S. African Strikes Threaten to Spread to 335,000 Workers

South Africa may face strikes involving as many as 335,000 workers after deadlocks in wage talks between employers and the country’s biggest labor unions spread to gas stations and car dealerships.

About 72,000 motor-industry workers will walk out on Sept. 2 after a breakdown in wage talks between the National Union of Metalworkers of South Africa, the Fuel Retailers Association and Retail Motor Industry Organization, the union said yesterday. They will join employees in the auto-manufacturing, construction and aviation industries that are already on strike, while gold mines face the threat of labor action.

Numsa “has taken a conscious decision to exercise our hard fought democratic and constitutional right to embark on an indefinite strike action,” spokesman Castro Ngobese said in an e-mailed statement. “The strike action has not been on our agenda, but it has been imposed on us” after the motor industry didn’t meet union demands.

South Africa has been plagued by labor disputes for more than a year, hurting economic growth. Inflation in Africa’s biggest economy accelerated to 6.3 percent in July, the highest in 15 months. Gross domestic product rose an annualized 3 percent in the second quarter, a slower pace than the median estimate of economists surveyed by Bloomberg.

Rand Decline

The rand has slumped 18 percent against the dollar this year, the worst performer of 16 major currencies tracked by Bloomberg. The currency strengthened 0.2 percent to 10.3706 per dollar by 4:42 p.m. in Johannesburg.

There is a 70 percent chance of strikes in the gold industry after the biggest unions rejected the last offer by producers, Mark Rosenberg, an Africa analyst at New York-based Eurasia Group, said in an e-mailed note today. The stoppage in the auto industry will probably be resolved within a week and the construction strike within two weeks, he said.

The automotive-manufacturing industry, accounting for about 7 percent of GDP, has been at a standstill since Aug. 19, when about 30,000 workers downed tools. Car manufacturers including Toyota Motor Corp. (7203), Bayerische Motoren Werke AG (BMW) and Volkswagen AG (VOW) collectively proposed a new offer on Aug. 22, representing a 10 percent increase over three years.

“We are still on strike,” Numsa Treasurer Mphumzi Maqungo said by phone today. “The workers have not accepted the 10 percent offer from the employers.”

Construction Industry

The National Union of Mineworkers and the Building, Construction and Allied Workers Union rejected a 7.5 percent increase offer from the South African Federation of Civil Engineering Contractors.

“We remain hopeful that the strike will not be of a long-term nature,” Annemie Cowley, manager for communications and marketing at the South African Federation of Civil Engineering Contractors, or Safcec, said in an e-mailed response to questions. “About 90,000 workers are employed in the civil engineering contracting industry.”

Safcec has about 400 employer members including Murray & Roberts Holdings Ltd. (MUR) and Aveng Ltd. (AEG), the country’s biggest construction companies, according to the federation.

Talks are at “a standstill now,” Lesiba Seshoka, a spokesman for the NUM, said by phone today.

The seven-member FTSE/JSE Africa Construction and Building Materials Index, fell for a second day, declining 1.9 percent to 41.89, the lowest level since Aug. 5. Murray & Roberts led the retreat, decreasing as much as 5.6 percent, and traded 3.8 percent lower at 24.33 rand.

Specially Trained

No violent protests related to the strikes have been reported in Gauteng province, where Johannesburg is located, according to Lieutenant Colonel Katlego Mogale, a spokeswoman for the Gauteng Police Service. The police are ready for any disruption, she said.

“There’s a unit which is specially trained to deal with strikes,” Mogale said by phone. “The public order policing will be dealing with all the protests.”

The NUM, the biggest union in the gold-mining industry, attended a meeting on wages on Aug. 26 and reached a point of non-resolution with mining companies. The union has rejected the last offer by the Chamber of Mines and may decide on a strike in that industry as early as Aug. 31.

The Association of Mineworkers and Construction Union, the second-largest representative of employees at bullion producers, also rejected a revised offer and has applied for a certificate of non-resolution, Elize Strydom, the chief negotiator for gold companies at the chamber, said on Johannesburg-based SAFM today. The permit gives the union’s members permission to start an authorized strike.

‘Highly Likely’

The chance of a workers strike is “highly likely,” Solidarity Union General Secretary Gideon du Plessis said in speech in Johannesburg today.

A gold-mining strike would result in 142,000 people stopping work in an industry already affected by a 15 percent decline in the price of the metal this year. The six-member FTSE/JSE Africa Gold Mining Index has fallen 41 percent this year compared with a 7.8 percent increase in the FTSE/JSE Africa All-Share Index.

“Strikes are not the end of the world,” Finance Minister Pravin Gordhan said at a mining conference in Johannesburg yesterday. “Let the workers and the employers find the right balance. At the end of the day there must be enough cooperation to create normality in our environment.”

To contact the reporters on this story: Kamlesh Bhuckory in Johannesburg at kbhuckory@bloomberg.net; Rene Vollgraaff in Johannesburg at rvollgraaff@bloomberg.net; Paul Burkhardt in Johannesburg at pburkhardt@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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