Tiger wheels to retrench 700 workers in order to introduce new technology.

DATE: 24 November 2004




TSW mag-wheels manufacturing company popular known as Tiger wheels based in Babelegi (South Pretoria) will retrench 200 workers of the National Union Of Metalworkers Of South Africa (NUMSA) this month and a further 500 workers before 2007. The company wants to introduce new technology that will result in the streamlining of processes. It also claims to be under pressure to restructure operations because of insufficient profits and restructure most of its activities in the affected areas. They further claim that labour unit cost in China is not expensive like in South Africa. Since 1999 the company has retrenched over 400 workers as a result of introduction of new technology.

Firstly, we condemn the unilateral approach to restructure without the ultimate input of the workers. The whole process of retrenchments is substantively unfair and unjustifiable because the union has provided concrete alternatives to the retrenchment process. The company has failed to prove that the contemplated retrenchments are a last resort. In fact, if there viable alternatives to retrenchments the company is obliged by law to implement such alternative measurers. We informed the company that no effort must be spared in ensuring legal compliance. We therefore do not think that the employer has a genuine and fair operational reason for deciding that retrenchment was necessary.

Secondly, retrenchment can be seen as death penalty because it has a deleterious impact on the life of workers and their families. It also impact heavily on the economy by increasing the levels of unemployment and poverty. It further undermines the Growth and Development Summit agreement to create sustainable jobs.

Thirdly, It is unfortunate that the company has conveniently chosen China to demonstrate a false claim that South African wages are high. If we have to stretch below the surface, the reality is that the economies of the two countries are not the same and the China government suppresses unions. Workers are dismissed for embarking on strike and all the laws favour employers. Workers in China do not have a choice but to work for a bag of a mealie-meal. We have recently learned that casualisation is very rife in China and core labour ILO standards are undermined. This will create a profound wage discrepancy and discriminates on workers if South Africa were to accept the same labour standards with China.

The total labour costs have always been low in South Africa. The Labour Research Services study exposed that while workers wages increased by 0.008% between 1997 and 2002. The increase for executive directors for the same years was 85% and for non-executive directors was 164%. Looking at this inequality in pay it then suggests that the company should target higher salaried directors than low paid workers. In the same vain, if we have to compare the salaries of senior managers in the company with those of their counterparts in other developing countries like South Africa. The picture is too ghastly to contemplate. As a responsible union we cannot be excited about exploitative wages in China for the sake of wage competitiveness. Most of the products made in China are of poor quality and are sold at low price to dominate the market.

Finally, clearly the company is betraying the economy and continues to bite the bullet on job shedding. The rationalisation of the workforce is unacceptable because most of the workers targeted for retrenchments are schedule production unionised workers. As a consequent of retrenchments South African people are denied jobs and decent future. The company has never created new employment when the profits where high. And so, from the union perspective, it makes no commercial sense to shed jobs to increase the profits of the company.

For more information contact Dumisa Ntuli @ 689-1700 or cell 0829737282