South African Engineering Employees Locked Out During Strike

South Africa’s federation of steel and engineering industries served a lockout notice to all unions as 220,000 employees prepare to strike following a deadlock on wage negotiations.

The notice to the six unions involved in the wage talks was sent yesterday, the Johannesburg-based Steel and Engineering Industries Federation of Southern Africa said in a statement on its website. A lock-out means that workers affiliated with the labor groups can’t enter the workplace while the dispute remains unresolved.

Members of the National Union of Metalworkers of South Africa will down tools across the continent’s second-biggest economy on July 1, the labor group said yesterday. Affected companies include Bell Equipment Ltd. (BEL) and Johannesburg-based Reunert Ltd. (RLO)’s CBI. While the companies have tabled a three-year deal including an increase of as much as 8 percent in the first year, unions including Numsa are demanding a 12 percent pay raise. Inflation accelerated to 6.6 percent in May, the highest in almost five years.

The Solidarity union, which represents about 22,000 employees who hadn’t intended to go on strike, called for a 21-day extension to wage talks to reach an accord and avert the stoppage.

Great Harm

“The employer organization itself has now brought the industry to a halt, and with it a great deal of harm to its members and the economy in general,” the union said in an e-mailed statement.

Numsa spokesman Castro Ngobese didn’t answer two phone calls seeking comment on the possibility of an extension to the negotiations.

“We welcome any effort that will spare our ailing metals and engineering sector -- and, indeed, our economy -- from the devastating effects of a strike,” Seifsa Chief Executive Officer Kaizer Nyatsumba said in a response to Solidarity’s proposal. “Therefore, we are, in principle, favorably disposed to the continuation of negotiations with all the parties in an endeavor to reach a mutually-satisfactory agreement.”

The steelmaking and engineering walkout will come a week after platinum-mine workers resumed duty after a five month stoppage. Their strike cost the industry about 23.9 billion rand ($2.26 billion) in revenue and 10.6 billion rand in wages.

Numsa’s decision to go on strike is politically motivated, according to New York-based research company Eurasia Group. The union is the largest affiliate of the Congress of South African Trade Unions, an ally of the ruling African National Congress.

The union “has taken an increasingly oppositionist stance toward the ANC, attacking it for failing to implement more radical economic policies,” the group said in an e-mailed statement. “Numsa aims to turn Cosatu into a more independent federation or split away and lead a laborite opposition party.”

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 John Bowker, Robert Valpuesta

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