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The Citizen reports that according to defence expert Helmut Heitmann, problems at Denel have been exacerbated by the underfunding of the SA National Defence Force (SANDF), which is finding it hard to buy new equipment.
So financially stressed is the state-owned arms and defence equipment manufacturer that Solidarity’s Johan Botha has expressed concern that employees might not get their full salaries and bonuses by December, with the company canvassing solutions from the trade union. Explaining the crisis, Heitmann cited “a combination of factors”, one of which was the underfunding of defence. Describing Denel’s current financial situation as “a catastrophe”, he said: “It is not clear what caused the implosion from a company whose situation was improving. All I can ascribe it to is poor management at the very top, corruption or both. One element seems to have been an unnecessary expansion of head office structures that swallowed money unproductively.” Heitmann warned that if the government could not find funds to recapitalise Denel or find foreign investors, “the Denel group will implode fairly quickly”. He said only the foreign-owned divisions, Rheinmetall Denel Munition and Hensoldt Optronics, would continue operating, while the rest of Denel would disappear. “We will lose most of the 15,000 direct jobs and perhaps another 10,000 or so indirect jobs,” Heitmann warned.
- Read this report by Brian Sokutu in full at The Citizen
- Read too, Denel, Saudis in talks over possible investment, at The Citizen
Get other news reports at the SA Labour News home page