The Denel Saab Aerostructures (DSA) board says it is “business as usual” at the company despite the resignation of CE Lana Kinley and chief financial officer Sasa Methola.
The board and DSA parent Denel in a statement today said operations have not been affected by the resignations and that there was no reason for any concern over the stability of the aerostructure manufacturing company. The Solidarity trade union raised the concern yesterday.
Denel Group CEO Talib Sadik (pictured) says the DSA Board will discuss the resignations and issue of succession on Friday “so as to ensure continuity at the company.” Further information will be made available after this meeting,” he says.
DSA has additionally confirmed in the statement that plans to effect the company’s turnaround continue to be implemented, with the consultation process regarding contemplated retrenchments having begun. Sadik has however denied that the retrenchments are partially as a result of the failure of the South African Government to place expected orders. “DSA is an export business,” he says.
“As such, export order cover determines the sustainability and ultimate profitability of the business. While the delay of the main A400M programme and a decrease in DSA’s empennage work on the Gulfstream G150 Business Jet have had a negative effect on DSA’s revenue stream, the business has experienced a number of other challenges, including weaker global demand as a result of the global economic crisis. This has resulted in DSA needing to be resized accordingly.”
DSA embarked on an aggressive turnaround strategy in March 2009 to streamline the company’s processes and maximise efficiency. “This has already resulted in significant operational improvements and correspondingly bolstered the company’s competitiveness. Implementation of the strategy is ongoing, and expected to yield further positive results,” the company says.
Sadik also described reports regarding the government’s financial support of the parastatal as “regrettable” – as incorrect figures were subsequently stated in the press. “The Denel Group has received R3.5 billion in financial aid through recapitalisation and R1.85 billion in government guarantees over the past four years, and not R8.82 billion as reported in the media,” says Sadik. The latter figure was provided by Solidarity.