Numsa strike latest blow to ailing economy

Johannesburg - A strike by more than 220 000 engineering workers, hot on the heels of a crippling platinum boycott which ended last week, will likely keep South Africa's economic growth depressed below 2% this year.

Members of the National Union of Metalworkers of South Africa (Numsa) are due to down tools on Tuesday after last-gasp wage talks failed to yield a deal.

The union wants a 12% salary increase, the scrapping of labour brokers, and a one-year bargaining agreement.

Numsa members are expected to march in Johannesburg, Durban, Port Elizabeth, George, Cape Town and East London on Tuesday.

A deadlock in negotiations led to a notice of strike action from the majority Numsa, as well as the Chemical, Energy, Paper, Printing, Wood, and Allied Workers' Union, and the General Industries Workers' Union of SA.

Employers have tabled a three-year wage settlement offer of between 7% and 8% for different levels of workers in the first year, and CPI-linked increases for 2015 and 2016.

Numsa will also picket the headquarters of power utility Eskom on Wednesday to press for a wage increase of 12%, nearly double the current inflation rate.

Eskom 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 Aven, 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 R335bn, 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% 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.

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 has around 340 000 members, although only around two-thirds of these are planning to go on strike

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