South Africa engineering strike latest blow to sickly economy - CNBC Africa

South Africa engineering strike latest blow to sickly economy

Southern Africa

by Reuters 0

The total turnover of the metals and engineering sector in South Africa is 335 billion rand. PHOTO: Getty Images

Members of the National Union of Metalworkers of South Africa (Numsa), the country's largest union, were downing tools on Tuesday and gearing up for protest marches after last-gasp talks failed to yield a deal on wages and other issues.

The union's members would take part in marches from 0900 local time (0700 GMT) in several cities including the commercial capital Johannesburg, Cape Town and Durban, Numsa spokesman Castro Ngobese told Reuters.

“There are no talks at the moment and none are scheduled,” he said.

(READ MORE: Numsa’s Eskom members set to down tools)

Numsa will also picket the headquarters of power utility Eskom on Wednesday to press for a wage increase of 12 per cent, nearly double the current inflation rate. Employers have offered raises of up to eight per cent.

Ngobese said a report by public broadcaster SABC that Numsa has revised its wage demand down to 10 per cent “was not true”.

Eskom produces the bulk of the electricity in 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”.

The strike will likely hit the operations of companies like constructing and engineering firms Murray & Roberts and Aveng Ltd , both involved in building two crucial power stations for Eskom.


Auto parts makers such as Dorbyl Ltd, Africa's biggest packaging firm Nampak and power cables maker Reunert could also be affected.

The total turnover of the metals and engineering sector in South Africa is 335 billion rand ($32 billion), according to the Steel and Engineering Industries Federation of Southern Africa.

(WATCH VIDEO: S.Africa braces itself for Numsa strike)

The looming boycott is a fresh blow for the economy, which lurched into a contraction in the first quarter after a five-month platinum strike hit mining output. Mining contributes five per cent to gross domestic product.

Steel and metals manufacturing directly accounts for about a fifth of the factory sector, and the impact of Numsa action will probably be stronger than that of the platinum strike, Barclays Africa said in a note.

The rand currency was little changed in early trade, fetching around 10.64/dlr.

Numsa, once a political ally of the ruling African National Congress, fell out with President Jacob Zuma's government over policy differences last year.

The union claims around 340,000 members, although only around two-thirds of these are planning to go on strike.