General Secretary’s Report

to

National Bargaining Conference

April 22 to 24, 2016

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3

The Context for the 2016 Bargaining Round ...................................................................... 4

1. The global crisis of over-accumulation ............................................................................... 4

2. Results of the crisis ........................................................................................................... 5

3. South Africa in the crisis .................................................................................................... 6

4. Let’s look at some basic data about the South African economy ......................................... 8

5. Illegal outflows of capital ................................................................................................ 12

6. Legal outflows of capital ................................................................................................. 14

7. Now I want to turn to look at wages - our wages and their wages. Let’s start with theirs: . 15

8. The South African crisis is not just a reflection of the global crisis. It is a direct result of the

neo-liberal agenda of the ANC / SACP government.................................................................. 17

9. Let’s look at the effect of the crisis on Numsa’s sectors in particular ................................. 18

10. So what are we demanding? ........................................................................................ 24

11. Now I would like to look briefly at our bargaining strategy ........................................... 27

12. This NBC must welcome the comrades from the new sectors. They are here because of

our ground-breaking decisions at our Special National Congress in 2013 .................................. 27

13. We support the challenge to the latest Eskom tariff increase ........................................ 28

14. Now let’s look at our traditional sectors: ..................................................................... 29

15. We are on the verge of launching a new federation ..................................................... 30

16. Finally, we must remember that Collective Bargaining presents a major opportunity for

the union to grow................................................................................................................... 30

17. So in summary ............................................................................................................ 31

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The Context for the 2016 Bargaining Round

1. The global crisis of over-accumulation

1.1. There is a global crisis of over-accumulation. We need to understand what that

means because it is an inevitable feature of a capitalist economy. And it is a

dominant feature of our current, global, capitalist economy.

1.2. It works very simply like this:

As we know, a capitalist economy extracts surplus value from us, the working

class. Capitalists use some of this for their own consumption, but the majority is

for re-investment in order to extract more surplus value.

So capitalism has to continue to grow in order to have places to invest the

surplus value which it extracts from us.

But a capitalist economy is unable to continue to grow forever. When it stops

growing sufficiently, there is no longer anywhere for them to invest the surplus

value.

This is what Marxists know as a crisis of over-accumulation. It takes place when

the surplus that capitalists have available to them cannot find a profitable place

to invest.

1.3. This is exactly what is happening now. It comes in two forms:

Firstly, it comes in the form of huge productive capacity which already exists. It

was built from the surplus value extracted from us. Now it cannot be profitably

used. We know about this in the steel industry. We have seen it in our own steel

industry. If we look at China, we see that it has the capacity to produce more

than one billion tons of steel. But its economy can only use half of that. So it

floods the rest of the world with its steel at rock bottom prices. The result is

closure of steel plants all over the world, including the US, the UK and of course

South Africa. The IDC reports that South Africa only uses 81.5% of its

manufacturing production capacity, down 1% in 2015.

Secondly, it comes in the form of capital which has no productive place to go to

make a profit. Again, we know that productive companies – manufacturing and

mining companies - have huge stockpiles of capital which they are not investing

in production. Instead they are finding other places to invest – shares, property,

other financial instruments. That explains why share prices on the JSE have been

rising while production has been declining. While commodity prices crashed, the

JSE boasted a 15% average annual return from 2011-15. Only 12% of the JSE is

mining shares.

1.4. The most notorious historical example of this kind of crisis was the Great

Depression of the 1930s. That was when the world witnessed one way to solve

the crisis of over-accumulation – destroy productive capacity in a global war. By

the end of the 1930s, there was no longer a crisis of over-accumulation. There

was a war which lasted 6 years and killed 45 million civilians and 15 million

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soldiers, as well as wounding a further 25 million soldiers. So, not a very good

solution.

2. Results of the crisis

2.1. We see the results of this crisis all around us:

Unemployment is the most obvious symptom. We have seen unemployment rise

not only in South Africa, but across the world.

o In 2013 global unemployment was 7.5%

o Last year it was 8%

Global GDP has risen, but so has the world’s population. So global GDP per

person (what they call per capita GDP) has fallen. In 2014 it was $16,700 per

person. In 2015 it was $15,800.

China’s GDP, which has been driving much of the rest of the world’s economies,

has been slowing down since 2013:

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Banks and financial institutions have crashed or come close to crashing. So

capitalist states have bailed them out and taken over their unmanageable debt.

