South Africa Strikes Affects Construction Sites, Airline – Bloomberg

Workers at South Africa’s largest construction companies and its state-owned airline will go on strike starting tomorrow, extending labor disputes beyond gold mines and auto manufacturing.

The National Union of Mineworkers will lead a strike of 90,000 workers in the construction industry after wage talks with the South African Federation of Civil Engineering Contractors became deadlocked, union spokesman Lesiba Seshoka said by phone. The union is demanding a 13 percent pay increase for this year, while employers offered 7.5 percent.

Meanwhile, employees at automotive plants owned by Bayerische Motoren Werke AG and Volkswagen AG (VOW) will weigh an improved wage offer that may end a walkout that started Aug. 19.

South Africa has been wracked by labor turmoil since last year, undermining growth in Africa’s biggest economy. The rand has fallen by 17 percent against the dollar this year, making it the worst performer of 16 major currencies tracked by Bloomberg.

The FTSE/JSE Africa Construction & Building Materials Index, which groups six construction companies, has declined 5.1 percent this year. That compares with a 9.4 percent gain in the 166-member FTSE/JSE Africa All-Share Index. (JALSH)

Members of The South African Transport and Allied Workers Union will embark on a strike from 6 a.m. tomorrow at the technical division of South African Airways, according to union spokesman Vincent Masoga. The unit is responsible for on-site repairs and the refueling of aircraft at terminals across the country, including the O.R. Tambo International Airport in Johannesburg.

Minimize Disruptions

The airline has put measures in place to minimize disruptions, while asking workers to report for duty, spokesman Tlali Tlali said by text message today.

“We are optimistic that the employees will do the right thing and choose not to heed the call to go on strike,” Tlali said.

The mineworkers union has given South Africa’s gold producers, including AngloGold Ashanti Ltd. (ANG) and Sibanye Gold Ltd. (SGL), until Aug. 31 to improve on a wage increase offer of 6 percent for lower-level workers, Seshoka said.

The union, which represents 64 percent of workers in the gold industry, was given permission to strike after wage talks with seven mining companies became deadlocked, the Commission for Conciliation, Mediation and Arbitration said on Aug. 22.

“We remain open for talks and will listen if the employers present a better offer,” Seshoka said.

The union is demanding increases of up to 61 percent for entry-level workers. Strikes could cost 349 million rand ($ 34 million) a day in lost output, according to the Chamber of Mines.

‘Far Apart’

“We are very, very far apart; we are in severe financial difficulties as a gold-mining industry,” Elize Strydom, chief negotiator for the chamber, said in an Aug. 22 interview on Johannesburg-based SAFM radio. “We have to be prudent and do what’s right for the sustainability of the gold-mining industry.”

A week-long strike at seven main car plants across South Africa may be close to being called off after the employers tabled an undisclosed pay offer, the National Union of Metalworkers of South Africa said on Aug. 23.

The National Union of Metalworkers of South Africa will meet tomorrow to decide whether to continue the strike, according to Irvin Jim, the union’s general secretary.

“The strike will continue until further notice,” Jim said by mobile phone.

Construction and mining account for about 8 percent of gross domestic product, according to Statistics South Africa, while the vehicle industry makes up 7 percent of the economy, according to the Department of Trade and Industry.

To contact the reporter on this story: Andre Janse van Vuuren in Johannesburg at ajansevanvuu@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net


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