Our Maggie moment

The Numsa exit from the alliance is a natural consequence of what appears to me to be a ‘Maggie Thatcher moment’ in South African politics.

(This is a loose characterisation and it purely means that I believe there is evidence that government is taking a much harder line with the union movement and is backing the private sector to do the same. As you will see in the final slide I do not think it is strictly accurate to define this moment as Thatcherite, but I do believe the metaphor has some value i.e. that Cosatu is collapsing because the ANC under Zuma is forcing it to come into line.)

Below is an extract from a piece of my weekly news commentary published just after SONA 2014 … and below that are three slides from a presentation I delivered in November last year – thanks to BNP Paribas Cadiz Securities, as always, for allowing me to republish here.

Amplats to sue Amcu for strike related damages – various news reports (17/02/2014)

Several news outlets reported on Sunday that Anglo American Platinum (Amplats) will sue the Association of Mining and Construction Union for R591m. “The company seeks payment of damages caused by Amcu’s failures to adhere to the law, damage to property, increased costs to pay protection services staff overtime, and loss of production because non-striking workers were prevented from working” – Amplats statement quoted in the Sunday Times 16/02/2014.

So what?

I think a combination of factors are making it probable that the major platinum companies will use this strike to attempt to reset the balance of power between the companies and labour in the sector. The legal action by Amplats is probably part of such a generally agreed strategy by companies in the sector.

My reasoning includes the following supporting conjectures:

• Management will not want to again make the mistakes in made in 2012. The damage suffered by the platinum companies during that year – when unions appeared to push their advantage with little resistance or any coherent counterstrategy from management – led, in part, to the state clumsily stepping in, with Marikana the centrepiece of the gruesome consequences.
• (According to various media, for example the Business Day) the platinum market is in oversupply, the companies are cash flush and the rand is weak – an ideal combination of conditions that would assist the companies ‘digging in’ and waiting for Amcu to break.
•  It is increasingly clear that the union resources are stretched to the limit and strikers are carrying high levels of unsecured debt which makes both strikers and their union unable to last more than one payday

I am suggesting that the companies have tacit government support in taking a hard line with the strike. Amcu is, after all, the union that displaced key ANC ally Num and any strategy to break Amcu would probably be tacitly supported by the ruling party (although this is not something the ANC could admit to.)

Solidarity general secretary Gideon du Plessis put it best when he said Amplats’s action would restore the balance of power and send out a message that unreasonable pay demands and irresponsible union action would not be tolerated. He summarised Amplats’ intention as to “bankrupt Amcu and get rid of this militant and irresponsible union once and for all; or to send out a strong message to Amcu and all other trade unions that Amplats has had enough of union bullying; or to merely place Amcu under huge pressure to call off the strike and accept the final offer made by the companies.”

What is clear to me, is Amplats would only be behaving in the vigorous and hard-line manner if it has been given the tacit support of government. Zuma’s SONA2014 statement that “We cannot have industrial conflict that destroys the economy” is the visible spine of a deep seam of just such support.

… and then as part of the background that leads me to those conclusions, 3 slides from a presentation entitled “The Curate’s Egg” from November last year: