a wage settlement last week, but not before dragging the economy into contraction in the first three months of the year.

Steel and metals manufacturing directly accounts for a fifth of the factory sector, and the impact on the economy of the NUMSA action will be heavier than that of the platinum strike, Barclays Africa said in a note.

The latest strike will likely hit companies such as construction and engineering firms Murray & Roberts and Aveng Ltd , both involved in building two crucial power stations for state-owned utility Eskom.

Murray & Roberts, which is helping build steam generators for both power stations, said no work was taking place at parts of the Kusile plant and only minimal work was being done at parts of the Medupi station.

"Approximately 1,400 scheduled employees are not at work at Kusile. We have decided to not send in any other employees to the site until we have further clarity," said Ed Jardim, a spokesman for Murray & Roberts.

Eskom expects to get the first unit of Medupi operating early next year but the strike could delay that.

Auto parts makers such as Dorbyl will also be hit, raising fears that a prolonged stoppage could affect production in the important automotive sector. As many as 20 companies supplying Toyota Motor Corp, Ford Motor, and General Motors are affected, said Ken Manners, vice president of the South African national automobile components industry body NAACAM.

"We have taken contingency plans, looking at stocking up on parts and there has been greater inter-company cooperation to try and create a buffer from the strike. The impact will really be felt if the strike is prolonged, more than a week or two," Manners told Reuters.

A four-week strike in 2013 by more than 30,000 NUMSA members at major auto makers cost the industry around $2 billion.

Eskokm targetted

NUMSA will also picket Eskom headquarters on Wednesday to press for wage increases. Eskom supplies almost all the electricity for Africa's most developed economy and is deemed an essential service, making strikes illegal.

But NUMSA General Secretary Irvin Jim hinted at the weekend that workers would defy the ban, saying the union might have "no option but to allow our members to liberate themselves".

Other companies that could be affected include Africa's biggest packaging firm Nampak, electrical cables maker Reunert and unlisted steel maker Scaw Metals.

Scaw Metals, one of the biggest steel makers in South Africa, said no production was taking place at its plants because attendance was "very low".

"We are talking about probably 80 percent of employees not reporting for work," said Bheka Khumalo, head of Human Resources. Khumalo said the strike could result in revenue losses of about 33 million rand ($3.1 million) a week and 20,000 tonnes worth of output losses.

The rand was little changed while the share prices of companies affected had also moved little in afternoon trade. NUMSA, once a political ally of the ruling African National Congress, fell out with President Jacob Zuma's government over policy last year.

You May Like

Ebola Death Toll Nears 5,000 as Virus Advances

West Africa bears heaviest burden; Mali toddler’s death raises new fears More

Jordan’s Battle With Islamic State Militants Carries Domestic Risks

Despite Western concerns that IS militants are preparing a Jordanian offensive, analysts call the kingdom's solid intel a strong deterrent More

Asian-Americans Assume Office in Record Numbers

Steadily deepening engagement in local politics pays off for politicians like Chinese-American Judy Chu More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Talks to Resume on Winter Gas for Ukrainei
X
Al Pessin
October 25, 2014 4:21 PM
Ukrainian and Russian officials will meet again next week in an effort to settle their dispute over natural gas supplies that threatens to leave Ukraine short of heating fuel for the coming winter. VOA’s Al Pessin reports from London the dispute is complex, and has both economic and geopolitical dimensions.
Video

Video Talks to Resume on Winter Gas for Ukraine

Ukrainian and Russian officials will meet again next week in an effort to settle their dispute over natural gas supplies that threatens to leave Ukraine short of heating fuel for the coming winter. VOA’s Al Pessin reports from London the dispute is complex, and has both economic and geopolitical dimensions.
Video

Video Smugglers Offer Cheap Passage From Turkey to Syria

Smugglers in Turkey offer a relatively cheap passage across the border into Syria. Ankara has stepped up efforts to stem the flow of foreign fighters who want to join Islamic State militants fighting for control of the Syrian border city of Kobani. But porous borders and border guards who can be bribed make illegal border crossings quite easy. Zlatica Hoke has more.
Video

Video Comanche Chief Quanah Parker’s Century-Old House Falling Apart

One of the most fascinating people in U.S. history was Quanah Parker, the last chief of the American Indian tribe, the Comanche. He was the son of a Comanche warrior and a white woman who had been captured by the Indians. Parker was a fierce warrior until 1875 when he led his people to Fort Sill, Oklahoma, and took on a new, peaceful life. As VOA’s Greg Flakus reports from Cache, Oklahoma, Quanah’s image remains strong among his people, but part of his heritage is in danger of disappearing.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video After Decades of Pressure, Luxembourg Drops Bank Secrecy Rules

European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video Kobani Refugees Welcome, Turkey Criticizes, US Airdrop

Residents of Kobani in northern Syria have welcomed the airdrop of weapons, ammunition and medicine to Kurdish militia who are resisting the seizure of their city by Islamic State militants. The Turkish government, however, has criticized the operation. VOA’s Scott Bobb reports from southeastern Turkey, across the border from Kobani.
Video

Video US ‘Death Cafes’ Put Focus on the Finale

In contemporary America, death usually is a topic to be avoided. But the growing “death café” movement encourages people to discuss their fears and desires about their final moments. VOA’s Jerome Socolovsky reports.
Video

Video Ebola Orphanage Opens in Sierra Leone

Sierra Leone's first Ebola orphanage has opened in the Kailahun district. Hundreds of children orphaned since the beginning of the Ebola outbreak face stigma and rejection with nobody to care for them. Adam Bailes reports for VOA about a new interim care center that's aimed at helping the growing number of children affected by Ebola.

All About America

AppleAndroid

World Currencies

EUR
USD
0.7893
JPY
USD
107.68
GBP
USD
0.6238
CAD
USD
1.1214
INR
USD
61.185

Rates may not be current.