The impending closure of ArcelorMittal’s (AMSA) long steel furnaces in South Africa could wreak havoc on key industries in South Africa, particularly the automotive manufacturing sector.
The National Association of Automotive Component and Allied Manufacturers highlighted that AMSA’s shuttering could lead to the immediate dismissal of around 3,000 workers in the automotive industry, with the potential of 13,000 people losing their jobs within the following year.
Accounting for the rail, construction, and defence industries which are also AMSA customers, the association approximates that as many as 100,000 employees are at risk.
According to trade union Cosatu, one way to avoid this “disaster” is to sell of AMSA’s assets to a local company who would be more invested in staying in South Africa.
AMSA is a multinational conglomerate and its domestic operations are a very small piece of its entire pie. Its exit is therefore more based on checks and balances than a particular disdain for the country.
“ArcelorMittal shifts a lot of blame all over the place; I think one difficulty here is that this is a global company so their South African operations are really secondary, they look at the global price operations and so forth, and we’re really a very small piece on their chess board,” Cosatu Parliamentary Coordinator, Matthew Parks, told eNCA.
“For us, the simple solution is allow another company to go and buy the operations.”
Parks said “many companies” have already shown an interest in buying AMSA’s assets and urged the relevant stakeholders to prioritise such a deal.
“What we can’t afford is to close the local steel industry, the local motor manufacturing sector; that would be an absolute disaster that words can not even describe,” he said.
Fortunately, AMSA has vowed to build up a 12-month stockpile of long steel materials for its customers before it officially closes the doors at its Newcastle and Vereeniging furnaces, giving the country sufficient time to devise alternative plans.
Not the angel it portrays itself to be
While AMSA has lamented government policies and the collapse of key supporting sectors in recent years, including the country’s energy and transport divisions, Cosatu maintains that AMSA’s side of the story isn’t as squeaky clean as the company portrays it to be.
“[AMSA] would say that government hasn’t done X, Y, and Z. Some of that probably is true, but also when we talk to colleagues in the Department of Trade and Industry and listen to their responses, they will actually detail over the years how they’ve assisted ArcelorMittal,” said Parks.
“Listen to the Industrial Development Corporation how they’ve actually increased investments, cash injections, into AMSA’s operations; similarly, the Public Investments Corporation, how they’ve actually met with [AMSA] over the years, have helped raise their stakes, their shareholding, provided cash upfront and so forth; and, of course, we do know there have been real improvements around the Eskom front.”
While these solutions haven’t been perfect, they show that government was willing to play ball but that it didn’t always have an equally eager partner.
Regardless of whose to blame, Cosatu emphasises that a solution must be found to the AMSA impasse to protect local jobs, communities, and industries that depend on the steelmaker.
“If AMSA is not keen [to continue operating in South Africa], that’s fine, this is a democracy, but sell your operations and allow a local South African to come and buy it and they must see how they can improve things,” said Parks.
“We don’t think government should be the one buying it, government has got to manage other issues and clean up its own house, but allow a local company to take over and see how we can turn things around.”
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