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By Tanya Rosenthal
Major reasons cited by Iscor management for reducing the workforce are automation; improved information and methodology; improved skills; and product rationalization. Cost reduction has been another reason for reducing the workforce but, according to management, not a major reason. In sum the:
... imperatives of competition have led to a reduction in the size of the workforce. Since privatization we are more businesslike (Robertson & Viljoen, 1996).
Management began to focus on the company's core business, setting up joint ventures and subsidiaries. These moves put downward pressure on employment. Unskilled workers were most affected by the reduction in the size of the workforce; a trend reflected in the South African iron and steel industry as a whole (table 3).
Table 3. Employment by race in the iron and steel industry
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1988 | 1989 | 1990 | 1991 | 1992 | 1993 |
| White | 31 869 | 32 800 | 34 500 | 35 300 | 34 500 | 30 113 |
| Coloured | 2 248 | 2 500 | 2 300 | 2 400 | 2 400 | 2 019 |
| Asian | 993 | 1 100 | 900 | 1 000 | 900 | 851 |
| Black | 45 262 | 43 300 | 41 800 | 39 100 | 35 100 | 27 959 |
| Total | 80 742 | 790700 | 79 500 | 77 800 | 72 900 | 67 233 |
| Source: CSS. Labour Statistics. | ||||||
While unskilled workers have been most affected, the number of employees in indirect functions has also decreased. Management also suggests that the "de-racialization" of administrative systems had resulted in fewer administrators being required:
The new South Africa brought numbers down when for example we did away with separate departments looking after each racial group. Migrant labour had had a large number of hostel managers (Robertson & Viljoen, 1996).
The human resources department (including training) also shrunk considerably, from 1,900 employees in 1981 to 500 in 1995.
Two methods have been relied upon to reduce the size of the workforce. The first was early retirement. In 1992 Iscor offered a package to whites aged 50-63 years. The company had regarded them as "dead wood" since they were not performing and were limiting opportunities for young men who came to the conclusion that they would have no future in the company; 98% accepted the offer. This also enabled the company to move out employees who were more conservative and racist, but an unintended consequence was a loss of skills. The same package is now being offered to black employees.
The second means to reduce the size of the workforce was through subcontracting, which was undertaken to increase labour productivity.
We regard labour as a fixed cost and need only a portion of it as variable. We want a small permanent workforce (Robertson & Viljoen, 1996).
Iscor management wants unskilled cyclical work, such as cleaning, and peak load work, such as maintenance, to be contracted out. The resulting decrease in the number of employees will reduce costs. While unskilled workers are being made redundant, permanent workers are becoming multi-skilled, thus a core-periphery divide is forming with a core of skilled and multi-skilled workers being permanently employed and unskilled workers being subcontracted and used periodically. While theory would suggest that core workers should gain greater benefits from the company, NUMSA organizers report that this is not yet happening. The adversarial nature of industrial relations is evident in NUMSA's analysis of the beneficiaries of the subcontracting process. NUMSA claims it is white workers who have left Iscor who are able to buy assets sold by Iscor, work as consultants for Iscor, and run the subcontracted services.
Subcontracting raises a political question. It has created jobs for white workers. If things are privatized white workers can buy them. Whites remain with the benefits. Iscor is not selling to black employees. The old structure continues (Galeni & Nhlapo, 1997).
From the managers' point of view, employee resistance to subcontracting is the result of the way it was implemented. Management is satisfied with the strategy of contracting-out and points to lessons learned from the process of introducing subcontracting. It is important that the exercise be preplanned and that employees and unions be involved from the start so that any resistance can de dealt with and minimized.
