Photo: Twitter/DefenceWeb
Photo: Twitter/DefenceWeb
South African state defence firm Denel has told its employees that it won’t be able to pay their salaries for May, suggesting doubt over its ability to do so in the next few months either.
The defence firm said on Tuesday 29 May in an email circulated to employees that the recent financial upheaval caused by the COVID-19 pandemic had not spared them, and they told employees that due to a drastically reduced operational capacity, the company had suffered greatly.
June, July salaries unlikely either
Government have had Denel on its list of companies it needs to keep afloat through bailouts over the last few years, with a R1.8 million injection into the company coming in 2019, and a further R576 million bailout was announced in the budget speech in February.
The aforementioned support has not been enough to keep the military hardware supplier out of the red during this latest crisis though.
An internal memo from Denel group chief executive Danie du Toit said that the firm was forced to cut back its operations at a time when they really needed “all hands on deck”.
“Since the easing of the lockdown, we have been allowed to bring just 30% of our workforce back to production and have 19% of our people working from home while the remaining 51% cannot work at all,” he wrote.
“This has happened when we need all hands on deck to secure a successful turnaround for the business.”
“It saddens me to inform you at the moment Denel is not in a position to pay salaries for May.”
“June and July salaries are in serious jeopardy,” he writes.
Unions ready to strike
National Metalworkers Union of South Africa (NUMSA) General Secretary Irvin Jim said that Denel is simply “hiding behind the COVID-19 pandemic”, with the company having an “absolute disregard” for the wellbeing of its staff.
The union has said that it may engage in a protected strike action, according to DefenceWeb.
Helgard Cronje, co-ordinator for defence and aviation at Solidarity said that the case of Denel is a clear indication of why the lockdown needs to end.
“Solidarity believes the current lockdown regulations should be terminated to allow businesses such as Denel to generate income so they are no longer dependent on the state or have to rely on additional aid packages or bailouts.
“There is no need to choose between work and health; all businesses can open doors and allow workers to work without compromising their health. Many people are losing income and companies and businesses are suffering huge losses with catastrophic consequences for the economy.”
