The South African Federation of Trade Unions (SAFTU) notes with deep alarm the latest figures released by Statistics South Africa showing a 1.0% decline in manufacturing production and sales in November 2025 compared to November 2024. Far from being a routine economic fluctuation, this sustained contraction signals a deep structural crisis in South Africa’s manufacturing sector, one that continues to destroy jobs, suppress wages, and erode the country’s productive base.
Manufacturing has historically been the backbone of South Africa’s economy, a driver of employment, exports, and industrial transformation. Yet today, it stands on the brink of collapse. The latest data reveal major contractions in wood and wood products, paper, publishing, and printing (-7.9%), basic iron and steel, non-ferrous metal products, metal products, and machinery (-2.5%), and motor vehicles, parts, and accessories (-4.4%). These are not peripheral industries; they are the foundation of industrial development, supporting millions of livelihoods directly and indirectly.
This continuous decline reflects the failure of the government’s economic management, driven by austerity, privatisation, deregulation, and trade liberalisation without protective industrial policies. Instead of a developmental state steering investment toward reindustrialisation, public policy has been subordinated to market forces and investor confidence, undermining long-term growth.
The human cost of this policy failure is staggering. Each contraction in manufacturing translates into factory closures, retrenchments, and the further casualisation of labour. Workers face shrinking hours, stagnant wages, and growing household debt, while the rising cost of living compounds their suffering. In recent months alone, multiple industrial employers have announced retrenchments of alarming proportions:
• Ford South Africa announced over 470 retrenchments at its Silverton and Struandale plants.
• Coca-Cola Beverages South Africa cut 680 jobs and closed plants in Bloemfontein and East London.
• Aspen Pharmacare began restructuring that threatens hundreds of jobs in Gqeberha and East London.
• ArcelorMittal South Africa (AMSA), once a cornerstone of national industrial development, has ceased its long steel production at Newcastle and placed several facilities into care and maintenance, following years of decline.
• Transalloys, the country’s last remaining manganese smelter, has issued retrenchment notices to its workers, a devastating development that underscores the depth of South Africa’s deindustrialisation crisis.
The situation at ArcelorMittal South Africa (AMSA) epitomises the collapse of the country’s productive capacity. Once the anchor of South Africa’s steel industry, AMSA has succumbed to the combined pressures of high electricity costs, failing transport logistics, cheap imports, and government inaction. Initially, the company’s restructuring threatened the loss of 3,500 direct jobs and up to 100,000 indirect jobs along the steel value chain. Since then, the company has moved to expand retrenchments to nearly 4,000 workers, affecting Newcastle, Vereeniging, and Vanderbijlpark, the latter being one of the few remaining large-scale steel producers in the country.
Although the Labour Court ruled the retrenchments procedurally unfair and ordered NUMSA members reinstated pending renewed consultations, AMSA has appealed the judgment, further prolonging uncertainty for thousands of workers and their families.
The collapse of AMSA’s operations is not just a corporate failure, it is a national crisis. Steel is the foundation of manufacturing, construction, energy, and infrastructure. When steel production collapses, the effects ripple through the entire economy, increasing dependency on imports and weakening the domestic industrial base. Instead of stepping in to rescue the sector, the government has allowed strategic industries to disintegrate under the false promise that private investment will fill the void.
Equally alarming is the news from Transalloys, South Africa’s last operational manganese smelter, which has now issued retrenchment notices to its workers. The closure or downsizing of Transalloys would represent the final nail in the coffin for South Africa’s once-proud ferroalloy and manganese processing industry. For decades, manganese smelting has been a critical link between mining and manufacturing. The demise of this plant is not merely a private-sector issue; it is a stark indicator of a policy vacuum that has allowed extractive industries to dominate while value-added beneficiation industries are left to die.
The government’s failure to defend industrial production in both steel and manganese demonstrates a total abdication of its responsibility to protect strategic sectors vital to industrial sovereignty. Both cases illustrate how rising electricity tariffs, unreliable energy supply, crumbling transport networks, and cheap imports have combined with austerity-driven underinvestment to hollow out the country’s industrial base. South Africa is being pushed back into the colonial pattern of raw material exportation without beneficiation, a pattern that entrenches inequality, dependency, and unemployment.
The collapse of manufacturing is therefore not simply a cyclical problem but the outcome of austerity, liberalisation, and privatisation, economic choices that prioritise corporate profits and fiscal targets over national development. High interest rates have strangled investment; budget cuts have gutted industrial support; and privatisation has fragmented the state’s capacity to coordinate production. Meanwhile, the private sector continues to hoard over R1.8 trillion in liquid reserves, refusing to invest productively while communities and workers bear the costs of economic stagnation.
SAFTU rejects this economic trajectory in its entirety. It is anti-worker, anti-developmental, and unsustainable. South Africa cannot rebuild its economy while its factories close, its workers are retrenched, and its policies are dictated by capital and austerity.
We therefore demand:
- A state-led industrial strategy that rebuilds manufacturing capacity, supports localisation, and re-establishes public control over strategic industries such as steel, energy, and transport.
- Massive public investment in infrastructure, energy, logistics, and communications, to restore industrial competitiveness and create sustainable jobs.
- A moratorium on retrenchments in strategic industries and strict conditions on companies receiving public support, ensuring that no worker is discarded for the sake of profits.
- An end to austerity and the adoption of expansionary, worker-centred fiscal policies that prioritise employment and industrial renewal.
- Strong enforcement of labour laws to prevent employers from exploiting economic downturns to casualise or victimize workers.
The decline of ArcelorMittal and Transalloys sends a chilling message: South Africa is losing not just factories but its industrial base. If the government continues on this path, it will soon preside over a deindustrialised wasteland where mining, transport, and manufacturing once formed the engine of economic life.
SAFTU warns that workers will not remain silent while the productive capacity of the country is destroyed in the name of austerity and profit. We call on all unions, progressive movements, and working-class communities to mobilise for an industrial policy alternative, one rooted in public investment, democratic planning, and worker control.
Only a state-led programme of reindustrialisation under democratic worker control can halt this spiral of decline. South Africa’s recovery depends on reclaiming its productive base, rebuilding public ownership, and putting people, not profits, at the centre of economic policy.
A statement was issued on behalf of the SAFTU General Secretary Zwelinzima Vavi.
For media inquiries, contact the National Spokesperson at:
Newton Masuku
newtown@saftu.org.za
0661682157
Media Officer
Asive Dyani
0719019564
