Numsa strike latest economic blowComment on this story
Johannesburg - A strike by more than 220,000 engineering workers, hot on the heels of a crippling platinum boycott which ended last week, will deal a fresh blow to an economy that contracted in the first quarter.
Members of the National Union of Metalworkers of South Africa (Numsa), the country's largest union, were downing tools on Tuesday and gearing up for protest marches after last-gasp talks failed to yield a deal on wages and other issues.
The union's members would take part in marches from 09:00 SA time in several cities including the commercial capital Johannesburg, Cape Town and Durban, Numsa spokesman Castro Ngobese told Reuters.
“There are no talks at the moment and none are scheduled,” he said.
Numsa will also picket the headquarters of power utility Eskom on Wednesday to press for a wage increase of 12 percent, nearly double the current inflation rate.
Employers have offered raises of up to 8 percent.
Ngobese said a report by public broadcaster SABC that Numsa has revised its wage demand down to 10 percent “was not true”.
Eskom produces the bulk of electricity in Africa's most developed economy and is deemed an essential service, making strikes illegal.
But Numsa General Secretary Irvin Jim hinted at the weekend that workers would defy the ban, saying the union might have “no option but to allow our members to liberate themselves”.
The strike will likely hit the operations of companies like constructing and engineering firms Murray & Roberts and Aveng, both involved in building two crucial power stations for Eskom.
FRESH BLOW TO ECONOMY
Auto parts makers such as Dorbyl, Africa's biggest packaging firm Nampak and power cables maker Reunert could also be affected.
The total turnover of the metals and engineering sector in South Africa is 335 billion rand, according to the Steel and Engineering Industries Federation of Southern Africa.
The looming boycott is a fresh blow for the economy, which lurched into a contraction in the first quarter after a five-month platinum strike hit mining output.
Mining contributes 5 percent to gross domestic product.
Steel and metals manufacturing directly accounts for about a fifth of the factory sector, and the impact of Numsa action will probably be stronger than that of the platinum strike, Barclays Africa said in a note.
The rand currency was little changed in early trade, fetching around 10.64 US dollar.
Numsa, once a political ally of the ruling African National Congress, fell out with President Jacob Zuma's government over policy differences last year.
The union claims around 340,000 members, although only around two-thirds of these are planning to go on strike. - Reuters