The result is that public debt has increased massively.

Someone has to pay for the increasing levels of debt. The result has been

austerity – there have been cuts in public expenditure to reduce the debt. Cuts

in public expenditure overwhelmingly hurt the poor – the rich buy their own,

private services. They don’t need public services.

3. South Africa in the crisis

3.1. South Africa is suffering in particular from this crisis because our economy has

remained dependent on the sale of minerals.

In a crisis such as this, demand for minerals declines very sharply.

o You can see on the screen the steep decline in the volume of coal produced

in 2015

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o Platinum mining production was very low in 2014, because of the protracted

strike. But even in 2015 the levels are way below the 2011 levels.

We have seen this in the dramatic drop in mineral prices. For example coal has

dropped from nearly 140 dollars a ton in 2011 to under 60 dollars a ton this

year.

We know that when demand declines, prices also decline.

The capitalist economy always responds in the same way: reduce output in

order to restore profitability.

So we are seeing the shutting of productive capacity, in mining and downstream

processing and manufacturing.

Look at Anglo American Corporation. It was Africa’s largest company for the past

century. The share price today on the London Stock Exchange values the

company at 8% of what it was worth in 2008. Or look at Glencore which has

dropped to less than 20% of its value. Poor Ivan Glasenburg, the CEO, is

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experiencing real suffering: his shares used to be worth 10 billion dollars. Now

they are worth a mere $1.7 billion.

When there is a decline in mining, manufacturing also suffers.

3.2. The ANC government wasted a huge opportunity during the years of the 2000s.

Until 2008, the world experienced what has been called the ‘super cycle’ for

mineral production. Production increased enormously and profitability increased

with it.

In 2012, we reported to this Central Committee the profits of the 3 largest

platinum mining companies at the time: Lonmin, Implats and Anglo Platinum.

Between 2006 and 2011, these 3 companies made a profit of 160 billion Rand.

This was the slide we showed you then.

That profit should have been used to capitalize industrialization based on the

beneficiation of South Africa minerals. Instead, the ANC government removed

exchange controls and allowed the companies to list overseas. The result was

that these super profits were poured into the pockets of overseas shareholders.

4. Let’s look at some basic data about the South African economy

4.1. Firstly growth: You can see from the chart on the screen how GDP has declined

over the last 3 years: from 2.9% in 2013 to 0.6% last year. In 2013, the DBSA said

that we need a GDP growth rate of 10% or more every year to meet the New

Growth Path's target of 5-million jobs by 2020. Instead of moving towards 10%,

the ANC / SACP government has taken the economy backwards.

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4.2. Secondly inflation: at the last NBC in 2013, CPI was 5.9%. At this NBC CPI is 6.3%.

But we know that CPI is not a true measure of inflation, especially for the working class

and the poor. Let’s look at some others. PACSA (The Pietermaritzburg Agency for

Community Social Action) produces a Food Price Barometer. According to that

barometer:

In 3 months, from November 2015 to January 2016, the price of their basic food

basket increased by 9%.

The year-on-year increase for Jan 2015 to Jan 2016 was 14.6.

Some of the biggest increases have come in some of the most basic foods:

o Mealie meal 21.2%

o Samp 36.2%

o Cooking oil 38.8%

o Potatoes 120%

4.3. Thirdly the currency: the Rand lost 33% of its value during 2015. On January 1

2015 one Rand was worth nearly 11 US cents. By the end of the year it was worth

less than 7 cents.

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In the 48 hours immediately after Zuma fired Nene, an estimated 28 billion

dollars’ worth of local financial assets evaporated, as investors fled.

Financial institutions suffered the worst. First National Bank, for example, lost

10% of its stock market value.

The advantage of a weaker rand is that it makes exports cheaper and therefore

more attractive. The South African economy has been unable to make use of this

advantage because of the destruction of manufacturing industry. Meanwhile, of

course, imports are much more expensive. That includes large amounts of maize

because of the drought. It also includes those components that must be

imported for OEMs.

4.4. Fourthly the debt: we reported at the 2013 NBC that SA’s foreign debt had risen

from 25 billion dollars in 1994 to 135 billion dollars in mid-2013.

If you look at South Africa’s debt today in US dollars, the situation seems slightly

less bad than in 2013. The debt has fallen slightly to 124 billion dollars by the

end of 2015.

