Coca-Cola South Africa set to cut hundreds of jobs

Motheo Khoaripe (in for The Money Show's Stephen Grootes) interviews labour analyst Andrew Levy and Zanele Sabela, national spokesperson for the Congress of South African Trade Unions (COSATU).

Coca-Cola Beverages SA (CCBSA) is the latest big corporate to signal it might be laying off workers in South Africa.

The beverage giant is reportedly planning to close its manufacturing plants in Bloemfontein and East London as part of a wider restructuring aimed at addressing financial challenges.

Business Day quotes a Food and Allied Workers Union (Fawu) spokesperson as saying they had received Section 189 notices from CCBSA in this regard on 2 September.

The soft drink bottling company employs over 7,000 people at 13 manufacturing facilities across the country.

Aside from the devastating consequences for affected workers and their families, this mooted jobs cut will have a disastrous effect overall, considering our high unemploymentrate, says labour analyst Andrew Levy.

He cites a number of important factors which have contributed to a spate of recent retrenchment announcements from big players.

"We've got the ongoing ArcelorMittal story, we've got Glencore, on Wednesday we had Ford, and now we have Coca-Cola... We know our economic performance has been poor. While the whole world has been through a difficult time from an economic point of view, I think the answer here lies more in immediate short-term political alliances and the perception of Western companies that there are more attractive places to put your money."

Andrew Levy, Labour Analyst

"And if you add to the inherent structural problems of poor logistics, the electricity supply which cannot be guaranteed, potential and actual problems with water, AND then corruption and productivity that continues to fall in our country... people are asking if this is an environment in which they want to be operating."

Andrew Levy, Labour Analyst

COSATU's Zanele Sabela notes that ArcelorMittal and Glencore have alluded to the high energy costs in South Africa, along with other constraints.

"ArcelorMittal has also said it has problems with transport costs... Transnet is working on that, and Eskom is almost on the way to recovery, but the fact is that those growing energy costs are an extra burden on companies."

Zanele Sabela, National Spokesperson - COSATU