Closures extended to sections of Vanderbijlpark plant and could possibly start by the end of September.
The trade union Solidarity will oppose steelmaker ArcelorMittal South Africa (Amsa’s) renewed plans to shut down its long steel operations and the extension of layoffs to sections of its Vanderbijlpark plant.
The 3 500 job losses widely quoted as being on the chopping block at the Newcastle and Vereeniging plants have now increased to around 4 000, after an additional notice of restructuring at the Vanderbijlpark plant was served on the union on Monday morning.
Amsa share price
According to Solidarity’s deputy secretary Willie Venter, the complete closure of the long steel business will result in over capacity in support functions at Vanderbijlpark.
Added to that, Amsa will also close its coke manufacturing operations – which are no longer economically viable – as well as its central workshop. All in all, these changes have, according to Amsa, necessitated the 500 additional retrenchments.
The notice served on Solidarity puts Amsa’s total staff complement at about 5 600, which means it plans to retrench 71% of its workforce.
The closures could take place as soon as the end of September, according to Solidarity.
“We will follow the legislated processes and resist the closure of the plants fiercely,” Venter said.
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He says organised labour has not been given insight into the search for investors in the ailing steelmaker. This process is being led by the state-owned Industrial Development Corporation (IDC), which recently supported Amsa with almost R1.7 billion.
Venter, however, states that while it is reasonable to expect the owners of the company to invest in new technology, this will not happen unless government creates a conducive environment.
Amsa has ascribed its problems to high electricity prices and structural logistical problems, among other things.
Its applications for discounted electricity tariffs at its Newscastle and Vanderbijlpark plants were submitted to Eskom in October last year, but the utility rejected them, saying Amsa does not qualify under the long-term negotiated pricing agreement framework.
Amsa petitioned the energy regulator Nersa, which determined at a meeting on 28 August that it does substantially qualify and referred the matter back to Eskom to negotiate the terms of the agreement with Amsa. Once the parties have reached an agreeement, it must return to Nersa for final approval.
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Nellis Bester, chairperson of the Ferro-Alloy Producers’ Association (Fapa), some of whom have successfully entered such agreements with Eskom, told Moneyweb the negotiations can take more than a year.
“We don’t have that time,” Venter says. Solidarity will do all it can to ensure that the government acts speedily to remove constraints on Amsa and other manufacturers facing similar problems that are within government’s control, says Venter.
“This closure is the direct result of the government’s inability to create a competitive industrial environment and to find and urgently implement practical solutions where those solutions fall within its control. Our steel industry has been struggling for years under power crises, a failed rail and port system, and a government that simply cannot take the policy decisions necessary to protect our industries. Now, thousands of people’s jobs and incomes are at stake,” Venter said.
He warned that the retrenchments will not only affect the steel industry but that all indications currently point to a ‘retrenchment bloodbath’ that could hit various industries across South Africa.
“If large companies like Amsa can no longer keep their heads above water, the government must realise that the country is on the brink of an industrial disaster,” he added.
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The closure of Amsa’s long steel plants will have a ripple effect on downstream manufacturing and will also affect several other industries that rely on Amsa’s products.
He said Solidarity will support its members throughout the upcoming consultation process at Amsa and will use all legal and labour measures at its disposal to protect their jobs and interests.
“We are not going to stand by and watch as thousands of families are deprived of their income due to government failure. Solidarity will not only fight this retrenchment bloodbath on behalf of its members with the employers involved and the government, but will also support its members who are affected with, for example, other job-protection initiatives to help soften the impact of this government failure,” said Venter.
Solidarity warns that the Amsa announcement, like that of Ford last month, is only the beginning of greater job losses if the government does not act urgently to protect the industrial sector and restore stability. Bridgestone SA has already closed, chrome smelters are also under severe pressure, and the pressure on the mining sector continues to increase.
This article was republished from Moneyweb. Read the original here.
