Workers at state-owned defence manufacturer Denel have been left distressed and uncertain after management informed them that the company will not be able to pay January salaries, which are due tomorrow.

Pretoria Rekord reports that at general staff meetings held on Monday and Tuesday, employees at Denel Dynamics in Centurion and Denel Pretoria Metal Pressings (PMP) in Pretoria West were told that the company lacks the financial resources to meet its payroll obligations.

The announcement has heightened anxiety among workers who depend on their salaries to support their families.

Unions blame leadership failures

The National Union of Metalworkers of South Africa (Numsa) strongly condemned Denel’s management, saying workers are once again paying the price for leadership failures.

“Once again, workers are being forced to carry the burden of Denel’s leadership failures,” said Numsa general secretary Irvin Jim. “We strongly condemn Denel’s executives for allowing the company to reach this point, while workers remain the first to suffer the consequences of mismanagement and instability.”

Jim said Numsa and other unions have been actively involved since 2024 in attempts to stabilise the company, including participation in a task team mandated to develop a turnaround strategy to address the company’s ongoing financial crisis.

“The task team produced a turnaround plan estimated to cost R120-million, which was approved by the Denel board,” Jim said.

“As part of this process, Numsa made concrete proposals on how Denel could recapitalise itself. These suggestions were ignored by executives. That is why we reject any excuses from management. There are solutions, but they are not being implemented.”

Numsa also raised concern about the continued absence of a permanent Denel board, warning that the leadership vacuum has worsened governance instability and undermined accountability.

State support and funding concerns

Denel has already received significant state support, including R1.8b in bailout funding from the National Treasury to restart production, pay salaries and settle outstanding debts.

This forms part of a broader R3.4b allocation, subject to conditions. Before this, the company received a further R992m in working capital support.

“Denel requires adequate and timely funding, combined with disciplined implementation of its turnaround strategy, if it is to fulfil its strategic mandate,” Jim said.

The union is demanding that the Denel board urgently engage the National Treasury to secure funding to ensure workers are paid in full and on time.

Solidarity echoes concerns

Trade union Solidarity has echoed Numsa’s concerns, warning that the salary crisis reflects a deepening group-wide governance failure.

“This situation is completely unacceptable and deeply alarming,” said Derek Mans, the network co-ordinator at Solidarity. “Less than a year ago, far-reaching intervention measures were introduced to stabilise Denel, yet employees are once again being told their salaries cannot be paid.”

Mans noted that the multidisciplinary turnaround strategy approved by the Denel board in February 2025 has not been properly implemented.

Since then, Solidarity points to serious incidents, including reported explosions at PMP, unpaid salaries across divisions and a lack of consequence management.

“Employees cannot continue to pay the price for governance paralysis and leadership vacuums,” Mans said. “Denel’s strategic role, and the livelihoods of its workers, require decisive leadership, accountability and immediate intervention.”

He concluded: “This inevitably raises the question: where are the consequences for this continued failure in execution and oversight?”

Minister’s oversight role

Defence and Military Veterans Minister Angie Motshekga has played an oversight role in the recovery and stabilisation of state-owned arms manufacturer Denel during 2025 and early 2026, stressing that ‘a functional Denel is critical to South Africa’s national defence and security’.

In March 2025, Motshekga met with Denel board chairperson Gloria Serobe and chief executive Tsepo Monaheng to discuss the strategic migration of Denel to the Department of Defence and Military Veterans, a move aimed at strengthening governance and alignment with defence priorities.

She has since maintained close engagement with the company’s leadership through site visits, walkabouts and formal briefings.

A key focus of her oversight has been Denel’s core defence programmes. In late 2025, Motshekga visited Denel Land Systems to review progress on the long-delayed Badger infantry fighting vehicle, including ambulance and command variants.

At Denel’s annual general meeting in November 2025, she reiterated the importance of operational stability at Denel for the wider defence industry.

Questions sent, no response

Questions were sent to Denel and the Department of Defence and Military Veterans, but no answers had been received by the time of publication.

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