NUMSA strike: Wage talks to resume tomorrow

By Zandi Shabalala and Tiisetso Motsoeneng

JOHANNESBURG (Reuters) – Wage talks between South Africa's largest union, NUMSA, and employers will resume on Thursday to end a strike by more than 200,000 engineering and metals workers, the union's head said.

Another prolonged stoppage would hit auto parts makers such as Dorbyl and dent investor confidence after a four-week strike last year by NUMSA cost the industry around $2 billion.

The NUMSA strike, which started this week, comes a week after platinum miners ended crippling five-month stoppage that sent Africa's most advanced economy into contraction in the first quarter of the year.

NUMSA is demanding wage increases of between 12 and 15 percent from more than 10,000 employers represented by the Steel and Engineering Industries Federation of Southern Africa (SEIFSA).

"We will be meeting for talks on Thursday night, the principle is a double-digit increase," its general secretary Irvin Jim told Reuters.

"We are dealing with workers who are earning as little as 5,400 rand ($500) a month, nobody can be able to live on that."

U.S car-maker Ford had no plans to pull out of South Africa, but the labour environment was a concern, said Jeffery Nemeth, chief executive of the company's local unit.

"This whole labour issue really doesn't help the global reputation of South Africa as a destination for foreign direct investment," he said.

"We are continuing to operate and for sure we will be fine through the end of the week and then we'll have to see what happens."

Scaw Metals, which makes more than 6 billion rand in annual revenue, said the strike would wipe out about 200 million rand worth of weekly sales and as much 33 million rand in weekly profit.

NUMSA picketed power utility Eskom's Johannesburg headquarters on Wednesday. The union has hinted it might strike at Eskom in defiance of a labour court order.

Jim said the union would not allow Eskom to "hide behind the law" but that for now its workers will not down tools there and restrict their protest activity to picketing.

The NUMSA strike has already affected work at Eskom's Medupi and Kusile power plants, where construction and engineering firms Murray & Roberts and Aveng Ltd are doing building work, the utility said.

As annual wage negotiations get underway in South Africa, clothing and textile union SACTWU said it had secured a 7.75 percent wage increase for its members, above the current inflation rate of 6.6 percent.