The South African Federation of Trade Unions (SAFTU) joined the National Union of Metalworkers of SA (NUMSA) on Friday to condemn Mercedes-Benz South Africa’s (MBSA) decision to sack 700 workers from its East London manufacturing plant.
They intend to cut 700 out of the 3,000 jobs.
In their statement, MBSA argues that: ‘deteriorating macroeconomic conditions, prolonged port issues, fluctuating exchange rates, and rising costs of fuel, energy, and logistics’ are responsible for their ‘woes’.
However, SAFTU said: ‘Contrary to Mercedes-Benz’s arguments, the primary reason for restructuring is underwritten by the need to keep profit margins afloat or maximise them.
‘Our claim is backed by the financial records of Mercedes Benz South Africa, which shows it recorded a 4.4 billion rands profit in 2023, an increase of 1.1 billion rands from a profit of 3.2 billion rands in 2022.
‘So, whilst the complaints about other economic factors are legit, they are not the primary reason for restructuring and retrenchments.
‘As their annual report shows, they are interested in ensuring continued growth of their profit margins.
‘If their transition from a 3-shift model to a 2-shift model will guarantee them value higher than the value they make today, it means workers’ exploitation will intensify and be prolonged.
‘It can only be intensified by bringing better machines and prolonged by extending the working day.
‘This exploitation is meant to achieve nothing but maximised surplus and profits thereof.
‘Further, it is incomprehensible that this company is embarking on retrenchments when the automotive industry is inundated with incentives from the government.
‘In addition to the grant incentive, these automotive companies are also benefiting from export tariff relief.
‘In 2014, Mercedes-Benz was one of the automobile companies that benefited from 493 million rands in tariff relief through AGOA.
‘The purpose of these government guarantees and incentives should help these companies not only rake in profits but also save jobs.
‘However, let us reckon with the negative impact of the port crisis and consumer demand decline.
‘Firstly, ports are central to the circulation of goods.
‘The crisis that has engulfed Transnet thus has a negative bearing on the circulation of goods.
‘This crisis will certainly contribute to lower sales of goods, leading to lower earnings and declining profit margins.
‘Acting capitalistically, firms are forced to cut operating costs to maximise their profits.
‘Secondly, demand is central to the existence of capitalism.
‘The interest rate hikes by the South African Reserve Bank (SARB) have particularly impacted demand for luxurious vehicles as the middle class is squeezed.
‘The middle class, which is the largest consumer base for luxury cars like Mercedes Benz, has suffered severely from the rising cost of living as debt servicing costs have ballooned, forcing them to reprioritise and cut their spending.
‘Mercedez Benz is certainly basing its plan on consumer demand expectations, which is shown by the consumer confidence that has declined.
‘It is however not true that the expectation of a decline in local consumer demand alone will be catastrophic to Mercedes-Benz’s earnings. Mercedes-Benz SA is exporting 90 per cent of its South African production.
‘This means its sales are not significantly affected by the rising cost of living that affects consumer demand in South Africa.
‘The amalgamation of these factors plays a role in impacting economic growth.
‘But this is not the case for Mercedez Benz, it is a reprimand we have repeatedly issued in our arguments against the government’s monetary and fiscal policy, and its bungling of rail freight.
‘Capitalism is based on sales, circulation and production, any interruption of these crucial stages create a crisis.
‘SAFTU firmly rejects retrenchments as a mechanism for profit maximisation.
‘Unemployment rose to 12.1 million in quarter 1 of 2024, and any sackings will exacerbate the crisis of unemployment.
‘The sackings will have severe consequences for the affected employees and their dependents.
‘With the high unemployment rate this loss of income will also plunge families into debt, and it will make it difficult for them to afford basic necessities.’
Meanwhile, The Congress of South African Trade Unions (Cosatu) has assured workers of efforts to defend their gains amid ongoing coalition talks and efforts to form a new government of national unity.
Cosatu will be meeting the ANC’s Central Executive Committee today (Monday) to make its input on the composition of the new government as part of the tripartite alliance of COSATU, the ANC and SACP (South African Communist Party) which met last Wednesday in Gauteng.
Politics and the reflections of the the general election dominated talks at the National Union of Miners (NUM) three-day policy conference which wrapped up in Boksburg, east of Johannesburg, at the weekend.
The NUM is one of the labour unions affiliated to Cosatu.
Workers attending the NUM Policy Conference strengthened their call for policy certainty and the protection of the working class in the new government that will soon be formed.
The NUM gathered over 500 union leaders from across the country for the national policy conference that sits every two years in between Congress.
The theme was to mark 41 years of unbroken revolutionary struggle for the workers.
The union says it is worried about the current political climate as it threatens gains made over 41 years.
But NUM’s mother body Cosatu has sought to allay fears.
The federation has met with the ANC and says it will form part of those who will be drafting a declaration post the formation of a new government.
Solly Phetoe, the general secretary of COSATU, said: Unfortunately, we did not achieve what we wanted to achieve in terms of the 50+1 percentage and the role of the federation in the current political situation we are facing is to continue to defend the interest of the workers.
‘Whatever is going to be agreed at the level of parliament or the agreement tomorrow and this is what we said to the ANC, we will not allow a compromising position towards the right of the workers.
‘What we appreciate is that now the Cosatu, SACP and Sanco, we are now going to be forming part of the negotiating team in terms of drafting the state of intent or declaration.’
- More than 50 former security guards picketed outside the R.K. Khan Hospital in Chatsworth, Durban on Wednesday to demand their jobs back.
The guards were sacked after participating in an unprotected strike last year.
They are among 174 workers that were employed by Mafoko Security to guard R.K. Khan Hospital, Stanger Provincial Hospital and Murchison Hospital.
The workers went on strike after their June 2023 salaries were not paid.
They were told that Mafoko’s contract with the hospital had not been renewed.
The company had a month-to-month contract agreement with the provincial health department.
Many of them were then hired by the new company that took over the contract at the hospital called Calvin and Family security company.
However, on 6th May many of the workers were informed that their contracts would not be renewed at the end of May.
Last Wednesday the workers told a press conference that they went on strike after the company ended their contracts and their attempts to get satisfactory answers were futile.
They said that they have been waiting for the company to address them, but they are worried because another company is already working in their place.
Former security guard Busisiwe Lushaba said she is worried how she will pay her rent this month.
She stated: ‘We always come to the hospital so that our boss can address us. If he decides that he doesn’t need us in his company then he must tell us.’
The owner of the new company, Calvin and Family security company, Calvin Mathibeli, said he has signed a three-year contract with the department.
Mathibeli said: ‘The contract I have signed is between me and the department.
‘I cannot be told by anyone who to hire. Some of those guards picketing do not have proper documents.’
Spokesperson for the KwaZulu-Natal Department of Health, Ntokozo Maphisa, declined to comment, saying: ‘The Department does not comment on matters that are between service providers and their employees.’
