Johannesburg - Members of South Africa’s biggest union turned down a new pay offer from metals employers and are continuing a strike involving more than 220 000 workers in the manufacturing and engineering industries.
“Workers have rejected” the latest pay offer from the Steel and Engineering Industries Federation of Southern Africa (Seifsa), Andrew Chirwa, the president of the National Union of Metalworkers of SA (Numsa), said.
Numsa is seeking a one-year deal, while Seifsa is offering to raise wages for the lowest paid workers by 10 percent in the first year of a three-year agreement.
The strike is set to enter its third week after the failure of the latest talks, which were mediated by the government. The stoppage is costing the industry about R300 million a day, according to Seifsa.
The strike is affecting as many as 12 000 companies including Nampak, Africa’s biggest can maker, car makers including General Motors (GM) and Evraz Highveld Steel.
Seifsa hadn’t had an official response from Numsa since making its new offer to the union on July 8, the employers’ group said on Friday.
The union has revised its wage demand to a 12 percent increase from 15 percent, according to Chirwa.
The inflation rate was 6.6 percent in May.
The strike “has the ability to really bring the economy to its knees if it is prolonged”, Jeffrey Schultz, an economist at BNP Paribas Cadiz Securities, said.
“From an economic impact point of view it is serious if this strike is prolonged,” Schultz added.
Manufacturing, which makes up about 15 percent of the economy, is already under strain after a five-month mining strike curbed factory output. Production fell 3.7 percent in May from a year ago, the biggest decline in nine months, the statistics office said on Thursday.
Finance Minister Nhlanhla Nene said a week ago that the economy probably wouldn’t grow as fast as the 2.7 percent estimated by the government in February.
“The longer the strike goes on, the bigger the impact will be, not necessarily across the economy but to some particular parts of the economy, particularly manufacturing,” Trade and Industry Minister Rob Davies said on Friday.
A production halt at GM’s plant in Port Elizabeth is in its seventh day as the strike affected the supply of automotive components, according to company spokeswoman Denise van Huyssteen.
Most of the vehicle makers had built up sufficient inventory to continue operating for two to three weeks, Nico Vermeulen, the director of the National Association of Automobile Manufacturers of South Africa, said.
Bloomberg