Lockdown: Denel cannot afford salaries
19 May 2020
Solidarity had a meeting with Denel on 18 May after receiving communication from Denel indicating that it would not be possible for the arms manufacturer to pay employee’s salaries at the end of May.
“The current lockdown measures are aggravating the situation in which Denel already finds itself. As a result, no income is generated, and taking into account historic liquidity problems experienced by the company, cash flow has dried up to such an extent that salaries cannot be paid next week,” said Helgard Cronje, sector coordinator for defence and aviation at Solidarity.
Solidarity believes that the current lockdown regulations should be terminated to allow businesses such as Denel to generate income so that they are no longer dependant on the state or have to rely on additional aid packages or bailouts. There is no need to make a choice between work and health; all businesses can open their doors and allow workers to start working without compromising their health. Many people are losing income, and companies and businesses are suffering huge losses with catastrophic consequences for the economy.
Orders to the value of R101 million cannot be delivered at present because export permits are not being issued. Those are exactly the type of orders that determine whether people can be paid salaries or not.