South Africa Strikes Affects Construction Sites, Airline

Workers at South Africa’s largest building companies and its airline began strikes today, extending labor disputes beyond gold mines and auto manufacturing.

About 90,000 workers in the construction industry downed tools after wage talks with the South African Federation of Civil Engineering Contractors became deadlocked, National Union of Mineworkers spokesman Lesiba Seshoka said by phone. About 600 technical staff at South African Airways also began a strike, said Vincent Masoga, a spokesman at the South African Transport and Allied Workers Union.

Employees at automotive plants owned by carmakers including Toyota Motor Corp (7203), Bayerische Motoren Werke AG and Volkswagen AG (VOW) will consider an improved wage offer that may end a walkout that started Aug. 19. Employers have proposed a 10 percent annual pay rise for the next three years, National Union of Metalworkers of South Africa Treasurer Mphumzi Maqungo said by phone.

“We are convening a national shopsteward council meeting tomorrow,” Numsa spokesman Castro Ngobese said in a text message. “This will give us feedback on consultation and provide a way forward. The strike is still going on.”

South Africa, the continent’s biggest economy, has been wracked by labor turmoil since last year, undermining growth. The rand has fallen by 17 percent against the dollar this year, the worst performer of 16 major currencies tracked by Bloomberg. The currency strengthened 0.1 percent to 10.2321 per dollar by 3:23 p.m. in Johannesburg. Inflation this year ranged from 5.4 percent in January to 6.3 percent in July, breaching the 6 percent upper limit of the central bank target.

Sporadic Strike

“The civil engineering contracting industry is experiencing a sporadic strike action today,” Annemie Cowley, manager, marketing and communications at the South African Federation of Civil Engineering Contractors, said today in an e-mailed response to questions. “Provinces most affected include KwaZulu Natal, Western Cape, Gauteng, Limpopo and Mpumalanga.”

The seven-member FTSE/JSE Africa Construction and Building Materials Index rose 1.2 percent to 43.10. It has declined 4.1 percent this year, compared with a 10 percent gain in the FTSE/JSE Africa All-Share gauge.

Members of the federation include the six biggest listed builders of the country, she said. “More than 50% of employers nationwide are affected and a large number of civil engineering construction sites have reported strike actions in the country.”

Aircraft Refueling

Striking workers at South African Airways’s technical division are responsible for on-site repairs and the refueling of aircraft at terminals across the country, including the O.R. Tambo International Airport in Johannesburg.

The airline has put measures in place to minimize disruptions while asking workers to report for duty, spokesman Tlali Tlali said by text message yesterday. He declined to comment when contacted by phone today.

The mineworkers union has given South Africa’s gold producers, including AngloGold Ashanti Ltd. (ANG) and Sibanye Gold Ltd. (SGL), until Aug. 31 to improve on a wage increase offer of 6 percent for lower-level workers, according to NUM’s Seshoka.

The union, which represents 64 percent of employees at the seven gold companies participating in centralized talks through the Chamber of Mines, was given permission to strike after wage talks with the producers became deadlocked, the Commission for Conciliation, Mediation and Arbitration said on Aug. 22.

The union is demanding increases of as much as 61 percent for entry-level workers. Strikes could cost 349 million rand ($34 million) a day in lost output, according to the Chamber of Mines.

Construction and mining account for about 8 percent of gross domestic product, according to Statistics South Africa, while the vehicle industry makes up 7 percent of the economy, according to the Department of Trade and Industry.

To contact the reporters on this story: Andre Janse van Vuuren in Johannesburg at ajansevanvuu@bloomberg.net; Kamlesh Bhuckory in Johannesburg at kbhuckory@bloomberg.net

To contact the editors responsible for this story: John Viljoen at jviljoen@bloomberg.net; Simon Thiel at sthiel1@bloomberg.net

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