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But we have to remember that the value of the Rand has fallen. We have to pay

off our debt in the Rand that we earn. And the debt in Rands is much worse –

from R1.3 billion in 2013 to R1.9 billion at the end of 2015. That’s an increase of

49%.

4.5. Fifthly, the investment strike:

Production companies are still holding more than 1 trillion Rand in non-

productive investments in the finance sector.

This is money that should be invested to produce goods and jobs which South

Africa needs.

It lies idle because, as you can see from the slide, companies can make more

money investing in financial instruments than in production.

4.6. Number six, the drought:

On top of these fundamental issues, the severe drought there has been a

massive decline in agricultural production:

o It fell by over 8% in 2015

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o It fell by over 14% in the last quarter

o It led to a loss of 37,000 jobs in the last quarter of 2015 alone

The impact of the drought will be dramatically worsened by structural problems in

the economy. The weak Rand is a direct result of the failure of the ANC / SACP

government to restructure the economy. As a result of the weak Rand, the cost of

importing the 3.8 million tons of maize we will need in 2016 will be much higher,

which in turn will increase the debt, damage the balance of payments and cause

further weakness in the Rand. This government is leading us on a steep and slippery

slope to junk status and beyond.

5. Illegal outflows of capital

5.1. Some of you will have heard recently about the so-called ‘Panama Papers’. A

massive 11.5 million confidential documents from a law firm in Panama were

exposed on the internet. Panama is a tax haven. Tax havens are countries which

are different from other countries in two ways:

There is a very low tax, or even zero tax, on incomes, including company income

There is a system which protects the secrecy of all financial transactions

5.2. Big corporations use a number of different methods to export their income to

these tax havens so that they pay no tax on it. Here are just two of them:

They “sell” the product from a South African subsidiary to a subsidiary in a tax

haven, at a very low price. Then their subsidiary in the tax haven sells the

product to the real customer at a much higher price. All the profit comes to the

company in the tax haven – and they pay no tax on it. Research has shown that

De Beers illegally exported 2.83 billion dollars like this between 2004 and 2012.

Another way they avoid tax is that a South African subsidiary pays a lot of money

in unnecessary sales commission and marketing fees to another subsidiary in a

tax haven. All this money is not taxed.

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5.3. The 2015 Global Financial Integrity Report says that the amount of money in the

world which escapes tax in these ways is 1.1 trillion dollars. That’s 15.6 trillion

Rand. Just to make that picture clearer, SARS collected 830 billion Rand in the last

tax year. So the money that is escaping tax in the world is equivalent to more than

15 years of South Africa’s tax revenue.

5.4. The GFI Report puts South Africa at Number 7 in the world for illicit capital

outflows. It calculates that we lost 1.6 trillion rand between 2004 and 2013.

Wits university economist, Seeraj Mohamed calculated that in 2007 23% of

South Africa’s GDP left the country illegally.

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GDP in 2007 was nearly two trillion Rand. So that means that 460 billion rand

left the country illegally.

If that 460 billion Rand was taxed at the company tax rate of 29%, SARS would

receive an extra R133 billion for SARS. That would pay for free education for all

students and a lot more.

6. Legal outflows of capital

6.1. It’s not just illegal capital outflows that are the problem.

6.2. We are always being told that we need more Foreign Direct Investment (FDI). But

we must look at the balance between the FDI that comes into South Africa and

the profits and dividends which go out.

6.3. We can see from this graph that every month, the balance is that capital flows out

of the country. The amount of profits and dividends leaving the country is greater

than the amount of FDI that comes in.

6.4. In 2014 and the first half of 2015 the balance was that 806 billion Rand left the

South African economy.

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7. Now I want to turn to look at wages - our wages and their wages. Let’s start with

theirs:

7.1. These are South Africa’s top wage earners for 2015:

CEO Company Total Salary

Alan Clark SAB Miller R152 million

Andrew Mackenzie BHP Billiton R113.4 million

Julian Roberts Old Mutual R90.6 million

Mark Cutifani Anglo American R80 million

Nicandro Durante BAT R77 million

Ian Hawsworth Capco R11.1 million

Johan van der Merwe Sanlam R62.4 million

David Constable Sasol R52 million

Whitey Basson Shoprite R50.1 million

Johan Rupert Richemont R49.4 million

Mark Cutifani’s wages increased from R16.8 million in 2012 to R80 million in

2015. That’s 376%.

David Constable of Sasol didn’t do so well. His increase was only from R31.8

million to R52 million. A mere 64%.

