Comment

Government's think-tank on statistics, Stats SA, has just told us that manufacturing output dropped by 11% in the first quarter of this year. That is why we firmly believe that for the working class and the poor, we are in an economic depression.

And that is why as the leadership of the union we resolved to convene a job security conference that took place from March 12-14 2009.We wanted to understand the magnitude of the problem and define solutions both in the short and long term to defend jobs.

We wanted business to tell us why they are retrenching workers and we needed government on board so that they understood that we believe the issue of jobs is a national crisis that requires its decisive intervention.In the job security conference we unpacked our understanding of the nature of the problem and we were very firm that we regarded both government and business as culprits as stipulated below:

The nature of the problemWe reminded them that this global capitalist financial and jobs crisis is taking place against a backdrop of very high levels of unemployment, worsening poverty and deepening inequalities in our country.

These social evils are being worsened by the cancer of retrenchments which has been eating away at jobs in our country for a long time even during the boom period in our country.

But we went further and stated the following against Government and Business…During the boom period when there was a huge demand for commodities, both for domestic and international consumption, companies still retrenched workers purely to maximize profits.

What was surprising was that even the labour courts approved these shocking practices.Numsa lost many jobs as a result of companies adopting lean and new management techniques, introducing new technology and machines in order to achieve international competitiveness.

In the place of permanent jobs, companies brought in labour brokers and short term contracts, they casualised jobs, and used other devices of this nature. All these measures diluted decent work, destroyed the buying power of the working class and undermined the living wage. Such practices constitute modern slavery. We believe that auto manufacturers and assemblers have been abusing credit certificates generated from their exports.

The abuse arises either from the ceding of certificates by companies exporting leather seats, or by other companies buying those credit certificates direct from catalytic converters.

Numsa believes that this process undermines volumes and manufacturing in this country since some companies despite being beneficiaries of the MIDP use South Africa as a dumping ground for their global crisis of over production.

MIDPGovernment consciously supported these industries through the Motor Industry Development Programme (MIDP). The MIDP hoped to create quality jobs, but companies, despite this government support, still did everything to destroy jobs. Some companies shifted supply contracts for components to countries like Botswana.

When Daimler Chrysler did this it resulted in the closure of Leoni in East London and about 400 jobs were destroyed. We don't know why the department of trade and industry allows this to happen as these practices undermine local content and job creation.

What this means is that during the so-called boom period, companies generated super profits not just from extracting surplus labour of workers but also from taxpayers' money in terms of the MIDP.

Numsa is not arguing that we are, as a matter of principle, against government support given to the auto sector. But we think it is problematic that such support is given to employers without stringent conditions attached especially the prioritization of job retention, job creation, and quality jobs paying a decent living wage.

Numsa is extremely concerned about the conduct of employers especially in the auto sector. These companies subject workers to severe short time and layoffs which affect workers' take home pay.

Workers must then contend with huge personal debts. Added to their worries is the high interest rate on bond repayments, and the burden of taking care of extended families who are without jobs.

Voluntary severance packagesIn the middle of this frustration and depression, companies introduce voluntary separation packages (VSP). They do this without consultation with the union, and they plead that they are not retrenching.

Then instead of employing workers on a full-time basis, they employ workers as contract workers so that during difficult times it is easy for them to retrench. In such circumstances workers fall for these dubious VSPs and they join the unemployed and are condemned to poverty.

Numsa wants to urge its members and all ordinary workers not to accept these VSPs.Auto companies influence retrenchments in the component sector as they continue to demand reduction of costs, but they are also forcing the introduction of labour brokers.

For example, BMW relocated a contract from a company in Durban and gave it over to Lear Corporation; a large part of Lear Corporation's production is produced by labour brokers.

Numsa remains extremely concerned over companies that have been consistently retrenching workers for almost four years in succession, even during the boom period. General Motors South Africa is one such company.

We think it is possible that this company has plans to cease manufacturing locally, to import production and keep open a few platforms to qualify for MIDP support. We have registered this concern with the Director General of DTI.

It is because of all these above tendencies that we have demanded that government cannot talk about a bailout in the auto sector without our involvement as Numsa. Further, there can be no bailout without addressing employers' conduct that seems bent on destroying jobs.

Numsa thinks that it is time that our government, through DTI, must accept that the growing of the domestic market has been compromised by the ruthless pursuit of foreign direct investment, a strategy that has turned out not only to be flawed but which has resulted in speculative investments and over-financialisation of our economy and society.

Numsa strongly holds the view that this country being a developing poor country with huge apartheid economic and social deficits, and huge backlogs as a result of the legacy of inferior infrastructure forced onto the majority of our people, cannot afford to pursue and champion conservative and neo-liberal social and economic policies, as we have done in the past 15 years.

This calls in our view for a review of the stance that has prioritised low deficits and inflation targeting that has led to high interest rates.

Today our position has been vindicated by the conduct of the very same rich countries which we emulate – they have abandoned these dogmas! We call on government to act and cut interest rates in a meaningful way if we are to drive an interventionist approach that will indeed stimulate our economy to grow jobs on a massive scale.

Numsa thinks that high interest rates defy the very logic of driving an export strategy as input costs for exporting sectors become very expensive.

Although high interest rates encourage short-term speculative capital inflows, they in fact only constrain growth and development especially now in the face of this global financial crisis.

We understand the importance of imports and exports. However we think liberalisation of trade and its negative impact in destroying jobs across various sectors, and the current huge trade deficit begs the question – how can we use tariffs to defend our sectors?We now know that developed countries are against us increasing our tariffs up to the bound rate allowed by WTO rules.

But these same countries are bailing out their banks and their manufacturing sector with trillions of dollars. These bailouts constitute financial protectionism of their industry. Production in developing countries like ours, that don’t have such money won’t be in a position to compete against developed countries.

That is why we are calling for the increase of tariffs up to the bound rate especially in the light of revelations that developed countries' bailouts are accompanied by conditions.

Some of these conditions specify that companies receiving a bailout cannot retrench workers in developed countries or employ workers from abroad regardless of their qualification.Our current industrial strategy fails to define a clear agenda to diversify our enclave economy.

Our industrial strategy does not champion beneficiation of our mineral resources let alone transformation of the financial sector so as to drive industrialization that will generate local demand in the economy.We are calling on government to rethink the removal of exchange controls.

These have allowed capital flight to other parts of the globe, particularly to the London Stock Exchange. Such a policy stance has compromised investment in the domestic market and particularly in the productive sectors of the economy.

Irvin Jim, general secretary

Source

Numsa News