ECONOMY: PCB acts to counter expected employment squeeze

2009-04-07 00:00

Pietermaritzburg manufacturing and engineering companies are feeling the pinch of waning local and global demand — and many of them are beginning to shed large numbers of jobs as a result.

The Witness has learnt that by mid-year, a shocking 1 000 jobs are expected to have been shed within a single group of 10 companies involved in the engineering trade in the city.

The 10 companies employed about 3 500 people at the end of 2008.

However, this figure is set to decline to about 2 500 by June this year, according to Graham Raynor, MD of engineering company Clifford Welding Systems, an exporter of capital equipment.

He told The Witness that the combined turnover of the companies concerned is expected to plummet to about R900 million from R1,3 billion — a 30% decline.

Raynor said a three-month process at Clifford recently culminated in the retrenchment of about 53 people at their Pietermaritzburg plant, which manufactures and exports a variety of machines.

The city’s employment numbers have undoubtedly come under tremendous pressure in recent months and this is expected to pose many social challenges.

In response, the Pietermaritzburg Chamber of Business (PCB) has set up a “skills pool”, which reflects the number of skills available in a particular area of interest.

The initiative is aimed at assisting people seeking re-employment opportunities.

“If those who have lost their jobs have to leave the city to find re-employment, we will be unlikely to get them back when our companies are in a position to employ them again,” explained PCB CEO Andrew Layman.

Following his meeting with senior municipal officials, Layman is hopeful that some unemployed locals may find “interim employment” in the local government sector.

The PCB has engaged personnel agencies within its membership to establish a “professional consortium” to deal with both employers and unemployed people.

Meanwhile, Raynor said Clifford underwent an intensive exercise aimed at surviving the year ahead.

“We looked at every expense and it was non-negotiable. The two areas were the ‘what’ and the ‘how’.

“We asked ourselves what we had to do to survive if we don’t get another order this year.

“The ‘how’ involved cutting every expense. Our thinking was ‘if you can retrench staff, you can retrench equipment’.”

Under Raynor’s leadership, the company has almost certainly ensured its survival this year and improved its cash-flow position.

Despite the challenges facing manufacturers, he is confident that local companies can survive the downturn.

kavith@witness.co.za

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