Trade union Solidarity on Thursday said that it regrets the retrenchment crisis at ArcelorMittal South Africa (AMSA), warning that if key players in the steel industry do not intervene urgently, these retrenchments may be the first of many to follow.
Multinational steel manufacturing company AMSA said on Wednesday it was mulling a large-scale restructuring exercise which might affect more than 2 000 jobs, citing a difficult domestic economic environment.
In a trading statement, the company said certain costs that were not within its control such as high electricity, rail, port and primary raw material costs had contributed to its challenges.
Although it had embarked on several initiatives to improve efficiencies and address expenditure within its control, these cost-saving initiatives would not be sufficient. More significant measures had become necessary, including the review of staffing levels.
Marius Croucamp, deputy general secretary of Solidarity, attributed these impending retrenchments to Eskom rising electricity tariffs and the National Energy Regulator of South Africa (Nersa), saying the energy regulator did not pay attention to the steel giant's cries for help.
"We warned Nersa that this increase will destroy the industry. Yet, they continued and now the employees must suffer the cost," he said.
Croucamp also said the recent implementation of carbon tax placed the industry under more pressure and that it also plays a major role in the retrenchments AMSA is currently facing.
"The timing of the institution was completely wrong because South Africa cannot afford it at the moment. Higher input costs in the steel industry, which is already under enormous pressure, will necessarily lead to job losses," he said.
"Solidarity will do everything in its power to ensure that its members affected by this process receive the proposed severance benefits and the necessary support during this difficult time."
"All stakeholders should urgently intervene; otherwise, more and more companies will have to face retrenchments. Solidarity asks the government to fulfil its duties and to ensure that companies can sustainably survive in South Africa."