Seifsa CEO Lucio Trentini warns SA cannot afford another steel strike

In a bid to pre-empt a repeat of the crippling 21-day steel strike that cost R600m a day in losses, stakeholders gathered in Johannesburg for the Metal Industries Collective Bargaining Summit hosted by the Steel and Engineering Industries Federation of Southern Africa (Seifsa) in May.

In the energy-intensive metals & engineering sector employee costs make up 20% of total charges, but the compounding effect of loadshedding is set to be a grave consideration at the wage negotiations table in 2024.

Business Day caught up with Lucio Trentini, CEO of employer federation Seifsa, on the latest developments in the R900bn sector at the centre of the government’s economic recovery plan.

What did the recent Seifsa collective bargaining summit aim to achieve?

We find ourselves on the eve of the next round of collective bargaining, which for us is going to take place about this time next year. The preparatory work has already begun in terms of networking with the main players that constitute our bargaining forum, including six industry trade unions like Numsa, NUM and Solidarity, to try to conclude agreements that don’t bring the whole economy to its knees.

In the last round of collective bargaining in 2021, we concluded three-year deals but unfortunately, we had a bit of a hiccup and experienced a threeweek strike that was serious as it cost R600m per day in lost revenue, so we take collective bargaining seriously. So the purpose of the summit was to convene all stakeholders under one umbrella to talk about the state of our sector, what we want to do and, more importantly, what we want to avoid. At the end of the day, there is a realisation that business needs labour and labour needs business and we probably need each other more than we are willing to admit. The purpose was to set the tone for how we approach 2024’s round of collective bargaining.

Can we safely say another crippling strike like 2021 will be dodged in 2024?

One can never give an absolute guarantee but I think because our economy is effectively on the ropes, we are really at the end of a very dark tunnel. With load-shedding, an economy that’s struggling, the Covid-19 pandemic that we survived and what’s happening now with supply chain disruptions caused by the Russia-Ukraine conflict, I think that all the ingredients are there to avoid a strike in 2024. That’s certainly what both sides want.

But as one knows, both sides are accountable and have to receive mandates from their respective constituencies — the leadership of Seifsa and the trade unions understand what’s at stake and we want to settle without the prospect of another disruption to our economy, which has taken a battering over the past couple of months.

Could you outline the challenges facing the metals and engineering industry?

We spent a lot of time at the summit talking about the fact that our currency has taken a huge hammering over the past couple of months and agreed that the state of our sector is nothing to be happy about. Low infrastructure demand and service delivery failures put our industry on the back foot and with the less-than-positive economic environment we have seen job losses and many companies having to shut their doors. Just to give you an idea, 30 years ago the sector employed over 400,000 bluecollar workers and now we are down to 200,000.

I don’t even want to get into what load-shedding has done to this sector; we’ve had loadshedding every single day since October last year! We are in the real economy, we run factories, we are not in financial services

— we cannot run our factories on solar panels alone. Electricity through coal-fired power stations is the baseload for this sector. It’s tough times at the moment and collective bargaining is just one cog in a big wheel, but the problem is that, if that one cog stops, the economy comes to a standstill.

Does the steel master plan then come into play to address some of these challenges?

The steel master plan, which falls under the auspices of department of trade, industry & competition minister Ebrahim Patel, who enjoys the support of organised labour and business, is a blueprint for what we need to be doing. Still, it is a mediumto long-term road map. At the moment we are suffering from many short-term challenges that aren’t immediately going to be addressed by the steel master plan. It’s a tremendously important coming together of industry stakeholders but it’s not going to solve the next six months as we get into and through winter, but it does not mean we don’t take it seriously.

Notwithstanding the headwinds, where are the opportunities and prospects in the short to medium term?

This is a sector that is constituted by engineers essentially, and engineers are experts at identifying and solving problems. We have the ability, skills and resources to move the economic needle forward. There is, however, a lack of demand, as the government is not building the sort of infrastructure they’ve been promising over the past few years. There’s been a trickle in terms of infrastructure spending but if we opened that floodgate, this sector of the economy will reignite in such a dramatic fashion that the contribution that we will make to the growth of the economy and country will be phenomenal. For the first time in 80 years Seifsa had a one-onone with the president and his key cabinet members that make up the economic cluster and we’ve identified several key issues that we will be working collaboratively on.

What is your outlook for the metals & engineering sector?

It’s not positive; loadshedding is probably the major headwind the sector is grappling with. Next year is going to be tough but on the strength of the relationships that we have forged with organised labour in the sector, we will get through 2024 because there is no alternative, we have to ...