THOUSANDS of desperate retrenched workers are queuing up for unemployment benefits as the global economic recession bites hard in the Eastern Cape.
As the motor industry and other sectors shed jobs, the number of people seeking relief from the Unemployment Insurance Fund (UIF) has rocketed. Those dependent on UIF has increased by 20 per cent nationally – from 139000 to 168000 between 2007 and last year – and the situation is getting worse.
Long queues of unemployed people outside the Port Elizabeth regional labour department offices at Britannia Street in the central business district attest to soaring unemployment figures.
Labour Minister Membathisi Mdladlana, who is visiting the Eastern Cape, said UIF benefits had become “a temporary relief mechanism” for especially migrant workers‘ families.
With massive retrenchment on the mines, thousands of migrant workers have returned to their rural homes in the Eastern Cape.
Mdladlana will today hold an imbizo at Chief Ngqika‘s palace near King William‘s Town to assist members of the public to register UIF claims and file for injury-at-work compensation.
The UIF fund pays beneficiaries about R14-million a day and the figure is expected to increase dramatically.
Last year alone, more than R2-billion in benefits was paid out.
In a bid to fend off further job losses and company closures, motor industry representatives will meet Trade and Industry Minister Mandisi Mpahlwa on Tuesday to present a R10-billion bailout proposal for the industry. The National Association of Automotive Component and Allied Manufacturers (Naacam), National Association of Automobile Manufacturers of SA (Naamsa) and the trade and industry department yesterday confirmed the meeting.
DTI spokesman Vu- kani Mde said: “I can officially confirm that the minister is meeting Naamsa on the 24th. I don‘t know about Naacam, they could be together.”
Naacam chief executive Roger Pitot said the meeting would be between his organisation‘s president, Stewart Jennings, the Naamsa president, VWSA managing director David Powels and Mpahlwa.
Pitot said: “We want to request assistance for the motor industry. Government has to provide bridging finance. We estimate that we will need about R10-billion in loans. We also say the government should subsidise the interest rates for these loans. Interest rates in South Africa are much higher than the rest of the world. If government doesn‘t assist, we will lose a lot of companies and thousands of jobs.”
Naamsa chief executive Nico Vermuelen said the meeting was also aimed at briefing Mpahlwa on the state of the sector. “We will put a case for measures for the stabilisation of employment and measures to improve access to finance for suppliers and dealers.” They were the ones hit hard by the crisis. Yesterday, The Herald reported that General Motors planned to reduce its staff by a further 400 people, adding to the 1000 jobs cut through voluntary retrenchments last year.
Last month, VWSA announced it would offer voluntary packages to 400 workers and a three-week production cut. There have also been job cuts at Ford here and at its main plant in Pretoria.
It was reported yesterday that Mercedes-Benz SA in East London is planning a month- long production cut.
Source: The Herald