UPDATE 3-South African metalworkers' union rejects pay offer, threatens wider strike

Sun Jul 13, 2014 1:17pm EDT

* NUMSA threatens to widen strike to other sectors

* Union says current wages exploitative

* NUMSA, employers to meet on Monday (Adds employer body reaction)

By Stella Mapenzauswa

JOHANNESBURG, July 13 (Reuters) - South Africa's metalworkers' union NUMSA rejected the latest pay offer from engineering and steel sector employers on Sunday, saying black workers were still underpaid, and threatened to widen its two-week old strike.

Industrial action by 220,000 NUMSA members, which followed on the heels of a crippling five-month strike in the platinum sector, has already forced General Motors to close its assembly plant in the southern city of Port Elizabeth.

Other companies affected are construction companies Murray & Roberts and Aveng Ltd, which are working on the construction of two major power plants for state power utility Eskom.

NUMSA is demanding a 12-15 percent annual wage increase for its members and on Sunday rejected employers' latest offer of a 10 percent increase this year, 9.5 percent in 2015 and 9.0 percent the year after that.

Irvin Jim, general secretary of the National Union of Metalworkers of South Africa, said NUMSA would not accept anything less than a 10 percent annual rise over three years at the very least.

"While we are fully aware of the state of the industry in the metals and engineering sectors we are also very acutely aware of the miserable conditions of life of the majority of the black and African working class who ... survive on extremely low, colonial and very inferior racist-inspired wages," Jim told reporters.

"We are making a very clear statement that the strike continues and we call on our members to intensify the strike."

That could mean calling 100,000 NUMSA members in other industries to join the strike as well.

"Should the employers continue with their reckless shenanigans and unreasonable demands, we might be left with no option but to call for targeted solidarity in all our sectors," he said.

The Steel and Engineering Industries Federation of South Africa (SEIFSA), which represents employers in the sector, said it was disappointed with NUMSA's rejection of what it called its "very good final offer".

"We have now done everything that we could possibly have done to end the strike," chief executive Kaizer Nyatsumba said in a statement, adding that the SEIFSA leadership had exhausted its mandate.

Jim said NUMSA was due to meet with employers again on Monday.

"NUMSA's militancy is a direct product of our rejection of the inhumanity of our work and super exploitative wages and conditions," he said.

"We remain committed to return to serious negotiations on the demands of our members."

ECONOMY UNDER PRESSURE

A continued or wider strike by NUMSA would put further pressure on South Africa's economy, which contracted in the first quarter of the year as the platinum miners' strike hit mining and manufacturing output.

A four-week strike last year by more than 30,000 NUMSA members at major automakers cost the industry around $2 billion.

Ratings agency Standard & Poor's cut South Africa's credit rating last month while Fitch put it on negative watch, both citing poor growth prospects mainly because of strikes.

Analysts have long singled out South Africa's volatile labour environment as a deterrent to investment.

SEIFSA has said the local head of U.S. vehicle maker Ford Motor was under pressure from head office to sell up its operations.

However, Ford, which has invested over 3.4 billion rand ($317 million) in two South African plants, producing its Ranger pick-up truck for the domestic market and for export to nearly 150 other markets, says it is committed for the long term. ($1 = 10.7090 South African rand) (Editing by Raissa Kasolowsky and Susan Fenton)

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