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Neasa met with Numsa on Friday in bilateral negotiations in an attempt to find a resolution to a mass strike by over 220 000 workers.
The negotiations "failed to produce a solution to the current deadlock", said Neasa, which is the largest employers' organisation on the Metal and Engineering Industry Bargaining Council.
"It is however disappointing that Numsa does not even want to discuss these issues," said Neasa chief executive Gerhard Papenfus.
Numsa members in the metal and engineering sector went on strike on July 1 demanding a 15% wage increase and a R1 000 housing allowance in a one-year bargaining agreement. It further wants an end to the use of labour brokers.
On Thursday, the employers' organisation - the Steel and Engineering Industries Federation of SA (Seifsa) - tabled a three-year wage offer of between 8% and 10% for different levels of workers in the first year.
The first category of worker was offered 7% in 2015 and 2016, while the others were offered 9% in the second year, and 8% in the final year.
Numsa rejected Seifsa's offer on Friday.
Naesa has offered 8%, subject to an agreement for entry-level workers' wages to be lowered and measures to make the industry more flexible.
The union wants increases of 12% to 15%, more than double the inflation rate.
Papenfus said Numsa had recently pointed out that the metal industry had lost 250 000 jobs during the past five years.
"The metal industry and South Africa face extremely difficult challenges. On the one hand there are workers who struggle to make ends meet and on the other hand SMMEs simply cannot meet workers' wage expectations."
Said Papenfus: "This Industry is in the process of decline and will eventually be destroyed unless we considerably adapt the current industry wage model. Products which used to be manufactured in South Africa are now manufactured elsewhere.
"We are exporting jobs. Merely giving a high increase without addressing the fundamental reasons inhibiting growth and employment, will be irresponsible," he said.
He said Neasa was the largest employers' organisation in South Africa with 23 000 employer members and also the largest employers' organisation on the Metal and Engineering Industry Bargaining Council, representing about 3 000 primarily small and medium-size businesses.
He said if Numsa continued muscling employers into deals which they could not afford, the decline and eventual destruction of the industry would be expedited.
"Unless we find ways to break the chains on this industry, as Neasa is proposing, the future of manufacturing in South Africa is bleak. We will not be party to any agreement responsible for the further destruction of the industry," he said.
"Without an agreement on these Neasa proposals, we simply cannot see our way open to offer any wage increases," he said.
