Macsteel accused of using pandemic to boost profit margins after retrenching 99 workers

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  • Steel manufacturer Macsteel has confirmed that it has retrenched 99 workers from different plants due to the pandemic.
  • National Union of Metalworkers of SA is picketing outside Macsteel branches calling for the immediate reinstatement of the workers.
  • NUMSA said the company was using the pandemic to boost profit margins.  

Steel manufacturer Macsteel has been accused by the National Union of Metalworkers of South Africa of using the pandemic as an excuse to boost profit margins after retrenching 99 workers.

NUMSA general secretary Irvin Jim said the union is demanding all retrenched employees should be reinstated with immediate effect.

The call came as the union embarked on countrywide picketing at all Macsteel plants in Eastern Cape, Western Cape, Mpumalanga, Gauteng and Kwa Zulu Natal on Monday morning.  

Jim said: "Our members are protesting against the fact that Macsteel has retrenched 99 employees during the Covid-19 pandemic. Our only demand is that all 99 employees who were forcefully retrenched by Macsteel must be reinstated immediately, under the same conditions they had before being retrenched."

Jim said it was inhumane for the company to retrench workers during a deadly pandemic, especially during Christmas, which is what the management did, he said.

"We are convinced that Macsteel is using the pandemic to boost their profit margins. They have previously retrenched workers and the savings they made from job cuts were used to pay managers and executives generous bonuses and packages. This is what has angered our members into embarking on this just strike, they are doing it in defence of jobs and the right to work," added Jim.  

CEO of Macsteel Mike Benfield confirmed the retrenchment and added that NUMSA's comments were "outlandish". 

Benfield rejected the union's demands, saying that Macsteel could not afford to hire back the retrenched workers.

"No. Our business models have changed, we are not going to compromise on these. We need to focus on the future to protect the jobs that remain. Those that remain employed and committed to the future of Macsteel will be fairly treated." 

Benfield also refuted the allegations that the company was retrenching workers to boost its profit margin.

"There is absolutely no substance to this allegation. Macsteel is faced with a very depressed steel sector and broader South African economy prior to Covid-19, which is now further exacerbated by the pandemic. Our only objective is to make the company sustainable in very tough trading conditions and our priority is to preserve the jobs that remain," said Benfield.  

Benfield confirmed that the company retrenched 99 workers following six months of consultation with unions and un-unionised workers.

He said that due to a tough economic climate in South Africa, Macsteel had to enforce massive staff reduction to stay afloat. 

"The woes of the South African economy and the steel sector in particular have been very well reported on over the last three years. Macsteel has had to adjust. In 2013 we employed 5 300 staff in South Africa. Today we will be employing approximately 2500. Our volumes have declined annually for the past five years to the extent that Macsteel sold and moved 40% less steel in 2020 than it did in 2015. No business can survive if it doesn’t change in that context," said Benfield.

* This article was updated at 17:10 on 18 January to include Benfield's comment. 

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