In a bid to recoup R1,604-billion in losses reported for the financial period ended March 2005, the state-held arms manufacturer Denel is expected to shed 7 000 jobs, the National Union of Metalworkers of South Africa (Numsa) said on Wednesday.
Denel’s spokesperson noted Numsa’s statement and is due to respond to the trade union’s claims later on Wednesday.
According to the union, the “radical restructuring plans” announced by Denel CEO Shaun Liebenberg include a new strategic direction that would result in the closure and disposal of certain operational sites and outsourcing and relocation of some company divisions.
“This emerged after a recent company announcement that lack of supportive local industry clients and limited access to international defence contracts had negatively affected Denel’s financial performance and rendered operations non-sustainable and non-viable,” Numsa noted in a statement.
The trade union accused the new management, under Liebenberg, of seeking to outsource or close down several divisions that form part of the core activities at the arms manufacturer.
“Now, Denel is geared to change the current business model within 12 to 36 months to a consolidated business entity in order to position itself for profitability and sustainability. And, the company has conceded that it anticipated job reductions,” Numsa added.
Divisional units due for disposals include Dendustru, which provides engineering services to heavy artillery manufacturing, and Irenco, which provides electronic and plastic injection moulding products. Others due to be sold off are Voltco and Bonaero Park, which is part of Denel Properties, said Numsa’s Bafana Ndebele. — I-Net Bridge