Another Month. Another Strike.

Given the small numbers of large firms which were affected, it was easy to understand the impact of the recent platinum strike. However, the engineering strike started by NUMSA today is less transparent, affecting a lot more smaller players, and with a knock-on impact.   It was therefore timely that steel trading, manufacturing and automotive group Argent briefed analysts today. The company has already suffered big losses through the recent platinum and automotive strikes, and says that from today about three quarters of its businesses are closed due to the latest strike. Meanwhile, there are indications are that there may be another automotive sector strike around September this year. The company says “strikes are by far our biggest risk.”   One response is a move to fewer workers and more machines “by pushing the automation button at each of our companies – that will reduce the head count.”

 

Conclusion:

Strikes have a short term effect on the economy – ZA may already be in a recession. They also affect exports, and in the longer term a seemingly successful strike leads to high pay and a smaller workforce. And we should not forget the violence which tends to overshadow ZA strikes, including loss of life.

 

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