Bruising strikes cost SA hundreds of millions
Fin24

Bruising strikes cost SA hundreds of millions

2013-08-30 09:30

Johannesburg - Striking South African car workers rejected a double-digit wage increase offer on Thursday and said they would intensify a strike that has crippled production of a major export.

Gold mining firms said they were also preparing for a bruising strike that could come as early as Sunday and would slow bullion output, one of South Africa's largest foreign currency earners.

The wave of strikes in Africa's largest economy has already swept up more than 120 000 workers this month in the auto production, construction and airline sectors while sending the rand to four-year lows on worries that labour strife will slow growth.

The number of strikers could increase by more than 220 000 next week, with textile workers, petrol station attendants, retail auto workers and gold miners walking off the job.

That would mean that about 3% of South Africa's workforce would be on strike.

The main union for manufacturing, Numsa, said its 30 000 members in the auto industry rejected a 10% wage hike from carmakers. The union is demanding 14%, well above inflation that is estimated to run at 5.9% this year.

The auto strike started last week and has hit global carmakers such as Toyota, Volkswagen and Ford. The industry makes up about 6% of GDP and the strike has cost the economy an estimated R620m ($60m) a day.

A strike in the gold sector would cost the economy R349m a day, Harmony Gold Chief Executive Graham Briggs told a news conference, speaking on behalf of the industry.

"Producers lose production, revenue, profit and the confidence of the markets; some may even have to shut down shafts, possibly forever," Briggs said.

The National Union of Mineworkers (NUM), the main union in the gold sector, will give producers on Friday 48 hours' notice of its members' intention to strike over deadlocked wage talks, a source with direct knowledge of the matter has said.

The Chamber of Mines, the industry body that negotiates on behalf on gold producers, said this week it had made a final offer to unions to increase basic wages by between 6% and 6.5%.

NUM, which represents 64% of the country's gold miners, dismissed this offer. Another more militant mining union is seeking pay hikes as high as 150%.

The companies, which also include AngloGold Ashanti [JSE:ANG], Gold Fields [JSE:GFI] and Sibanye Gold [JSE:SGL] say these demands are unrealistic as they are being badly squeezed by rising costs and falling bullion prices.

The government will not intervene in the deadlocked talks, mining minister Susan Shabangu told Reuters in Perth, Australia, on Thursday.

South Africa's declining gold industry was caught off guard last year when violent wildcat strikes spread from platinum to gold shafts, costing R5bn in lost output.

The strife in the mines, rooted in a union turf war, dented economic growth and led to sovereign credit downgrades.

Comments
  • Mbonisi Gushman - 2013-08-30 09:47

    It is time for Union leaders to learn business skills and be responsible for their demands. We are seeing where their demands are leading us. To bankruptcy. Bankruptcy will lead to more death and destruction anyway. Thus perhaps it is time for machine gun diplomacy. This kind of behaviour is unacceptable. It is childish.

      Mbonisi Gushman - 2013-08-30 10:47

      Ernest I will point out that I am an individual, like you believe yourself to be. "You people" do not exist. In this country we respect our individual rights. So I ask you, first nicely, to respect me as an individual human being rather than categorise me with these strikers above. Next time I will not be so nice.

      Renny Meere - 2013-08-30 11:08

      I agree with you Mbonisi. These unions have no regard for the well being of our country but rather create the impressions that they care about the workers, which we all know they don't. By striking it creates a loose loose situation for all south africans. Our enemy is the unions who feed of our greed.

      Mbonisi Gushman - 2013-08-30 11:14

      Two of the masterminds of these strikes are Patrick Craven and Jeremy Cronin. Both lily white. And I might add Cronin bought a house in Betty (Verwoed)'s bay. These are the real enemies of progress in this country. They keep our employers tied up in labour red tape. You might find they are secretly working to destabilise SA for Great Britain. But hey, it's just a theory.

