South Africa’s largest labour union, the National Union of Metalworkers of South Africa (NUMSA), rejected a three-year wage offer from metal and engineering firms on 13 July, and threatened to call for sympathy strikes by its remaining 110 000 members.Since 1 July approximately 220 000 NUMSA members have staged strike action affecting some 10 500 firms. Robert Besseling, principal analyst at IHS Country Risk, assesses the impact of these actions.
Key points:
* The strike is likely to seriously affect manufacturing output, further harming South Africa’s economy, which is already set to fall into recession this year mostly due to strike action in the mining and manufacturing sectors.
* The National Union of Metalworkers of South Africa (NUMSA) is seeking to capitalise on protracted strike action and high wage demands to recruit beyond industrial sectors and gain political benefits.
* Over the next year, strike action by NUMSA is likely to affect automotive manufacturing, mining, power, engineering, and metallurgy sectors posing severe risk of work stoppages, disruption and vandalism.
The strike by South Africa’s largest labour union, NUMSA, is costing the economy an estimated $28,07-million every day, according to employer organisation the Steel and Engineering Industries Federation of South Africa (SEIFSA).
NUMSA represents approximately 340 000 industrial workers, 220 000 of whom are employed in the metals and engineering sectors. The union’s members have been implicated in numerous incidents of vandalism and intimidation of non-striking workers since the start of the strike, and to date police have arrested 111 individuals on related charges.
Rivalries between NUMSA and other unions, especially AMCU and NUM, over recruitment and political affiliation are likely to drive an increased risk of strikes in key sectors, affecting manufacturing (automotive), mining (platinum, gold, chrome, coal, iron ore), power (state electricity utility Eskom), engineering and construction and metallurgy industries (steel).
The government lacks the influence to end protracted strike action, as was illustrated by a five-month strike that affected 40% of global platinum supply and cost the affected companies approximately $2,2-billion in lost output earlier in 2014.
Companies will therefore be forced to make greater concessions to belligerent unions over wage increases and other demands. Competition between the NUM, AMCU, and NUMSA is likely to escalate in the one-year outlook, leading to more frequent and more violent strikes.