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7.2. Meanwhile, these are the median 2015 wage settlements in different sectors,

according to LRS. Between 6% and 10%

Industry Median increase % by

industry Jan to June

2015

Agriculture, hunting, forestry and fishing 7.4

Community, social and personal services 6

Construction 8.3

Electricity, gas and water 8.5

Finance, insurance, real estate and business services 8.3

Manufacturing 8

Mining and quarrying 10

Transport, storage and communication 7.8

Wholesale and retail trade and accommodation 7.3

7.3. What you see below is why we talk about South Africa’s apartheid wage structure

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8. The South African crisis is not just a reflection of the global crisis. It is a direct result of

the neo-liberal agenda of the ANC / SACP government

8.1. The ANC / SACP government has created our own, self-inflicted crisis.

They failed to transform the economy. The result is that South Africa is still

dependent on export of unprocessed minerals.

They removed exchange controls and allowed companies to list overseas. As we

have seen, this has facilitated the export of profits instead of their re-investment

in South Africa.

They hollowed out the state, allowing companies to make profit out of basic

services, and stimulating corruption

Through the Reserve Bank, they imposed high interest rates, which they had to

do because they removed exchange controls. This prevented economic growth,

which we have seen in our appalling GDP figures.

They enslaved themselves to the ratings agencies, promoting the interests of

global capital, not the needs of the people.

They required Eskom to operate on commercial lines, instead of seeing cheap

electricity as a way of promoting industrialization. An ordinary person is paying

336% more today than in 2007 - if you paid R100 in 2007, you will be paying

R436 today.

They have continued to promote the interests of the Minerals Energy Finance

Complex against the interests of the people. So, for example, both the state and

Transnet are investing hundreds of billions of rand on improving the

infrastructure so that even more minerals can be exported even more

efficiently:

o The state is investing in improving the rail line from Mpumalanga to Richards

Bay, to increase the amount of coal exported. Meanwhile, the price of coal

has dropped from R180 a tonne to R50 a tonne because of the global crisis.

So the railway line will not be fully used.

o Transnet is investing in rolling stock to carry the minerals

o The State is investing 250 billion Rand to convert the old Durban airport to a

container terminal for ships. Again, this is unnecessary infrastructure

expenditure. The existing capacity in Durban is sufficient. But of course huge

infrastructure projects are rich soil for the reaping of bribes and incentives.

They constantly praise themselves for all this infrastructure spending. But the truth

of the matter is that a lot of it is either unnecessary of directly against the interests

of building a vibrant manufacturing economy. The reason they promote

infrastructure spend is that these huge contracts are the best targets for looting and

corruption.

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9. Let’s look at the effect of the crisis on Numsa’s sectors in particular

I will start by looking at manufacturing in general. I will then show you figure for Numsa’s

sectors. For each sector, I will show production volumes.

9.1. Manufacturing in general

You can see from this graph that the volume of manufacturing production rose

slightly from the depths after the 2008 crisis. But it has stagnated over the last 3

years.

The value of manufacture goods imported into South Africa increased by 9.5% in

2015. 37% of imported manufactured goods came from China.

9.2. Paper and paper products

Production has stagnated over the last 3 years

Employment has dropped dramatically

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9.3. Base chemicals

Production volumes have increased

But employment levels have dropped substantially. Less people producing more

goods!

9.4. Rubber and rubber products

Production is down

And employment is down too

9.5. Plastic and plastic products

Production is down here too

And employments is down too

9.6. Glass and glass products

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Production dropped dramatically in 2014 and has not recovered

Employment has continued to decline

9.7. Basic iron and steel products (that’s ferro-alloys and steel)

Production volumes dropped dramatically last year

Employment is dropping, as we know from bitter experience at Highveld Steel,

for example

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9.8. Basic non-ferrous metal products

Again there is a steep decline in 2015

Employment follows production downwards

9.9. Metal products excluding machinery

Production peaked at the end of 2013 and has been in decline since

Employment levels are down too

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9.10. Machinery and equipment

