As companies continue to carry the burden of logistics failures by Transnet and electricity challenges through Eskom, at least another 3 500 jobs hang in the balance as industrial steel producer, ArcelorMittal SA, said it was pushed to consider a significant restructuring.
It comes as motor manufacturer Volkswagen SA said the escalating costs of doing business in South Africa were becoming unsustainable due to load shedding, deteriorating rail infrastructure and inefficiency of the ports.
ArcelorMittal said high transport and logistics costs, and the country's ongoing electricity challenges, placed it in a difficult position to function as it is.
The company said it was in consultation in accordance with a Section 189(3) retrenchment process, that would impact at least 3 500 employees.
“The ArcelorMittal South Africa board and management have reached this point after having exhausted all possible options. As difficult as these circumstances are, we have a duty to ensure that the business remains sustainable in the long term, in the interests of the company and its stakeholders.
“The remaining business, after the wind down, will be on a more sustainable financial footing and able to invest the appropriate capital in product development and available growth prospects,” said ArcelorMittal CEO, Kobus Verster.
News reports also indicated that Volkswagen was considering disinvesting in South Africa, which would also affect close to 4 000 jobs.
VW however said that was not true.
“Volkswagen is not planning to disinvest from South Africa. Our company is still committed to South Africa where it has been building vehicles for over 70 years.
“Our manufacturing plant in Kariega has been forced to install generators in 2024 to mitigate the risk and disruption of load shedding to production.
“We are using car carrier trucks instead of trains to move new vehicles from Kariega [Eastern Cape] to our Gauteng dealers.
“We are bringing some of our production parts via airfreight to meet the production requirements due to delays of container cargo at the ports,” Volkswagen SA spokesperson, Andile Dlamini said.
Requests for comment to Transnet and Eskom were unsuccessful by deadline on Wednesday.
The National Union of Metalworkers of SA (Numsa) said it would meet with ArcelorMittal to discuss the matter.
“Numsa is concerned about job losses because if jobs are lost, they are unlikely to be recovered. We will engage AMSA (ArcelorMittal) to understand the reasons for the section 189.
“We will work with the government and AMSA to find a solution to prevent job losses.”
National spokesperson of trade federation Cosatu, Matthew Parks, said the government needed to intervene as a matter of urgency.
“We are engaging with the government all the time, the unions are at the bargaining council. Government must sort it out. We don’t have months or years to fix issues at Transnet. This is a wake-up call, it’s not taken lightly.”
Trade union Solidarity said it would also meet with members and support them during the Section 189 process.
The Department of Employment and Labour advised companies to approach the CCMA to mitigate job losses.
“The Department notes the comments by the newspaper. Job losses are a concern to the department. Companies in distress have an option of applying for Ters (Temporary Employer/Employee relief scheme) through the CCMA in an attempt to mitigate job losses.
“Companies are encouraged to approve the CCMA when they decide to embark on the Section 189 process.”
Cape Argus