In a normal world, it would be generally accepted that a company that has been technically bankrupt for years, cannot compete with more successful companies operating in the same commercial space and which desperately needs to cut operating costs if it is to have any hope of survival or attracting a new investor, would not be the ideal target for an above inflation wage demand.

But we live in la-la land and so it should come as no surprise that the unions in South Africa are embarking on what will almost certainly turn out to be a lemming run. In fact, SAA might very well be an early metaphor for the whole country as the money tree fails to bear fruit and payment to government employees becomes at first sporadic and then non-existent.

Call me a prophet of doom if you will, but a country’s finances are no different in principle from a household’s. Provided more money is coming in than going out, all is well. But when that changes, things can get ugly.

SAA has been a basket case for years now, but that doesn’t seem to have deterred the government from using it as a private piggy bank for favoured cadres. While the national airline is technically owned by the taxpayers of South Africa, in effect it is run by the government who act in good faith (haha) in the management of this ‘asset’ on behalf of the taxpayer.

Now, quite why a political party that has demonstrated over a quarter of a century that it can’t even run a country thinks it can run something as complex as an airline is quite beyond me. Most governments are useless at running businesses, which is why Margaret Thatcher privatized so many UK industries back in the 1980s.

The problem with government owning large enterprises is that the workers, most of whom are unionized, believe that any demand they make will be met because the government in question will be terrified of losing votes. This was certainly the case with British Steel, British Rail and British Leyland in the UK back in the 1970s. Any threat of strike action would bring the government of the day out in a cold sweat and they would invariably give in to the most outrageous demands. This was the era when the UK was known as the ‘sick man of Europe’ because of its disastrous economy.

Once the union demands were met, did the workforce say thanks very much and promise greater productivity in return? No, of course they didn’t. Union leaders get paid handsomely from membership subscriptions to negotiate for the best possible deal, irrespective of how damaging that deal might be in the long term. Workers are often poorly educated and gullible people and, in the absence of a secret ballot, will raise their hands in favour of industrial action for fear of being victimized and called a ‘scab’. Even if a strike drags on for weeks without pay the union members will still gallantly support their union leader in the mistaken belief that he will be able to perform a miracle.

There has been much comment on social media about the SAA strike. Many commentators felt that it was unfair to propose a drastic cut to the SAA workforce when it wasn’t the workers who were at fault. It was the likes of Princess Dudu and her fellow crooks who were at fault. The losses at SAA under her watch are estimated at R10.5 billion. But life isn’t ever fair and Dudu et al are sitting pretty with vast wealth and giving the middle finger to the rest of South Africa. Dudu has nothing to fear other than the slim possibility that she may not be able to sit on a board as a director in future. Measured against the kickbacks she allegedly negotiated and the vast amount she was paid as chair of SAA, I doubt whether this will keep her awake at night. In fact Dudu cares so little about the mess she’s caused that she doesn’t even bother to turn up for court cases, claiming she doesn’t have the money to get to court.

Since the financial woes at SAA have dominated our newspapers for as long as I can recall, the argument that the lowly workers now facing job losses knew nothing about what was happening in the executive suite sound rather hollow. What would have been smarter would have been for the union leaders to take note of the many warning signs and demand financial discipline long ago. But that might have involved a loss of some jobs and that would clearly be anathema to any union leader. The complex notion of sacrificing one job to protect another four wouldn’t occur to them.

Maybe the message is belatedly getting through to at least some members of the African National Congress that SAA is a rabid dog of an investment. Pravin Gordhan said in New York on Thursday that SAA was ‘not too big to fail’. Whether this will get an approving nod from Cyril or a sharp rap over the knuckles remains to be seen, but my suggestion would be to talk to that nice Mr Branson and see if he is a serious potential buyer.

SAA needs to be sold or wound up as soon as possible. Not only will this save the taxpayer a fortune but it would give a timely warning to unions not to tempt fate. The icing on the cake would be for those responsible for the collapse of the national airline to be dragged to court, have their assets seized and be fitted out with orange overalls. That would, at least, give the retrenched 3 000 workers some comfort. However, given the culture of lack of accountability espoused by the ruling party I wouldn’t hold my breath on that one.  

The views of the writer are not necessarily the views of the IRR.

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1 COMMENT

  1. SAA is a money-laundering scheme.

    That’s why all tin-pot countries have a national airline, all those foreign bank accounts…

    I’m not the guy who will be investigating this and putting myself in harms way, but one day long in the future the truth will come out.

    You read it here first

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