Trade union Solidarity has noted that steel producer ArcelorMittal South Africa (AMSA) has informed its employees that the company is preparing to close its long steel plants and to start mass retrenchments involving more than 4 000 people.

The trade union says these closures are the result of government’s inability to find solutions to the structural problems that fall under its control.

AMSA issued the notices in accordance with the requirements for formal retrenchment processes and they will start from September 1. According to the notices the plants could, therefore, close at the end of the month.

Solidarity says that, according to AMSA, this drastic step was necessitated after all attempts to keep the industry sustainable had failed.

In this regard, the steel manufacturer refers to problems such as rising import tariffs, insufficient tariff protection, excessive electricity costs, an expensive and dysfunctional rail transport system and a drop in local demand for its products.

“This closure is the direct result of the government’s inability to create a competitive industrial environment and to find and implement real solutions with a sense of urgency where such solutions fall within its control.

“For years, our steel industry has been plagued by power crises, a failed rail and ports system and a government that simply cannot make the policy decisions to protect our industries. Now the jobs and income of thousands are at stake,” says Solidarity deputy general secretary Willie Venter.

He cautioned that the retrenchments would not only affect the steel industry, but that all indications currently point to a “retrenchment bloodbath” that could hit several industries in South Africa.

“If major companies such as AMSA fail to stay afloat, the government should realise that the country is on the brink of industrial disaster,” he adds.

Solidarity warns that the closure of AMSA’s longs steel plants will have a ripple effect on downstream manufacturing, also affecting various other industries that depend on AMSA’s products.

Solidarity says it will support its members in the consultation process at AMSA and will use all legal and labour measures at its disposal to protect its members’ jobs and interests.

“We will not stand by and watch how thousands of families are robbed of their income because of the government’s failure.

“Solidarity will not only fight this bloodbath on behalf of its members with the employers involved and with the government, but will also assist affected members with, for example, other job protection initiatives to help mitigate the impact of this government failure,” says Venter.

Solidarity warns that this announcement made by AMSA, like the one issued by Ford last month, is just the beginning of more serious job losses if the government does not take urgent action now to protect the industrial sector and to restore stability.

The trade union notes that chrome smelters are also under extreme pressure while pressure on the mining sector is intensifying.

“The time for promises and conferences is gone. We insist on real action taken by the government. Without real action many more such dark days await South African workers,” Venter says.