The same story – down in 2015

And employment down with it

9.11. Electrical machinery

Interestingly, 2015 was a highpoint for production volumes

And employment levels grew in 2014 before declining again in 2015

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9.12. TV, Radio and Communication Equipment

Along with electrical machinery, 2015 was a year of growth back to 2014 levels

Jobs were lost in 2014, but stabilized in 2015

9.13. Motor vehicles and components

Aside from the sudden drop in 2013, from our strike action, production has got

back to 2012 levels, although there was a decline in 2015

Employment climbed in 2014 before declining steeply in 2015

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9.14. Other transport equipment (railways and aircraft)

Growth is static

Employment grew slightly in 2015 after falling in 2014

10. So what are we demanding?

10.1. From this situation, our analysis remains the same. There is no neoliberal solution

to the crisis of the South African economy and the suffering of the people that is

the result.

10.2. The only solution is massive state intervention in the economy, under working

class, democratic control.

10.3. The steel industry must be nationalized under democratic workers’ control:

There is no future for the South African steel industry as a small piece of a global

corporation. If ArcelorMittal remains part of the global ArcelorMittal

corporation, it will remain a servant of the needs of that corporation. It will only

produce what is profitable for that corporation. If ArcelorMittal can make steel

cheaper somewhere else in the world, it will close its South African plants.

The PIC / IDC must buy out ArcelorMittal South Africa at a heavily reduced price

because of its limited commercial value in the current situation

10.4. Meanwhile there must be tariff protection and anti-dumping measures. In

particular the steel industry needs protection from dumping of Chinese steel. The

Chinese steel industry is effectively subsidized by a variety of factors:

The value of the Yuan is kept artificially low, which makes the steel cheaper

outside China

There is no union organization to demand and achieve decent wages and

conditions

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There is a lack of measures to protect the environment against pollution and

destruction

We demand an immediate moratorium on all steel imports

10.5. The South African manufacturing economy must be protected so that we can

reverse de-industrialisation:

The system of ‘designating’ products for local production must be massively

expanded.

All products for basic needs must be produced in South Africa

Numsa’s number 1 demand in 2016 will be that component suppliers that have

been relocated to Lesotho and Botswana must be brought back into SA.

o Government must ensure that this happens through local content

requirements

o OEMs must make sure this happens by refusing to buy from component

manufacturers who have relocated

A review of the APDP can’t just be about the OEMs. It must achieve 2 things:

o It must support the South African component sector to increase local content

o It must guarantee a living wage to all sections of the industry

MIBCO rates are starvation wages. Captains of industry must work with NUMSA

and MIBCO to determine an appropriate living wage.

Import tariffs must be used to protect vulnerable industries. These tariffs should

include a requirement that importing companies re-invest in the South African

economy

10.6. Eskom must be decommercialised and directed to its proper function of producing

cheap electricity for the working class and the poor as well as for industry.

Electricity is a pre-requisite for industrial production. We must use it to create a

competitive advantage.

10.7. South Africa must move rapidly away from the carbon economy and champion a

just transition to a green economy. In order to move to a green economy we need

to do 4 things:

Cover the world with renewable energy, like wind and solar power, to make all

our electricity.

Switch from cars to buses and trains and run almost all transport on renewable

energy.

Insulate and convert all homes and buildings to use less energy and to heat and

cool using renewable energy.

Convert and redesign industry to use less energy and to use renewable

electricity wherever possible.

A programme such as this will create a huge number of new jobs – 120 million new

jobs a year globally for 20 years, according to one estimate. Using nuclear fuel to

produce electricity will produce almost no jobs at all, and will produce electricity

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that is far too expensive for people to use. Already the huge increases in Eskom

electricity prices have resulted in many people going back to paraffin and wood

because they can’t afford electricity.

This process must include a socially, worker owned renewable energy which:

Is collectively owned under democratic control

Includes a mix of energy parastatals, cooperatives and municipal-owned entities

Operates on the basis of a social mandate, not profit

Gets priority on the grid

As the French Marxist, Michel Lowy, said:

“The key ecological issues – such as the catastrophic process of global warming – are

intimately linked with the logic of the capitalist system. The expansion of capital, and

the destruction of the environment, are ‘combined’, and inseparable. Therefore, a

struggle to save the climate has to become an anti-capitalist combat; otherwise it is

doomed to failure.”

