{"id":836914,"date":"2025-09-05T09:00:00","date_gmt":"2025-09-05T07:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=836914"},"modified":"2025-09-05T09:14:46","modified_gmt":"2025-09-05T07:14:46","slug":"disaster-for-south-africa-as-major-companies-buckle","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/836914\/disaster-for-south-africa-as-major-companies-buckle\/","title":{"rendered":"Disaster for South Africa as major companies buckle"},"content":{"rendered":"\n

Ford, Glencore and ArcelorMittal SA this week announced plans to cut thousands of jobs in South Africa, dealing a further blow to an economy contending with mass unemployment and lacklustre growth.\u00a0<\/p>\n\n\n\n

Industry in Africa\u2019s most-developed economy faces constraints, including a costly and unreliable electricity supply as well as increased competition from Asian manufacturers. <\/p>\n\n\n\n

The imposition of 30% tariffs on some South African exports to the US has exacerbated the challenges. Opposition parties and labor unions accuse the government of failing to stem an industrial decline.<\/p>\n\n\n\n

\u201cThis is a crisis,\u201d Matthew Parks, parliamentary co-coordinator for the Congress of South African Trade Unions, the country\u2019s biggest labor group, said in an interview. \u201cIt\u2019s incredibly scary.\u201d <\/p>\n\n\n\n

South Africa built its industrial base during apartheid, an era of institutionalized racial discrimination, by building Africa\u2019s biggest power and rail networks, and by taking advantage of cheap black labour. <\/p>\n\n\n\n

Industry accounted for 23.5% of output at the time of the first democratic elections in 1994, but the country\u2019s competitiveness has steadily been eroded and that figure now stands at 13%.\u00a0<\/p>\n\n\n\n

Labour costs have surged as unions have pushed for inflation-beating wages in a bid to narrow the world\u2019s biggest inequality gap, while the government has simultaneously enacted rigid labour laws that made it more difficult for companies to hire and fire. <\/p>\n\n\n\n

The unemployment rate stands at 33%, close to a record high.\u00a0<\/p>\n\n\n\n

Electricity costs have risen 600% since 2006, while freight-rail services have slumped and ports have become some of the world\u2019s most inefficient, limiting exports. <\/p>\n\n\n\n

The tariffs the US has imposed on South Africa\u2019s exports are the highest on goods from any sub-Saharan African nation, a reflection of President Donald Trump\u2019s displeasure with Pretoria\u2019s black-empowerment laws and foreign policy. <\/p>\n\n\n\n

The US is South Africa\u2019s second-biggest trade partner after China.\u00a0<\/p>\n\n\n\n

\u201cWorkers are paying the price for the government\u2019s policy mistakes and Eskom\u2019s tariff explosion,\u201d said Rian Visser, a deputy general secretary at the Solidarity union, referring to state power utility Eskom.\u00a0<\/p>\n\n\n\n

ArcelorMittal has begun closing steel operations that employ 3,500 people after nearly two years of negotiations with government failed to address its complaints about high input costs and competition from cheap imports and subsidized rivals. <\/p>\n\n\n\n

Job Losses<\/h2>\n\n\n\n
\"\"<\/a><\/figure>\n\n\n\n

Ford intends firing 470 workers at plants near the capital, Pretoria, and the southern coastal city of Gqeberha. <\/p>\n\n\n\n

And Glencore announced plans to start talks with workers about job cuts at power-hungry ferrochrome plants that it closed in May.<\/p>\n\n\n\n

Those retrenchments follow Goodyear’s firing of 900 workers after it closed a factory in Gqeberha in July, and Mercedes-Benz Group AG\u2019s axing of 700 staff at a plant in the nearby city of East London in mid-2024.\u00a0<\/p>\n\n\n\n

\u201cWe are caught between these high levels of de-industrialization and a terrible geopolitical chemistry,\u201d and the government doesn\u2019t have a well-thought-out industrial strategy that enables it to respond, said Irvin Jim, general secretary of the National Union of Metalworkers of South Africa, a union that represents most autoworkers. <\/p>\n\n\n\n

Some 70,000 companies entered liquidation and 2.8 million jobs were lost since 2000, research conducted by Haroon Bhorat, director of the Development Policy Research Unit at the University of Cape Town, found. The data is an \u201cunderlying indicator of de-industrialization,\u201d he said. <\/p>\n\n\n\n

The Department of Trade, Industry and Competition attributed the job losses to local market dynamics in some instances and global restructuring decisions in others. <\/p>\n\n\n\n

\u201cWhat we are witnessing is the destruction of the little industry South Africa has left, a collapse that will hollow out communities and deepen mass unemployment,\u201d the Economic Freedom Fighters, the country\u2019s fourth-biggest political party, said in a statement. <\/p>\n\n\n\n

\u201cThe government cannot continue to wash its hands while South Africa\u2019s industrial backbone is dismantled.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Ford, Glencore and ArcelorMittal SA this week announced plans to cut thousands of jobs in South Africa, dealing a further blow to an economy contending with mass unemployment and lacklustre growth.\u00a0<\/p>\n","protected":false},"author":59,"featured_media":829872,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[19235,1164,2042,9693],"class_list":["post-836914","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-amsa","tag-eskom","tag-ford","tag-glencore"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/836914","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=836914"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/836914\/revisions"}],"predecessor-version":[{"id":836916,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/836914\/revisions\/836916"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/829872"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=836914"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=836914"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=836914"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}