South Africa’s government plans to restart efforts to end a strike by metalworkers affecting 12,000 companies and carmakers including Nissan Motor Co. (7201), Toyota Motor Corp. (7203) and Ford Motor Co. (F)
I will “meet with them and say what went wrong,” Labor Minister Mildred Oliphant told reporters in Cape Town today. “Maybe we can facilitate that process so that they can end that strike sooner rather than later.”
The stoppage by more than 220,000 members of the National Union of Metalworkers of South Africa, the country’s biggest labor group, has disrupted manufacturing output, threatening an economy still reeling from a five-month strike by platinum mineworkers that ended in June. Anglo American Platinum Ltd. (AMS), Lonmin Plc (LMI) and Impala Platinum Holdings Ltd. (IMP) lost about 1.1 million ounces of the metal. The continent’s second-biggest economy contracted in the first quarter, the first decline since a 2009 recession.
The minister will meet with Numsa and the Steel and Engineering Industries Federation of Southern Africa later today. Mediation by the labor department last week failed after the union rejected a three-year wage offer from Seifsa, as the employers’ lobby is known.
The government may consider forced arbitration to avoid lengthy strike in future, Oliphant said.
“Government has to intervene,” she said. “We don’t think we can have such long strikes in our country. Where we see that maybe mediation is not succeeding, then we need to maybe enforce the arbitration.”
Nissan temporarily closed its production plant in Rosslyn, near the capital, Pretoria, from July 14 to July 21, the company’s South African unit said in an e-mailed response to questions. If the strike that began on July 1 continues “into the following week, Nissan South Africa may have to reconsider its production schedule,” it said. The company produces 225 vehicles a day at the plant.
Toyota and Ford have also temporarily halted local production.
“On top of our normal challenges with labor, there are some industries which are affected by strikes every single year, whether directly or indirectly,” Christie Viljoen, an economist at NKC Independent Economists in Paarl, near Cape Town, said by phone today. The production stoppage sends a very negative message to investors, he said.
Eskom Holdings SOC Ltd.’s Medupi and Kusile construction sites have been attended by about 70 percent of contract workers since the start of the strike, Andrew Etzinger, a spokesman for the utility, said by e-mail.
The state-owned company, which supplies 95 percent of electricity in the country, is building the facilities to relieve power shortages that have constricted the economy. Each will have the capacity to generate about 4,800 megawatts of electricity.
“We haven’t had any disruptions,” Eskom’s acting Chief Executive Officer Collin Matjila said in an interview in Cape Town. “We would want to see the strike resolved as soon as possible otherwise it does begin to impact on our schedule.”
The rand strengthened 0.4 percent to 10.6715 per dollar by 5 p.m. in Johannesburg.
Seifsa yesterday withdrew its offer to raise pay by 10 percent in the first year, 9.5 percent in the second and 9 percent in the third. Numsa rejected the proposal on July 13.
The union plans to intensify the strike by calling on 140,000 members in other industries to down tools, Stephen Nhlapo, head of bargaining at Numsa, said by phone.
The strike is costing the metals and engineering industry about 300 million rand ($28 million) a day, according to Kaizer Nyatsumba, chief executive officer of the employers’ lobby.
As the strike enters it’s third week, Seifsa is reverting back to discussions within the Metal and Engineering Industries Bargaining Council after talks with Numsa failed, according to an e-mailed statement.
“We welcome the fact that the MEIBC has scheduled a facilitated plenary session to take place this week,” Nyatsumba said.
South Africa’s second-biggest labor group, the National Union of Mineworkers, is meeting with Eskom at the Commission of Conciliation, Mediation and Arbitration today following a deadlock in wage talks. The NUM is seeking a 12 percent increase while the power utility is offering 5.6 percent. Inflation was 6.6 percent in May.
“We are warning them that our members are angry and depressed,” Livhuwani Mammburu, a spokesman for NUM, said by phone. “We feel Eskom rushed to CCMA; as the NUM we feel that Eskom should have given negotiations a chance.” NUM said it has more than 16,000 members at the utility, about a third of the company’s workforce.