Johannesburg - Denel Saab Aerostructures (DSA) announced on Monday that retrenchment letters have been handed out to 161 employees as the company embarks on a turnaround plan to restructure the business and reduce fixed costs.
The restructuring should ensure the longer-term survival of the business, said DSA CEO Ismail Dockrat. The restructuring involves a renewed focus on core business activities, cost cutting initiatives across the main cost drivers and a reduction in DSA's current manpower.
The company, based in Kempton Park, designs and manufactures complex metallic and composite aerostructures for the military and commercial aviation industry and forms part of Denel, the largest manufacturer of defence equipment in South Africa.
At the release of the Denel Group's financial results in August, CEO Talib Sadik said the group would have posted a R200m profit if it was not for the R328m loss at DSA caused by various factors including the delays with the Airbus A400M project.
As a consequence of this, and as part of a broader move to turn the company around, a Section 189 of the Labour Relations Act process was embarked upon in August 2010. On 18 October retrenchment letters were handed out to 161 DSA employees following intensive and formal consultations with employees and union members.
Dockrat said the current retrenchment process is part of a broader restructuring, aimed at reducing the headcount from 670 to approximately 380 by June 2011. The retrenchments were the last resort and were an attempt to achieve sustainability within the organisation. This, coupled with an uncertainty over the future of various contracts had necessitated such a move.
Dockrat added that DSA customers should feel assured that the restructuring will not undermine the capacity and capability to execute on its contractual obligations, and remains confident that the restructuring will achieve improved efficiency and financial performance.
The formal S189 consultation process began in August 2010 and will culminate in staggered exit dates to accommodate various projects and programmes underway. Natural attrition and the conclusion of contractor agreements are anticipated to further reduce headcount.
Dalene Taylor, Acting HR Executive for DSA, said: "DSA is providing outplacement assistance wherever possible and/or practical as well as ample support and assistance."
She added DSA has a Social Plan and an extensive employee wellbeing program in place to help all those affected by the retrenchments.
The restructuring should ensure the longer-term survival of the business, said DSA CEO Ismail Dockrat. The restructuring involves a renewed focus on core business activities, cost cutting initiatives across the main cost drivers and a reduction in DSA's current manpower.
The company, based in Kempton Park, designs and manufactures complex metallic and composite aerostructures for the military and commercial aviation industry and forms part of Denel, the largest manufacturer of defence equipment in South Africa.
At the release of the Denel Group's financial results in August, CEO Talib Sadik said the group would have posted a R200m profit if it was not for the R328m loss at DSA caused by various factors including the delays with the Airbus A400M project.
As a consequence of this, and as part of a broader move to turn the company around, a Section 189 of the Labour Relations Act process was embarked upon in August 2010. On 18 October retrenchment letters were handed out to 161 DSA employees following intensive and formal consultations with employees and union members.
Dockrat said the current retrenchment process is part of a broader restructuring, aimed at reducing the headcount from 670 to approximately 380 by June 2011. The retrenchments were the last resort and were an attempt to achieve sustainability within the organisation. This, coupled with an uncertainty over the future of various contracts had necessitated such a move.
Dockrat added that DSA customers should feel assured that the restructuring will not undermine the capacity and capability to execute on its contractual obligations, and remains confident that the restructuring will achieve improved efficiency and financial performance.
The formal S189 consultation process began in August 2010 and will culminate in staggered exit dates to accommodate various projects and programmes underway. Natural attrition and the conclusion of contractor agreements are anticipated to further reduce headcount.
Dalene Taylor, Acting HR Executive for DSA, said: "DSA is providing outplacement assistance wherever possible and/or practical as well as ample support and assistance."
She added DSA has a Social Plan and an extensive employee wellbeing program in place to help all those affected by the retrenchments.