President Cyril Ramaphosa did not offer any succour in his State of the Nation address to embattled Denel.
But the State-owned company (SOC) did not go unnoticed this week when Centurion-headquartered trade union Solidarity presented Denel chief executive Danie du Toit with a memorandum of ‘implementable proposals’ as potential solutions to “the many financial challenges Denel faces” according to Solidarity deputy general secretary Johan Botha.
Addressing Parliament, the only state-owned company Ramaphosa singled out for a mention was Eskom which will be on the receiving end of a multi-billion Rand state bail-out over the next 10 years.
As far as the country’s other SOCs were concerned the President reportedly is leaving them to the Presidential State-Owned Enterprise Council to straighten out. Fin24 reports the council will work to “create better coherence between government’s ailing entities to fine tune each one’s mandate and sharpen efficiencies”. Earlier this month Du Toit was one of more than 20 top men from SOCs summoned to the Union Buildings to talk economic revitalisation and development with South Africa’s first citizen.
The Solidarity memorandum is the outcome of a survey conducted by the trade union among its Denel members. The survey went into issues including corruption, financial mismanagement and “cash flow constraints that have reached near crippling levels,” according to Botha.
The survey allowed the Solidarity Research Institute (SRI) to identify a number of broad concerns pertinent to the defence and technology group’s current crop of crises.
“The most prolific concern identified by the survey relate to Denel’s human resources with the emphasis on appointments, management and structuring of the human component.”
The second priority identified during the survey related to Denel suppliers and procurement.
“Members feel the procurement process is driven by politics rather than quality of products or services obtained. Many products could have been sourced in-house or through private companies.”
Another area of concern identified is maintenance and utilisation of technology, equipment and facilities.
“Solidarity members at Denel feel certain assets are retained at a major cost while not contributing to turnover,” Botha said adding “red tape” was also a concern.
“Members feel red tape is in the way of managers being able to implement strategies that could be of financial benefit. They also feel red tape does not allow their voices to be heard.”
On the thinking behind the survey, Botha said Solidarity members at Denel have “indispensable institutional knowledge, experience and skills”. These can contribute to “revival, if put to good use”.
The survey is seen as a knowledge pool to be drawn on for proposals to make Denel profitable again, he said, adding Solidarity “has a role in turning Denel around and ultimately, growing it”.