10.8. South Africa must pursue a wage-led growth strategy. We reject the false idea that

high wages damage the economy. On the contrary, high wages stimulate economic

growth, which we have seen is sadly lacking. This wage-led growth must include

immediate implementation of a living minimum wage.

10.9. There must be an end to the investment strike by South African capital. Prescribed

assets must be introduced for investors to ensure socially acceptable investment

patterns.

10.10. Exchange controls must immediately be imposed and interest rates lowered

to stimulate economic growth.

We cannot allow profits extracted from the social surplus to be exported into

the pockets of foreign shareholders.

It may be time to reinstate the Financial Rand of the 1980s. Under that system

there were two exchange rates. Investments made in South Africa by non-

residents could only be sold for financial rand. This was effectively a tax on

exporting capital and prevented the large scale export of capital that we have

seen since 1994.

10.11. There must be transformation of land ownership and use. ‘Willing seller, willing

buyer’ is simply a way of making no significant change. We must move away from

corporate agriculture and towards cooperative land use.

10.12. There must be a national housing strategy which covers all those who need

housing.

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At the moment a significant number of our members get no support for their

housing needs: they are deemed not poor enough to receive a RDP house. But

they are not wealthy enough to get a loan from the bank.

Until we succeed in nationalizing them, the commercial banks must fund a state

housing bank to give subsidized loans for housing.

10.13. The Reserve Bank must be nationalised and used to target employment creation

not inflation

10.14. There must be price controls and subsidies for basic goods and services

11. Now I would like to look briefly at our bargaining strategy

11.1. At our Special National Congress in 2013, we agreed to move towards value chain

organizing: that means organising all workers involved in making a product, from

beginning to end. As part of this, we are trying to persuade the employers to

move to a new structure which will have auto, components and tyre and rubber

under one umbrella organization.

11.2. We are proposing 8 sectors:

Automotive Manufacturing Industry

Motor vehicle and fuel sales services

State owned enterprises

Metal, steel and engineering

Mining

Chemicals and plastics

Goods and passenger transport

Security and cleaning services

11.3. Each of these sectors would have chambers for their specific industries

12. This NBC must welcome the comrades from the new sectors. They are here because of

our ground-breaking decisions at our Special National Congress in 2013

12.1. We will be wrestling to make sure that all the new sectors are organised. They must

get fair wage increases. They must feel the benefit of being Numsa members.

12.2. This is where we stand at the moment in membership in the new sectors:

Transnet: 10,000

SAA: 500

SAA technical and maintenance: 560

Prasa: 1000

SASOL: 700

Mining: 2,000

Road freight and logistics: 5,000

Security and cleaning

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Canteens: 500

Landscaping 200

Construction: 5,000

Bus 2,300 including

o Greyhound 183

o Autopax 786

o Golden Arrow 400

o Putco 524

o Algoa

12.3. There are a number of key strategic issues for us in State Owned Enterprises:

Firstly we must demand transparency of all contracts. The price of the contracts

and the companies involved must be public knowledge. This is the only way to

fight against perceived and real cronyism.

Secondly, we are working with all worker-controlled unions to make sure that

procurement is local and to create jobs.

Thirdly, we will also demand that we must be represented in SOE boards.

Fourthly, we call on all SOEs to stop victimising workers for belonging to Numsa.

This is a political witch hunt. They must grant us organisational rights. Transnet

has dismissed 3,000 fixed-term contract workers as part of this witch hunt. We

condemn this and we demand that workers must get their rights from the

amended LRA and be made permanent. We are demanding an urgent meeting.

Meanwhile, the CCMA will schedule arbitration on organisational rights for

Transnet.

We have noted changes of management and leadership in Transnet.

12.4. We have made significant gains in the new sectors:

We are already recognised in SAA and SAA Technical and we are in wage

negotiations.

We have secure organizational rights at Glencore and have elected shop

stewards at most of the 12 mines. We have 2,000 members

13. We support the challenge to the latest Eskom tariff increase

13.1. A number of companies have come together to interdict Eskom’s 9% increase.

They include Agni steels, Shatterprufe, Borbet, Sovereign Foods and Autocast.

They are applicants together with the Nelson Mandela Bay Business Chamber.

13.2. As Numsa, we reject this increase and any further increase. We also reject

Eskom’s threat to sell the Eskom finance company which currently gives low

housing interest rates for workers.

