Denel chief executive Shaun Liebenberg on Wednesday denied reports that the arms manufacturer was planning to sack seven out of 10 employees — this after the National Union of Metalworkers of South Africa (Numsa) claimed the company intended sacking 7 000 of its 10 000 employees.
Denel posted a R1,6-billion loss last year. Its annual report shows that liabilities exceed assets and that the company can only be considered a going concern because of state guarantees.
Announcing the losses, Liebenberg said some tough decisions have to be made to return the parastatal to profitability.
He added that based on turnover, companies similar to Denel would have about 3 500 employees, ”but this never implied Denel would as part of its restructuring retrench 7 000 employees”.
”Denel’s emphasis remains on refocusing its business to meet its strategic objectives,” Liebenberg’s spokesperson Priya Pillay said in a statement. ”Whilst staff reduction will need to take place over time, the magnitude as stated by Numsa is totally inaccurate and not planned at this stage.”
Growing turnover will diminish the need for retrenching staff, which is what Denel hopes to achieve with alliances and equity partnerships, she added, voicing Denel’s disappointment that Numsa raised the spectre of retrenchments in the press.
Until now, Liebenberg’s door has been open to trade unionists. On taking up his post last year, it was the company’s unions he briefed first on his proposed macro-strategy.
”At this session, he illustrated how far Denel lagged behind in terms of productivity by alluding to international benchmarks,” Pillay said.
The following day a Numsa spokesperson was quoted in the media as saying Denel had promised there would be ”no major job cuts” and that ”Denel’s turnaround plan met with Numsa’s approval”.
Since then, Liebenberg has had regular and consistent communication on the way forward with all Denel stakeholders, notably Parliament, major clients such as the Department of Defence and organised labour.
”At all times there appeared to be consensus on the restructuring of Denel, which would entail: gaining privileged access to local defence spending; partnering with state agencies, attracting equity partnerships; focusing on commercially viable businesses where Denel has real technological leadership, thus exiting the non-profitable businesses; and building world-class capacity,” said Pillay. — Sapa