Jobs cuts loom in Nelson Mandela Bay

Nelson Mandela Bay’s unemployment rate of 32% is expected to rise as four major companies are in the process of retrenching staff and the local business chamber has lashed out at the lack of leadership in the metro, caused by an ineffective and inefficient coalition government.

Four major employers – Aspen Pharmacare, SAB, Goodyear and Educor – which combined employ close to 10 000 people have signalled that they will begin retrenchments.

Municipalities have the task of developing the economy and raising the standard of living of communities in regions under their jurisdiction and should lure investment and come up with innovative projects aimed at creating jobs.

However, this was not the case with Nelson Mandela Bay where both governance and infrastructure were collapsing as councillors bickered over petty issues, with most indulging in self-aggrandisement at the expense of the development of their region.

Nelson Mandela Bay Business Chamber CEO Nomkhita Mona, said they were “deeply concerned” about any potential job losses in the metro. Unemployment was already “alarmingly high”, she said.

“Nelson Mandela Bay has been plagued by political instability which has paralysed the region. The lack of leadership and chaos brought about by the ineffective coalition government has brought the city to a standstill.

“Locally, there has been hardly any economic activity as the basics have largely not been in place,” said Mona.

“The lack of investment and re-investment in the region,” said Mona, “is partly a function of the dysfunctionality prevalent in the metro. The key to securing investment and economic growth for any region relies on access to sustainable and affordable resources, such as water and electricity.”

She said that although the private sector created jobs, it was the government that was expected to create an enhancing environment for that to happen in.

If the municipality did not perform even the most basic functions of service delivery, businesses were unable to sustain jobs. This had led to business closures, she said.

“Businesses are forced to seek creative ways to survive in an economically depressed environment,” said Mona, adding that the business chamber had called on the Nelson Mandela Bay municipality to fulfil its mandate of delivering basic services to the region.

Goodyear had written to the metal workers’ union – Numsa – notifying it of pending retrenchments.

In the letter, the company said the tyre industry was declining and going through a rough patch.

“An adjusted headcount was necessary for the revised shift and production requirements. The situation is further exacerbated by the fact that the markets, which Goodyear is in a position to target, have also experienced an extensive influx of imported tyres at low cost, increasing the pressure on the company to reduce its cost per tyre,” said Marcelo Moreira, manufacturing director at Goodyear.

Numsa national treasurer Mphumzi Maqungo said the company intended to retrench about 200 workers. Numsa was still negotiating with Goodyear management.

“We received section 189 [of the Labour Relations Act – the intention to retrench] notices and we are engaging with management. We encourage the company to agree to a good retrenchment package mainly for old workers and leave younger ones at work. There are workers already in their sixties – those must be given good packages and we will agree that they go,” said Maqungo, adding that they had to be convinced that the company was not doing well operationally.

Food and Allied Workers’ Union (Fawu), which represents the SAB employees, said negotiations were still ongoing, with the company at the Commission for Conciliation, Mediation and Arbitration (CCMA).

In an interview with City Press, Mayoyo Mngomezulu, Fawu deputy general secretary, said: “Up to now, we do not know how many workers will be affected. The company first said 500, then it was 300 and now we are hearing 100.

“We asked them why they want to retrench. On Monday they made a presentation to the CCMA, which we also attended. They gave reasons for the need to retrench.

“We will respond to their presentation at the CCMA on March 15,” said Mngomezulu.

“They cannot just say they want to retrench. We want to see their financials and how their business and operations are going. We are still negotiating. It’s either they promote or demote workers rather than completely laying them off.”

Although Aspen said it was still negotiating with the workers’ union, sources close to the matter said the pharmaceutical manufacturer intended to retrench about 500 workers.

Shauneen Beukes, the company’s group communications manager, in a written response to City Press, said Aspen had embarked on a transformation journey to transition its South African manufacturing operations into a globally competitive, technologically advanced and sustainable business, enabling it to access a number of niche therapeutic areas.

“While a position can be determined only once the CCMA consultation process has been conducted and all options explored to minimise potential job losses, there is potential for some employers to be impacted.

“We are working hard to find suitable alternatives to minimise the impact of this process. We don’t take this lightly and it is as the last resort,” said Beukes.

It had been reported that Educor intended to retrench more than 700 workers. The company sent a memo to workers earlier this month notifying them about the impending job cuts. It gave poor enrolments and non-payment of fees as reasons for retrenchments.

On a positive note, this week the Coega Development Corporation announced that Treasury had approved seven infrastructure projects valued at R1.4 billion to be implemented by Nelson Mandela Bay.

Whether these will bring the much-needed jobs to this economically depressed area remains to be seen.

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