/ 8 July 2014

Numsa ‘close to agreement’ to end strike

Numsa workers participating in a work stoppage that began last Monday.
Numsa workers participating in a work stoppage that began last Monday.

The South African union leading a walkout by 220 000 metalworkers is close to an agreement with employers on wage increases and will resume talks to end a weeklong strike, the labour ministry said.

Government officials met separately with officials from the National Union of Metalworkers of South Africa (Numsa) and employers on Monday, Mokgadi Pela, a spokesperson for the labour department, said by phone. The department will continue talks with Numsa on Tuesday on unresolved issues, including the union’s demand to ban companies that provide temporary workers, known as labour brokers.

“Talks are at a very advanced and sensitive stage,” Pela said. “We are close to an agreement when it comes to wage percentages but the reason we are saying talks are at a sensitive stage is we are trying to address sticky issues,” including labour brokers, youth wage subsidies and housing allowances, he said.

Numsa last week rejected an improved offer from the Steel and Engineering Industries Federation of Southern Africa (Seifsa), the main employers’ group, to increase the salaries of lowest-paid workers by 10% this year. Numsa is demanding a 12% raise and a ban on labour brokers.

The strike that began on July 1 has been marred by violence, caused General Motors to halt production because of a disruption of auto-component supplies, and threatens about a third of South African manufacturing output. Moody’s Investors Service said last week the nation’s credit rating may be at risk because of the walkout, which follows a five-month platinum mining strike that caused the economy to contract in the first quarter.

‘Proper offer’
Numsa plans to hold talks on Wednesday with Seifsa, as the employers’ group is known, Mphumzi Maqungo, the union’s national treasurer, said by phone on Monday.

“The strike can only end once the employers put a proper offer on the table,” he said. “We need a full response for all of our demands including pay raise, allocations.”

The stoppage affects as many as 12 000 employers, including companies such as Bell Equipment, Evraz Highveld Steel & Vanadium and units of Murray & Roberts and Aveng. BMW said on July 4 it brought forward planned maintenance at its plant in Pretoria due to the strike, halting production for a week.

The rand gained 0.2% to 10.76 per dollar by 8.13am in Johannesburg. The yield on the South African government’s rand bonds maturing in December 2026 was unchanged at 8.42%.

Talks fail
The strike “will have a fairly immediate negative impact, widening the trade and current-account deficits and slowing economic growth,” Annabel Bishop, an economist at Investec in Johannesburg, said in a note to clients on Monday. “Manufacturers tend not to hold significant stockpiles, delivering what they produce on order instead.”

The National Employers’ Association of South Africa, a separate group representing about 3 000 businesses, said wage talks with Numsa failed on July 4. Neasa, as the owners’ group is known, said it’s holding negotiations with two other labour unions.

“Neasa currently has no mandate to go beyond an 8%” increase, chief executive Gerhard Papenfus said in an emailed response to questions on Monday. “It is Neasa’s view that any future deal must prevent” job losses in the industry.

A Numsa strike crippled the South African car-making industry last year, causing about R20-billion in lost revenue during a 15-day stoppage, according to an industry group.

The current walkout has also affected construction at Eskom’s Medupi and Kusile power-plant sites. Worker attendance was about 30% lower on Tuesday, Andrew Etzinger, a spokesperson for the utility, said by text message. Eskom isn’t planning any new talks with Numsa, which last month rejected a reported 5.6% pay-increase offer from the electricity utility and is demanding 12%. – Bloomberg