South Africa set to lose strategic industrial player and 1,800 skilled jobs
On 15 February Highveld issued S(189) notices to 1,800 of its staff members as a result of the Department of Labour’s non-payment for the previously agreed Training Layoff Scheme (“TLS”) and the failure of the IDC to provide additional funding of R150m.
The absence of this funding, which is critical for the continuation of Highveld as a going concern, may result in the complete wind down of the business and the retrenchment of all employees.
This will have devastating implications for not only the local economy but for the steel industry and South Africa as a whole. As representatives of the Highveld labour force, Solidarity and NUMSA are urging government not to allow this to happen.
Highveld Steel is a clear case study of government’s ability and willingness to deliver on its own strategic objectives. These priorities have been made clear, with President Jacob Zuma reiterating them as recently as his address in last week’s State of the Nation.
Specifically, the key anchors of government’s economic agenda are to:
• Create and retain jobs, with a particular focus on skilled jobs in the manufacturing sector
• Preserve or rebuild industrial capacity in South Africa
• Encourage the diversification of local supply chains and improve local capture of income
Government’s intervention at Highveld steel would preserve at least 1,750 skilled and well- paying jobs. Saving this business would ensure that unique structural steel capacity is maintained in South Africa and deindustrialisation reduced. Further, it would support local skills, capacity and domestic supply chains. Importantly, it would also reduce imports and pressure on the current account by manufacturing local steel.
The IDC, which has a mandate to preserve South African industrial capacity has set a benchmark to invest R450k per job in the future. In comparison, it would cost as low as R85k per job at Highveld, less than 20% of this benchmark in current terms. These skilled jobs are paying decent wages. In addition, Highveld contributes approximately R200million to the fiscus in PAYE and supplies local supply chains to the value of R4 billion in procurement per annum. Saving Highveld is clearly a win-win situation.
The unions reiterate that the collapse of Highveld is unacceptable as it is has far reaching national and strategic implications. There is a viable plan that, with the right level of funding on commercial terms, could save the business.
The two unions are doing all they can to secure an urgent meeting with the President on this matter.
For any questions or clarity please contact:
Irvin Jim Marius Croucamp
General Secretary Deputy General Secretary
NUMSA Solidarity Mobile: +27 73 157 6384
Mobile: +27 83 454 6018