South African Arms Maker Fires Workers After Bailout Snub
South African State Arms Maker Fires Workers After Bailout Snub
(Bloomberg) -- South Africa’s insolvent national arms company wants to fire about 10% of its workers in a bid to survive after the government spurned its plea for a bailout.
Denel SOC Ltd., whose predecessor was established to bypass sanctions against the apartheid regime, has told 379 workers in its artillery, ammunition and armored-car divisions that they could lose their jobs, according to Helgard Cronje, a representative of labor union Solidarity. The so-called section 189 notice sent to the employees is a legal step needed before cuts can take place.
While South African Airways, the idled national airline, was allocated 10.5 billion rand ($683 million) in last month’s interim budget, other struggling state companies, including Denel, weren’t given financial assistance.
Government revenue has been sapped by the coronavirus outbreak and numerous bailouts for state firms that were plagued by mismanagement and corruption during the nine-year rule of President Jacob Zuma, who was ousted in 2018.
“Consultations between Denel management, labor and employee representatives have started,” Denel said in an e-mailed response to questions. “The company is considering rationalizing some positions.”
The Pretoria-based company has a workforce of more than 3,000, including contractors and students.
Denel is seeking to sell some units and find partners for others. In recent months it has struggled to pay salaries.
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