South African Metalworkers Consider Offer to End Strike

The South African union leading a walkout by 220,000 metalworkers will take a new wage proposal from employers to its members, the Labor Ministry said.

“There is a new offer,” Mokgadi Pela, a spokesman for the Labor Ministry, said in a phone interview today. “We are encouraged by the attitude of both parties.”

The National Union of Metalworkers of South Africa’s executive committee will meet later today following ministry mediation, said Castro Ngobese, a spokesman for Numsa. In the meantime, the strike continues, he said.

The walkout, which started on July 1, is costing businesses about 300 million rand ($28 million) a day, according to the employers’ lobby, the Steel and Engineering Industries Federation of Southern Africa. Stoppages are affecting as many as 12,000 companies, and production has been hurt at carmakers including General Motors Co. (GM) and Bayerische Motoren Werke AG.

“We remain committed to resolving the current strike in the metals and engineering sector and we will continue to engage all parties concerned in order to bring the strike to an end,” Seifsa spokeswoman Ollie Madlala said in an e-mailed response to questions. She declined to comment further.

Last week, the union rejected an offer from Seifsa that included a 10 percent pay increase for the lowest-paid workers. Numsa is asking for 12 percent. South Africa’s annual inflation rate was 6.6 percent in May.

Police said they arrested 53 Numsa members yesterday following attacks on trucks and offices east of Johannesburg.

Hurting Economy

“We have condemned violence,” Numsa’s Ngobese said. “The union will take actions against any member found contravening the law.”

The effect of the strike on investor sentiment will be much worse than the impact on gross domestic product, Thabi Leoka, an economist at Renaissance BJM Securities, said by phone from Johannesburg.

“South Africa could potentially become a risky country, an unpredictable country,” Leoka said. “We risk investment going to other places instead of South Africa.”

The rand weakened 0.2 percent to 10.7057 per dollar by 3:17 p.m. in Johannesburg.

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

To contact the editors responsible for this story: Simon Thiel at sthiel1@bloomberg.net John Bowker, Ben Holland

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