      Riad Mahomed - 2013-08-30 11:47

      @Mbonisi Gusman: I hear you but the burning question is how to overcome this conundrum that such industries find themselves in time and time again. Maybe the industries may want to consider that between Union leaders and the actual workers are the shop stewards. In my opinion, shop stewards are the key role players that can help steam the tides from such volatility and the way the industries could achieve such rational is to send these shop stewards on a course that would teach them the basic working of the economy and what the consequences are should labour act in a certain way. This in turn can be explained when the workers approach their respective shop stewards with unsustainable demands. Could this concept not be an investment to the industries and our Economy?

  • Chris Botha - 2013-08-30 09:47

    The stupid president of South Africa is allowing the strike's to go-ahead to get the votes of the masses, he will use this for elections stating that he improved living standards hoping the get the support, but sadly he will not mention how many jobs were lost due to this nor will he comment on what it did to the economy and where SA is heading, he and the ANC idiots only care about power and money, not the people, GO DA!!

      Barrie Murphy - 2013-08-30 11:48

      Of course the government won't intervene, nationalisation report last year was too rich for the government, therefore by making the mines un-operable, and forcing them to shut, is another way of taking them over. If what I said is true, very scary times ahead for SA.

  • Gailtosh - 2013-08-30 09:56

    WHO REALLY CARES. CERTAINLY NOT GOVERNMENT, THE UNIONS OR THE EMPLOYEES THEMSELVES.

  • Robert Blythin - 2013-08-30 10:12

    Last person to leave the country, please turn the lights out!!!

      Chris Botha - 2013-08-30 10:19

      mmmmm.... that is if there is still electricity!

  • Darryl Maze - 2013-08-30 10:51

    Thanks to these uneducated union leaders who know nothing at how an economy is run is destroying this country. If unions keep up with these strikes SA is gonna loose billions and you silly strikers that are listening to your stupid union leaders are gonna loose your jobs. Can you not see whats happening???? Things are just gonna keep goping up because of your stupid strikes and demands.

      Mbonisi Gushman - 2013-08-30 11:27

      So tell me sir. Is Patrick Craven uneducated? Is Jeremy Cronin dumb? What I want to know is: what is their game? They put Blade at the top, but he is the figurehead. Cronin has been deputy of the SACP for years. He is in such a powerful position in the country yet nobody voted him there. Without the ANC the SACP is nothing.

  • Rudi Smith - 2013-08-30 10:53

    Easy peasy just ban labor unions = no more strikes!

  • Tyrone Kleiner - 2013-08-30 11:03

    It's so sad that the A.N.C. is more worried about votes than the economy !!

  • Eduard Louis Goldschagg - 2013-08-30 11:31

    Lame duck government does not want to do anything about strikes because it will cost them votes next year."Demands-demands", what about increased productivity? Workers "demands" are TOTALLY unrealistic. We need a Margret Thatcher here!

  • Hettie Neveling - 2013-08-30 12:05

    These union bosses and strikers are stupid, idiotic and ungrateful. There are thousands of jobless people out there that would be grateful to just have a job. We really do need a Margaret Thatcher. Our goverent are to uneduacated and stupid to do anything. Fire the whole lot of them and employ those jobless people who would be grateful to have a job. Anc doesn't care for the people only for their votes for next year. They are killing our economy these stupid idiots.

  • John Stoltz - 2013-08-30 12:50

    Mine bosses, now is the time to mechanize/robotize to reduce your reliance on these thugs who do not know the mechanics of an economy. You cannot get more than you produce, yet they never want to exchange productivity for an increased wage !! All Union leaders should study economics for at least four years at university level before being appointed !!

  • Altus Kirsten - 2013-08-30 13:48

    Strike, will still put food on the plates of the investers, but I am not so sure about the miners. Who will last the longest? Investers just sell their shares in mines and buy shares in other industries that shows beter returns. Money flows where there is least resistance. Get that through your striking thick scull.

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