General Secretarys Report to National Bargaining Conference April - - PDF document

General Secretary’s Report to National Bargaining Conference April 22 to 24, 2016

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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

• ur 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,

• ther 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.

• In 2013 global unemployment was 7.5%
• 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.

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

in 2015

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• 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

• rder 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

• ver 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:

• Mealie meal 21.2%
• Samp 36.2%
• Cooking oil 38.8%
• 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

• ff 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:

• It fell by over 8% in 2015

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• It fell by over 14% in the last quarter
• 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

• utflows. 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

• f 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:

• 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.

• Transnet is investing in rolling stock to carry the minerals
• 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

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

• utside 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.

• Government must ensure that this happens through local content

requirements

• 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:

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

• ur 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

• rganizing: 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
• ur 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

• Greyhound 183
• Autopax 786
• Golden Arrow 400
• Putco 524
• 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:

• A special dispensation for electricity prices for smelters
• A maximum municipal markup for big business
• 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:

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

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

• 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.

• 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

• pportunity

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