South Africa Steel Industry Seeks ‘Realistic’ Wage Negotiations

South Africa’s metals and engineering companies are calling for workers to limit their demands as Africa’s biggest economy slows, ahead of negotiations this month with the country’s largest union.

“We cannot operate as though there is no context, as though we live in a vacuum,” Kaizer Nyatsumba, chief executive officer of the Steel and Engineering Industries Federation of Southern Africa, said in an e-mailed statement today. “Our economy has been performing poorly, a number of employers in the metals and engineering sector have been forced to shut shop in the past few years.”

Evraz Highveld Steel and Vanadium Ltd., Bell Equipment Ltd. (BEL) and Aveng Ltd. (AEG)’s steel unit are among the 2,094 members of the Johannesburg-based industry group. The member companies employ 222,635 people and account for about one-fourth of South Africa’s 335 billion-rand ($31 billion) metals and engineering industry, according to Nyatsumba.

Wage negotiations with the National Union of Metalworkers of South Africa are scheduled for the end of March, amid accelerating inflation and slow economic growth. While the union is seeking double-digit raises, Nyatsumba urged “stakeholders to be realistic in their approach.”

Numsa, as the union is called, has more than 340,000 members. Last year, as wage negotiations reached a deadlock with carmakers, it led a three-week strike, costing the industry about 20 billion rand in lost output.

“Wage negotiations must benefit all Numsa members,” including both salaried employees and hourly workers, Numsa said yesterday in a statement.

To contact the reporter on this story: Kamlesh Bhuckory in Johannesburg at kbhuckory@bloomberg.net

To contact the editors responsible for this story: Simon Thiel at sthiel1@bloomberg.net Nick Leiber, David Risser

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