Arms manufacturer Denel is poised to lay- off 7 000 employees as new management
adopted “tough decisions” to recoup R1, 6 billion profit losses.
Shaun Liebenberg, the newly appointed chief executive officer who took over the reigns
from Victor Moche last June has recently announced radical restructuring plans. These
tough changes to Denel’s strategic directions include, among others, the closure and
disposal of certain operational sites, outsourcing and relocation of some company
divisions.
This emerged after recent company announcement that lack of supportive local industry
clients and limited access to international defence contracts had negatively affected
Denel’s financial performance and rendered operations not sustainable and non- viable.
But, the National Union of Metalworkers of South Africa (NUMSA) expressed disgust
that the new management sought to outsource or close down several divisions which
formed part of the core activities of Denel like Specialised Protein Product Limited
(SPP), involved in the production of Soya bean- based protein rich foodstuff or soldiers.
Now, Denel is geared to change the current business model within12-36 months to a
consolidated business entity in order to position itself for profitability and sustainability.
And, the company has conceded that it anticipated job reductions given that a
consolidated, “state of the art and world class facility is envisaged.”
Liebenberg, adopting his radical strategy pointed out that tough decisions had to be taken
since the arms manufacturer’s product lines were based on “wartime” funding and the
need for innovation of the South African National Defence Force (SANDF) and having
completed their useful life, needs for new technology replacements were not affordable.
Denel has rapidly lost skills do so, he said.
“To retain job opportunities, the SPP Company we proposed that should be strategically
located under health department to stave off job retrenchments. If it is disposed off, its
products would be too expensive in order to cream huge profits,” Bafana Ndebele
NUMSA chief bargaining sectors’ coordinator said.
Other divisional units considered for disposal include Dendustru, which provided
engineering services to heavy artillery manufacturing, Irenco- electronic and plastic
injection moulding products, Voltco- optical and laser products manufacturing and
Bonaero Park which is part of Denel Properties.
Bafana pointed out that the labour union’s concern was that destruction of more than 7
000 jobs out of the staff complement of 10 000, exposed Denel’s mission for what it is
“a Laager mentality institution” which was committed to create jobs for poor white
communities.”
“Now that restructuring is about to start it is inevitable that those labourers because they
were no longer poor whites, the company deems it fit to destroy their jobs and retain
artisans posts which were still maintained by estimated 3 000 whites,” he said.
Family lives look set for more suffering as the future of Somerset West and Kranskop
sites, Naschem (Boskop) site, La Forge (Boksburg plant), Phillippi plant (Western Cape),
Pretoria Metal Press divisional operations were being investigated whether they should
be retained or also disposed.
NUMSA will remain focused on anticipated job retrenchment talks and do more research
to avoid a crunch when 7 000 people were displaced, Ndebele added.
With an eye on global partnership, Liebenberg is committed to entrench his macro
strategy for Denel around global defence environment, which required experts and he
remain frank about the company not being viable under the present business model.
For more information contact:
Mziwakhe Hlangani, NUMSA national information officer
Mobile: 083 7293374.
E-mail address: mziwakheh@numsa.org.za