ArcelorMittal South Africa and smaller manufacturers, including the vehicle industry, are facing headwinds. Photo: Patrick Pleul/picture alliance/Getty Images
As the National Union of Metalworkers of South Africa (Numsa) prepares for its 2025 national bargaining conference (24 to 26 March 2025), we meet at a time of profound crisis for South Africa’s industrial economy and for the working class that sustains it. The conference convenes at a moment when not only are wages, jobs and working conditions under attack, but the very structure of collective bargaining and sectoral stability is being steadily eroded.
Although the most recent Quarterly Employment Statistics from Statistics South Africa recorded a net increase of 12,000 jobs in manufacturing in early 2024, this marginal gain masks the structural decline facing core industrial sectors. Smaller manufacturers, particularly in the vehicle components industry, continue to retrench or close because of high input costs, unreliable electricity, cheap imports and weak demand. These closures are not always reflected in aggregate national statistics, but their effect is deeply felt among the working class.
The broader context is bleak: food inflation in low-income households continues to exceed 10%, electricity prices have increased more than 500% since 2008 and workers now spend over 28% of their income on transport, according to the Pietermaritzburg Economic Justice and Dignity Group.
At the same time, executives continue to accumulate staggering compensation packages. ArcelorMittal South Africa (Amsa), which recently announced plans to shut down its long steel operations in Newcastle and Vereeniging, placing more than 3,500 jobs at risk, paid its chief executive, Kobus Verster, R10.6 million in 2023. Amsa’s planned shutdown of its long steel operations — originally set for completion in January 2025 but now under review — continues to pose a major threat to industrial sovereignty, as its closure would force South Africa to import key construction and infrastructure materials.
This collapse is not the outcome of global headwinds alone. It reflects a breakdown of coherent, enforceable industrial policy. The Steel Masterplan, designed to guide sector recovery, remains largely toothless. Its voluntary structure means companies can withdraw or delay compliance with no penalty. Similar patterns exist in smelting and fabrication, with high electricity tariffs and uncompetitive logistics driving disinvestment. The result is a dangerous erosion of our productive base — one that cannot be rebuilt overnight.
In the motor sector, Numsa represents tens of thousands of workers across dealerships, component manufacturers, service centres, panel beating shops and vehicle assembly plants. This sector has long been promoted as a key area of growth, yet workers continue to face long hours, insecure contracts and sub-inflationary wage offers. The South African Automotive Masterplan 2035 has set bold targets, including 60% local content and significant job creation. But in reality, local content remains stuck below 40%, and new jobs are not materialising at scale.
Numsa has repeatedly raised the alarm about companies exploiting tax breaks and incentives under the guise of localisation while importing components and squeezing workers. The vehicle industry is also deeply tied to global trade policy. While the African Growth and Opportunity Act (Agoa) gives duty-free access to the US for some vehicle exports, the European Union remains the larger market. As economist Duma Gqubule notes, losing Agoa access may not be catastrophic, but it underscores how fragile the motor sector remains. Without a coordinated plan that links procurement, localisation, skills and trade, the sector will fail to deliver on its promises to workers and the broader economy.
For Numsa, even the two increments of 0.5 percentage points is “a brutal assault on the working class,” as it shifts the burden of public revenue to the poor, while allowing capital and wealth to remain untouched. At a time when workers are battling escalating food, fuel and transport costs, raising VAT is not only economically regressive, it is socially inflammatory.
Numsa has called for progressive taxation that targets wealth and corporate profits, rather than deepening the everyday hardship of the majority. Simultaneously, Numsa has reiterated its legal right to organise across sectors beyond metal and engineering — a key affirmation of the union’s strategy as it defends and expands its bargaining footprint.
Compounding these pressures is the slow dismantling of national bargaining councils (NBCs). Over the past decade, employer associations have increasingly withdrawn from centralised bargaining or sought exemptions that weaken collective agreements. According to the Labour Research Service, nearly 40% of employers in NBC-covered sectors now sidestep these institutions. The result is a fragmented and precarious labour landscape, where workers are forced into individualised negotiations, informal work and greater vulnerability. National bargaining councils, once a core part of South Africa’s post-apartheid labour compact, are now being hollowed out in real time.
What is needed is not simply a defence of the status quo but a bold reimagining of industrial policy. South Africa must pursue an aggressive localisation agenda that ties public procurement directly to job creation, with firm commitments from industry players. Where firms receive public support — whether through state procurement, incentives or infrastructure — they must meet enforceable job retention and investment targets. The state must be prepared to take equity stakes in strategic industries and impose hard conditions on executive pay in struggling firms.
More promising signs are emerging in the electric mobility sectors. The government has allocated R1 billion to support local electric vehicle and battery production, with expectations to unlock R30 billion in private sector investment. This is a critical start, but it must be scaled up and integrated into a national industrial framework. Without significant investment in infrastructure, logistics, and energy stability, these new industries cannot succeed.
Skills development remains a crucial piece of the puzzle. South Africa’s youth face unemployment because of a mismatch between education and the demands of industry. Vocational training, technical colleges and real partnerships with manufacturers must be expanded to create pipelines into quality employment.
This year’s national bargaining conference must reflect the urgency of this moment. It cannot limit itself to routine wage demands and standard sectoral bargaining strategy. It must grapple with the real threat that bargaining itself is being made obsolete — through casualisation, deindustrialisation and the destruction of stable employment. If jobs vanish, if industries collapse, if bargaining is reduced to negotiating the terms of retrenchment, then the project of transformation is dead.
Collective bargaining must reclaim its place as a lever of economic justice. Not only for distribution, but for reconstruction. The economy must be rebuilt from the factory floor upward — not for the few who profit from the crisis, but for the many who live through it every day.
The working class did not create this crisis. We should not be asked to pay for it.
Mbuso Ngubane is the deputy general secretary of National Union of Metalworkers of South Africa. He writes in his personal capacity.
