British steel magnate, Lakshmi Mittal, has recently filed an application with the Competition Commission to take over the control of Iscor through his LNM group. Mittal, who purchased 47% of Iscor in 2002, wants to acquire a further 5% of Iscor, therefore making the LNM group a majority shareholder in the company. The union requested the company to disclose more information on the takeover.
Numsa is opposed to the takeover. T hese kinds of transactions in far too many cases are followed by the sale of unwanted assets, the closure of plants, major lay-offs, the gutting of long-held wage and benefit entitlements, and the slashing of retiree pension and health insurance benefits.
Moreover, local human resources will be compromised. This means that foreign expatriates will be preferred to run the company based on the strategic plans of the mother company.
Procurement could be externalised forcing the primary company to use cheaper inputs in the production process. This will further undermine local content and destroy companies in the downstream industries.
Lastly, the takeover will lead to intra-firm pricing of steel, whereby the company will set and determine their own prices in the market. There will be more centralisation and monopoly thus undermining the national interest of South Africa .
Numsa wants the Competition Commission to refuse the acquisition because it further undermines the government in its attempts to create jobs and new investments in the country.
STOP PRESS: As Numsa News went to press, Iscor had announced its intentions to retrench a further 1000 workers this year.