Trouble brewing at Denel Saab

Johannesburg - Trade union Solidarity on Tuesday warned of "problems" at Denel Saab Aerostructures following the resignation of two top officials.

The resignation of the chief executive officer of Denel Saab Aerostructures (DSA), Lana Kinley, and the company's chief financial officer, Sasa Methola, were causing "warning lights" to flicker at the company, the union said in a statement.

"These resignations come shortly after the company's announcement in December that the company plans on retrenching 15% of its workforce.

"Although the consultation process regarding the planned retrenchment of nearly 120 of the company's more than 780 employees is still going ahead, Solidarity believes that there are now more unanswered questions than before."

During the consultation meeting that took place last week, Solidarity said it had put pressure on Kinley to provide details regarding the government's financial support of Denel and to explain exactly how much of the funds eventually reached DSA.

"However, Kinley answered by saying that she was not at liberty to make the figures available.

"She did, however, undertake to refer the request to the Denel group."

Solidarity said that according to the National Treasury, nearly R8.82bn in financial aid had already been given to the Denel group over the past four years.

"The company is blaming the planned retrenchments on the failure of the A400 Airbus contract, the Augusta Grippen contract, the cancellation of the G150 Business Jet order as well as the fact that the government did not place certain expected orders."

The union said there was now concern over the stability at DSA because Kinley's resignation allegedly followed after a difference of opinion between her and the DSA board.

Kinley told Sapa the reason for her resignation had not been made public yet.

"But there is a board meeting on January 26," she said.

Solidarity said losing two experienced top managers at the same time due to an alleged disagreement, with the board in the midst of a retrenchment process, was "definitely cause for concern".

"Meanwhile there are already indications that DSA's international competitiveness is losing momentum," the union's spokesperson Jaco Kleynhans said.

According to an investigation into one specific DSA tender, DSA's price was 30% higher than the fifth competitor in the process, he said.

"Issues such as this will have to receive serious attention at DSA because if the trend continues, DSA will lose its appeal with both local and international buyers, which will seriously aggravate the already unstable situation.

"Both Kinley and Methola will meanwhile remain in their posts until a final decision regarding their resignation is discussed at a special board meeting," he added.

- I-Net Bridgge