Major South African state-owned company back from the brink

Following reports that two Denel divisions could not pay employees’ salaries, the state-owned enterprise has averted disaster and paid them for this month.

“This is despite the fact that an urgent general meeting was convened earlier this week to address the possible non-payment of salaries at Denel Dynamics and Denel PMP,” trade union Solidarity said in a press statement on 23 January.

“In Denel’s case, we have seen in the past how empty promises have left employees without an income,” Solidarity senior coordinator Derek Mans said. 

“At that time, it required intervention from Solidarity and legal action to try to resolve the situation after workers faced significant hardship.”

He credited sustained pressure from Solidarity for having served as a wake-up call for Denel to reconsider its decision regarding salary payments.

“We have not forgotten what happened in the past, and the warning lights are flashing again at Denel,” Mans said. “Urgent and drastic decisions about Denel’s future are needed to justify any renewed level of trust.”

The Congress of South African Trade Unions (COSATU) has also welcomed the payment of Denel workers’ salaries, saying in a 25 January press statement that this provides welcome relief to these hard-working employees and their families.

However, the union noted that it remains concerned about the state of these divisions and the broader Denel group.  

“Workers at these two divisions were informed earlier in the week that they may not be paid,” the union said. 

“Management needs to take workers into their confidence about the implementation of Denel’s turnaround plan, how the substantial financial support from government has been utilised, and what is being done to fulfill its backlog of orders to clients.”

COSATU called on the Ministry and Department of Defence, which oversees Denel, to actively fulfill their oversight role and “not simply rely upon good wishes and glossy presentations from management”. 

“This needs to include a close partnership with Armscor and the Department of Trade, Industry and Competition, as well as major domestic customers such as the South African National Defence Force, Police Service, Correctional Services and other law enforcement arms of the state and the private security and arms industry.”

The union said Denel can and must be turned around following “the dark chapter of state capture”, which significantly weakened the state-owned enterprise.

“Its turnaround will be an important catalyst to the revival of South Africa’s lucrative defence industry and the sustaining and creation of thousands of badly needed jobs,” COSATU said.