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NEASA warns of massive job losses in South Africa’s steel and engineering sector
By GlobalZa
The National Employers’ Association (NEASA) warns of major job cuts in South Africa’s steel and engineering sector, citing high wages, protectionist policies, and rising costs that have cost 10,000 jobs in six years.
JOHANNESBURG, 9 Sept 2025- The National Employers’ Association of South Africa (NEASA) has issued a stark warning: the country’s steel and engineering sector is facing an existential threat that has already wiped out an estimated 10,000 jobs and could lead to widespread deindustrialization without urgent government intervention.
Citing a toxic combination of rigid wage laws, soaring operating costs, and ill-conceived protectionist policies, NEASA CEO Gerhard Papenfus revealed that the association’s membership has plummeted from 1,800 firms to just 1,500 over the past six years—a direct indicator of the sector’s rapid decline.
Key Factors Driving the Crisis
- Uncompetitive Wage Structures: The industry’s collective bargaining model, governed by the Metal and Engineering Industries Bargaining Council (MEIBC), heavily favors large corporations. Smaller firms are being crushed by unaffordable wage bills, making South Africa one of the most expensive countries in the world for steel industry labor and destroying entry-level job opportunities.
- Protectionist Policies Backfiring: Government import duties designed to shield ArcelorMittal South Africa (AMSA) from international competition have backfired spectacularly. These policies have artificially inflated domestic steel prices, crippling downstream manufacturers who rely on affordable raw materials to remain competitive both locally and globally.
- Cascade of Major Retrenchments: The crisis is not theoretical. The sector has been hit by a wave of layoffs in 2025 alone:
- ArcelorMittal: 3,500 jobs cut
- Glencore Mining: 3,000 jobs cut
- Goodyear: 900 jobs cut
- Ford Motors: Nearly 500 jobs cut
NEASA stresses that these figures only tell part of the story, as thousands of smaller, daily retrenchments at SMEs go unreported.
A Looming Socio-Economic Disaster
Papenfus emphasized that the crisis extends far beyond corporate balance sheets, posing a severe threat to South Africa’s social fabric.
“We cannot afford to have more than half of our population sitting idle. Youth unemployment is above 60%. Grants cannot replace the dignity and hope of earning a living,” he stated, cautioning that the current path could lead to greater instability.
He also forcefully dismissed growing calls from some trade unions for the renationalization of key industries, calling the idea disastrous. “If anyone believes the state can run these industries more efficiently than the private sector, they are mistaken. Protectionism and government intervention have already undermined competitiveness.”
READ: Lesufi launches Nasi iSpani 2.0 with 45,000 youth job opportunities in Gauteng
The Call to Action: What NEASA Says Must Change
NEASA is calling for immediate and decisive reforms across three key areas to avert a total collapse:
- Wage Mechanism Reform: Introduce more flexible wage-setting models that allow SMEs to create entry-level jobs and remain competitive.
- Industrial Policy Overhaul: Scrap counter-productive protectionist policies that punish downstream industries and stifle growth.
- Tariff Revisions: Review trade tariffs to ensure manufacturers have access to affordable raw materials, boosting export potential.
“The sector is bleeding jobs daily. Without decisive action, we face deindustrialization on a massive scale,” Papenfus warned.
The message is clear: without a fundamental shift in policy, South Africa’s industrial heartland is at risk of stopping beating, with devastating consequences for the entire economy.
