More than 220 000 National Union of Metalworkers of SA (Numsa) members in the engineering and metal industry will down tools indefinitely from 1 July.

The announcement follows a deadlock in wage negotiations between Numsa and employers. The trade union is demanding a 12% wage increase, lowered from its original demand of 15%.

Negotiations in the metals and engineering sector started three months ago with a two-day Pre-Bargaining Conference and concluded on Wednesday (25 June) without a settlement, following the declaration of a deadlock last month.

The Steel and Engineering Industries Federation of Southern Africa (SEIFSA) tabled a three-year wage settlement offer last week in an effort to bring a successful conclusion to the negotiations. The offer included a 7% all-inclusive, cost-of-employment increase in 2014. According to SEIFSA the unions involved in negotiations have not accepted the offer. Instead, they moderated their demand back to 15%, and only made their first real move to 12% this week.

SEIFSA Chief Executive Officer Kaizer Nyatsumba has expressed grave disappointment at the failure to conclude negotiations successfully. He pointed out that the South African economy has been seriously under-performing in recent years and that it could not afford a strike in the metals and engineering sector.

“Our economy contracted by 0.6% in the first three months of 2014, instead of growing, and some say that it is likely to shrink again in the current quarter. South Africa’s sovereign credit rating was downgraded by Standard and Poor’s from BBB to BBB- , just a notch above junk status, while Fitch downgraded South Africa’s economic outlook from positive to negative,” he said.

Nyatsumba yesterday expressed hope that the unions could still be persuaded to reconsider industrial action and to accept SEIFSA’s wage offer. “I plead that we work together to preserve jobs and to grow the metals and engineering sector in South Africa. Let us give those companies that continue to operate in the metals and engineering sector an opportunity to survive and fight another day in this ultra-competitive, low-margin environment.”