Thousands of South African jobs on the line

The National Union of Metalworkers of South Africa (NUMSA) is stepping in to try and prevent ArcelorMittal South Africa from cutting down its business – a move which the union says could result in job losses of over 3,500 people across multiple industries. 

Recently, ArcelorMittal South Africa announced it will wind down its longs steel business due to economic challenges, unsustainable competition, and weak financial performance.

This decision could result in the loss of up to 3,500 jobs and significantly impact the broader steel industry despite previous efforts to sustain operations and collaboration with the government.

In response, NUMSA is taking action to oppose the closure of ArcelorMittal South Africa’s long-steel plants. NUMSA has expressed grave concerns about how these closures would affect workers, local communities, and the wider manufacturing and industrial sectors.

The union is urging immediate government intervention, as they believe that shutting down these plants would not only worsen the already high levels of unemployment and inequality but also impede the country’s efforts towards industrialization.

Numsa Spokesperson Phakamile Hlubi Majola explained on the Kaya Biz podcast what NUMSA is trying to do as a union, more than anything, is resolve this. 

According to Majola, about 3,500 jobs are currently under direct threat, but the real effect is much wider.

She noted that if this shutdown happens, it would affect the auto sector, as well as component companies that rely on ArcelorMittal’s steel production.  

“It really is in our interest as a country to do something about the situation,” Majola said. 

“You’re possibly finding that you’re looking at more than 3,500 jobs that are on the line because if you’re looking at the value chain, the effect is often much more than that.” 

For this reason, NUMSA believes it is important for engagement to involve not only the labour unions, but all of the parties that will be affected. 

ArcelorMittal has expressed disappointment at the fact that the government has not acted, Majola said.

The company had already signalled trouble in December 2023 when it announced plans for retrenchments and issued a Section 189 notice.

In response, NUMSA initiated a conversation between themselves and the Department of Trade, Industry and Competition (DTIC) and the office of the presidency so they could engage with each other – “because the issues that they were raising were issues of policy”. 

South Africa’s stagnant economy has created a very challenging trading environment for the company, she explained.

“Manufacturing in South Africa has really suffered a lot over the last couple of years. We’ve deindustrialised a lot.” 

Despite promises from the President to turn the country into a construction site, that has not happened.

“If we’re not seeing that type of activity, then obviously it means that companies like ArcelorMittal, which are steel-making companies, are not going to generate the kind of revenue that they hope to make,” she said. 

She added that this situation has also been exacerbated by steel dumping from Asia into South Africa.

“What ArcelorMittal wanted was for changes in terms of policy. Changes that would result in more protectionism for local steelmakers so that they are able to compete because they’ve said that the environment for them is uncompetitive.” 

During budget speeches, the government often highlights its significant investment in infrastructure spending. 

However, NUMSA questioned why measures like export taxes – protection sought by ArcelorMittal to counter hostile conditions – weren’t implemented earlier, given their alignment with industrialisation and economic revitalisation policies.

This inaction by the government has led to dire consequences, Majola explained.  

“We are now facing a situation where 3,000 families are going to suffer extremely because they’re about to lose breadwinners. Those breadwinners are about to lose their jobs.”

“The inaction of the government has a direct impact on the lives of its citizens, and it is very disappointing that whilst promises were made, we’ve not seen them live up to those promises, and it’s affecting us,” Majola said.

However, she acknowledged that while the government is to blame, it also has the power to fix the situation. 

“We are at the point where it is going to require government intervention. If we’re going to throw our hands in the air and hope for the best, this situation is not going to change – it’s only going to worsen.” 

“We are literally watching a car crash happen in front of our eyes, and the state still has time to step in and can do something.” 

Majola explained that for South Africa, a country grappling with over 40% unemployment, including discouraged job seekers, the stakes are very high.

“We are also calling on the government to intervene and to do something because if we lose those jobs, the likelihood is that they will not be replaced.” 

This is especially true for areas like Newcastle and Vereeniging, which will be directly impacted by these job cuts since employment opportunities are already scarce. 

“If you lose a job like being employed at ArcelorMittal South Africa, in all likelihood, you are not going to get that another job elsewhere – and this is what we’re trying to prevent.”