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Johannesburg - Negotiations in the metal and engineering industry have deadlocked after three rounds, the National Employers' Association of SA (Neasa) said on Thursday.
"With regard to all the crucial substantive issues no progress has been made," chief executive Gerhard Papenfus said.
"If further attempts to reach consensus fail, it is likely that a national strike will commence in July this year."
Papenfus said compared to other industries in which collective bargaining existed, the metal and engineering sector was already at least 30% more expensive.
The industry was also up to 60% more expensive than industries covered by sectoral determinations issued by the labour minister.
"The metal and engineering industry has become completely uncompetitive, resulting in the loss of more than 250 000 jobs just over the last five years," he said.
"We are competing in a global environment and unless we drastically adapt the cost structure of the metal and engineering industry, manufacturers in this industry will eventually become extinct."
Papenfus said unless the industry was revamped, employers would become distributors of goods manufactured abroad.
He said South Africa could not afford that.
In June, the negotiating employers would do everything to reach a common position with unions without further compromising the sustainability of the industry.