Table 4. Number and distribution of employees at Iscor
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No. | % male |
| Indirect | ||
| Executive management | 1 | 100 |
| Senior management | 166 | 100 |
| Middle management | 1 158 | 91 |
| Admin. & support | 2 408 | 56 |
| Direct | ||
| Supervisors | 2 533 | 92 |
| Skilled workers | 10 199 | 94 |
| Semi-skilled workers | 5 288 | 96 |
| Unskilled workers | 4 990 | 96 |
| Total | 26 778 | 91 |
As a Government-owned parastatal Iscor has employed an exceptionally high proportion of white workers. A racial breakdown of job categories shows the continuing legacy of Iscor's "civilized labour policy" and the relative "success" of the white union's ability to exclude black workers from skilled jobs. Of the employees engaged in direct production, 12,000 workers are white and just over 9,000 are African. The fact that Africans constitute approximately 30% of Iscor's workforce accounts for the proportionately low membership of NUMSA (20%).
The vast majority of management positions are held by whites. Nearly 90% of skilled jobs are held by white workers while unskilled work is done almost exclusively by black employees. Two-thirds of semi-skilled work is done by black employees. Thus there is not only a division of labour along lines of skill according to race, but also a division of authority according to race (figure 3).
Gender and age distribution
The steel industry is male-dominated. Only 9.2% of the employees are women and they are primarily located in traditional "women's work" -- administration and support services. The highest position in the company held by a woman is in middle-management.
The majority of workers at Iscor are between the ages of 20 and 49. Following the early retirement programme for employees over 50 years of age, only one-eighth of the workforce are over 50 years of age (figure 3). Management reported that the average age of the management team has dropped by 15 years.
Education profile
Figure 4 shows that while almost half the workforce has secondary academic education (8-12 years schooling), almost one-third of the workforce has little or no education. A third of the workforce is illiterate.
As part of its programme to create a more stable permanent workforce, Iscor is attempting to get workers and their families to move closer to the company. Assistance in buying property is provided and training is given to workers' wives and children in skills such as sewing and cultivating vegetables. Although family accommodation has been built at the hostels, the initiative to bring families to these hostels has failed, according to a local NUMSA organizer. Instead, workers bring girlfriends from the township to live with them in the hostel. The hostels remain undesirable places in which to live:
The hostels are overcrowded and in some cases there is a lack of easy access to clean running water and flushing toilets. The hostels are so filthy that pigs couldn't live there. They are still divided on an ethnic basis and there is still violence in the Sebokeng Hostel3 (Lazarus More, 1997).
NUMSA has never supported the migrant labour system. Union officials demanded that hostels be razed to the ground, but this demand was rejected by membership. Migration for work remains deeply entrenched in many workers' lives and ideology. As an organizer explained:
People see Jo'burg as a place to work, even if we are living here. They say that they don't want to die in Jo'burg -- that they want to be buried at home [i.e. in the rural areas in the former homelands] (Galeni & Nhlapo, 1997).
In essence the characteristics of the current workforce can summarized as follows:
* A social structure in which power, skills, the divisions of labour, incomes and living conditions are racially defined.
* The relationship between managers and workers is structured by these racial divisions.
* The relationship between black and white workers is also structured by racial divisions which gives rise to racially-polarized forms of trade unionism.
* The labour market under apartheid was structured by State intervention to maintain a high level of migrant labour subject to distinct employment contracts and housing arrangements, and often restricted to particular kinds of work. The result was a racially segmented African workforce fractured along migrant-urban lines, which frequently overlaps with ethnic cleavages. These cleavages were accentuated by a range of apartheid policies including so-called "third force" activities by the South African security police. Not surprisingly, violence in the hostels between different ethnic groups broke out in the early 1990s.
The management strategy outlined below suggests a project radically to reform the workplace by:
* deracializing the structure of management and skills in the workforce;
* recomposing the skills structure of the workforce, both by training and recruiting, and by retrenching the unskilled sectors of the workforce; and
* seeking to establish more cooperative relations in the workplace.
The transition is likely to be characterized by contestation, tension and conflict as various groupings among workers and management are affected differently by management's attempts to reform the historical social structures of the workplace.
3 Sebokeng hostel is a hostel in the local township and is run by local government.