13.3. Eskom’s increases have caused serious problems for smelters, because electricity

is a very big cost for ferro-alloys companies. They are paying 80 cents per kilowatt

hour for electricity, while in China the cost is around 36 cents per kilowatt hour

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The ferro-alloys industry employs 200 000 people directly. More than 10 000

jobs have been lost

Scaw Metals lost 1,000 jobs last year; the City of Johannesburg charges 117%

above Eskom rates, and these are the rates that Scaw must pay

Production from Assmang has moved to Malaysia, resulting in the closing of

Assmang Machadodorp

13.4. A steel crisis task team was set up last year and organised labour and business

worked together to lobby government

This was successful in winning tariffs for some products and other interventions

It was able to stem job losses: there were a lot fewer workers retrenched, with

no retrenchments at ArcelorMittal for example.

The task team has agreed on demands to be presented to government including:

o A special dispensation for electricity prices for smelters

o A maximum municipal markup for big business

o A ban on export of chrome ore and scrap metal

13.5. Eskom management has tried to tell us that it has successfully dealt with load

shedding. This is simply not true. The drop in demand for electricity comes from

companies closing down, including smelters. Eskom has lost 11 billion Rand in

sales.

14. Now let’s look at our traditional sectors:

14.1. In the Auto sector:

2016 will be a difficult year. Workers want housing and industry medical aid as

well as an improvement on wages.

We are ready to engage as early as possible. We are not looking for a strike but

we anticipate that the employers may drag us there.

14.2. In the tyre sector:

As well as a wage increase, we have 3 other key demands:

o Firstly, effective measures from government to prevent tyre dumping. We

must also demand that the OEMs choose to source tyres from local

manufacturers.

o Secondly, an end to the system of ‘red-circling’. The total number of

employees in the industry is close to 7,000. 38% of these workers are red-

circled. This means that any increase they receive is not added onto the wage

for the purpose of calculation of benefits. This has been a problem for many

years and we will have to deal with and resolve it in a decisive manner.

o Thirdly, representation of salaried staff: at the moment they have no

representation and their increases are consistently below inflation

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14.3. In the Motor Sector

As I have said, our number one priority will be to stop and reverse the export of jobs

to other SADC countries such as Lesotho and Botswana and that is why it has

become urgent that we must promote worker to worker contact, union to union

contact. Who knows? Maybe Numsa and the rest of unions in the southern region

may come together in a regional union.

We will also resist the employers’ attempts to reduce wage levels to MIBCO rates.

The review of APDP currently under way, at the centre of it must be to cushion

component employers and revisit supply measures to support and protect small and

medium-sized, vulnerable companies.

15. We are on the verge of launching a new federation

15.1. We followed our Special National Congress resolution and did everything possible

to rescue the federation as a militant, independent federation. But we ended up

being expelled. We were expelled for consistently challenging the neoliberal

agenda and the massive destruction of jobs.

15.2. We have been vindicated by the consistent position we have taken. We have

always made clear that if you do not nationalize the commanding heights of the

economy, you are bound to fail. And when you fail, you will be bound to continue

and intensify the exploitation and oppression of the black working class.

15.3. The Numsa NEC finally agreed that there was nothing more we could do. There

was no turning back. It was time to begin to build a new federation.

15.4. On 30th April there will be a Workers Summit. We must move quickly to

consolidate the unity of the working class in militant action.

15.5. On Sunday the Special CC will also endorse the road map to the summit.

16. Finally, we must remember that Collective Bargaining presents a major opportunity for

the union to grow

16.1. As we win gains for our members, other workers see the real benefit of the union

16.2. We must remember our target of 400,000 members by National Congress at the

end of this year

16.3. Collective bargaining is a big opportunity to grow the union; we must use this

opportunity

16.4. We must recruit in the value chain. That includes our traditional sectors who must

recruit in their value chain. We are recommitting all shop stewards in all sectors to

deliver quality service and to recruit in the value chain.

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17. So in summary

17.1. The economy is in bad shape, both globally and in South Africa

17.2. But we are adamant that workers must not pay for this crisis which we did not

create.

17.3. The employers in our sectors must make real offers to settle. We will not

compromise our members.

17.4. We understand the state of the economy, but that doesn’t mean that we will just

lie down.

End the Economy for the 1%.

Forward to a living wage for all Numsa members, Forward