Lucien van der Walt: discussing crisis of steel industry, South Africa
August 25, 2015 Leave a comment
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Foes unite to keep job crisis at bay
21 Aug 2015 00:00 Sarah Evans
The local steel industry is vanishing and about 190 000 people face losing their jobs.
It is Monday morning in Newtown, Johannesburg. The meeting of traditional foes has one thing on their agenda uniting them: to save the steel industry.
Unions in the steel industry such as Solidarity, the United Association of South Africa, the Metal and Electrical Workers Unions of South Africa and the National Union of Metalworkers of South Africa (Numsa), all normally inclined to protect the interests of their individual membership, sit at the same table with major steel producers such as ArcelorMittal. The unions approached steel manufacturers, and a task team has been formed. This is one of their emergency meetings.
Through the glass window of the conference room are furrowed brows, faces sternly looking at documents and occasionally at each other.
It began with notices to retrench issued by major steel manufacturers. Numsa, usually militant in their posturing against capital, went to the bosses. This time, they were not there to fight or strike. This time, they were there to forge an alliance, probably a temporary one.
They met last Friday. By Saturday a list of 10 demands had been drawn up and sent to six ministers, as well as the presidency. Chief among them was a call for an urgent meeting. Numsa’s Vincent Mabuyakhulu Conference Centre, over the road from its Johannesburg headquarters, is the scene of Monday’s meeting. They are usually on opposite sides of the table. Today, they are temporary comrades.
“It’s huge,” says Steve Nhlapo, Numsa’s head of collective bargaining, who slips out of the meeting to brief the Mail & Guardian. He is talking about what will happen if the industry collapses.
He says that at least 50 000 workers directly employed by steel manufacturers will be out of work in six months. Add to that the contract workers, truck drivers and cleaners and the number rises to 190 000. It’s more than 10 times the estimated job losses looming in the mining sector where retrenchments are also on the horizon.
Consider families supported and families of workers who support this industry in the informal economy; the knock-on effect is calamitous.
Marius Croucamp, the head of the metal and engineering industry at trade union Solidarity, says there is general consensus among task team members that they have six months left “to save everything” – or else “all the major steel manufacturing plants will close down. That’s it. The industry will be gone.”
He says that in the Vaal Triangle, about 75% of the residents are dependent on the steel industry. In Saldahna, where ArcelorMittal operates one of its plants, 25% of the people living there are dependent on the industry. “It will be disastrous,” he says.
The task team is in agreement on what is to be done. Central to their demands to government is protecting the local steel industry by way of import tariffs and the beneficial treatment of South African steelmakers.
Croucamp and Nhlapo say South Africa is the only steel exporter out of 64 in the world that does not impose import tariffs. Nhlapo adds that state-owned enterprises do not use locally manufactured steel. At Medupi, the yet-to-be completed new coal power plant, Thai steel is being used.
With this so-called cheaper steel comes the employment of about 2 000 Thai workers on site, he says. This, in spite of the fact that state-owned enterprises are supposed to create local jobs, Nhlapo says. Denel, for example, produces armoured vehicles for export. The aluminium used in the eight tyres on each vehicle comes from Sweden.
The Section 189 notice – signifying intention to retrench workers – and word that companies were under business rescue came in thick and fast from the steel companies. The unions soon realised that dealing with each notice to retrench piecemeal was not going to be easy.
Croucamp says that if government takes too long to respond to the task team’s demands and the industry collapses it will take 10 to 15 years to get the industry back. While Numsa is the majority union in the sector, Solidarity represents 28 000 workers in the industry.
There is also consensus about the elephant in the economic room: China. The Chinese want to build a huge steel manufacturing plant in South Africa. Croucamp says the market cannot sustain it, and it “will be the final nail in the coffin”.
Concerns about dumping steel
“What’s important is that these industries feed into each other. Construction, motoring … they are all in trouble,” he says. There are concerns about China dumping steel in South Africa, something Croucamp says ruined the steel industry in Australia.
Nhlapo says a task team of this nature is unusual in that it was formed independent of government. Although such a team exists in the mining industry, it is a government initiative and not one led by labour and industry. “While government has often spoken about saving the mining industry, we realised nobody was talking about the steel industry,” he says.
In 1994, manufacturing used to employ 800 000 workers. The number has halved since then. Total gross domestic product contribution went from 24% to 11%, he says. “We said this is more than a metal industry issue. It’s a country economic crisis,” says Nhlapo. “But we don’t see urgency from government. Employers have long made submissions about how to save the industry but nobody came back to them.”
Separately, the members of the team are on opposite sides of the political divide. For now, ideology can wait. “We are a trade union. We have taken a stand that we are approaching this as a trade union movement,” Nhlapo says.
Henk Langenhoven, chief economist of the Steel and Engineering Industries Federation of Southern Africa, says the team has reached consensus on many issues. “Everyone is in a crisis. It’s a pity it had to get to this point.”
Langenhoven says the task team’s formation is significant. “This [crisis] has actually brought it together – the severity of the situation has been a catalyst,” he says. He adds that the crisis is “seven years in the making”.
“The sector hasn’t recovered since the financial crisis of 2008.”
Lucien van der Walt, Rhodes University sociology professor, says there have been similar attempts in the past in other iterations, including a sector summit job programme. Regarding their success, he says: “Mileage varies; it depends what is at stake.” But generally, their success has been minimal. “Usually, compromises are made but they aren’t enforced. The success of these attempts depends on how strong unions are to ensure that the compromises are enforced.”
Sarah Evans is a Mail & Guardian news reporter.
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