Steel industry on its knees

Major retrenchments at ArcelorMittal may be the first of many in steel industry – Solidarity

Solidarity said today that it regrets the retrenchment crisis ArcelorMittal South Africa (AMSA) is currently finding itself in. The union also warned that, if key players in the steel industry do not intervene urgently, these retrenchments may be the first of many to follow.

This follows Solidarity receiving a 189A retrenchment notice. Marius Croucamp, Deputy General Secretary of Solidarity attribute this to, among other things, Eskom raising electricity tariffs and the National Energy Regulator of South Africa (Nersa) who did not pay attention to the steel giant’s cries for help. “We warned Nersa that this increase will destroy the industry. Yet, they continued and now the employees must suffer the cost.”

Croucamp continued by saying that even the letter of request Solidarity directed to the Minister of Trade and Industry on 11 June, which urgently requested the minister to gather the key players of the industry to discuss these challenges, fell on deaf ears.

According to Croucamp the recent implementation of carbon tax placed the industry under more pressure and that it also plays a major role in the retrenchments AMSA is currently facing. “The timing of the institution was completely wrong because South Africa cannot afford it at the moment. Higher input costs in the steel industry, which is already under enormous pressure, will necessary lead to job losses,” said Croucamp.

Croucamp added that should AMSA execute the retrenchments, Solidarity will act in the best interests of its members. “Solidarity will do everything in its power to ensure that its members affected by this process receive the proposed severance benefits and the necessary support during this difficult time,” Croucamp said.

Croucamp argued that in the context of the tremendous pressure currently experienced by the steel industry, this announcement would only exacerbate the tension. “All stakeholders should urgently intervene; otherwise, more and more companies will have to face retrenchments. Solidarity asks the government to fulfil its duties and to ensure that companies can sustainably survive in South Africa. This must be done by ensuring the power supply and by reviewing stifling regulations,” Croucamp concluded.

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