{"id":976,"date":"2019-12-06T19:02:12","date_gmt":"2019-12-06T17:02:12","guid":{"rendered":"http:\/\/marxistworkersparty.org.za\/?p=976"},"modified":"2019-12-07T11:03:58","modified_gmt":"2019-12-07T09:03:58","slug":"saa-anc-government-big-business-retaliate","status":"publish","type":"post","link":"https:\/\/marxistworkersparty.net\/?p=976","title":{"rendered":"SAA: ANC Government & Big Business Retaliate"},"content":{"rendered":"\n

Workers Movement Must Oppose Business ‘Rescue<\/strong>‘<\/h2>\n\n\n\n

MWP statement<\/em><\/strong><\/p>\n\n\n\n

Late on 4 December, the South African Airways board placed the state-owned national airline in \u2018business rescue\u2019, along with all of its subsidiaries \u2013 Mango, Air Chefs and SAA Technical. This is the first time this legal mechanism has been used for an SOE. It sets a precedent for how the ANC government will proceed with its onslaught against the public sector in the months and years ahead.<\/p>\n\n\n\n

This a\ndeclaration of class war by the ANC government and its masters \u2013 the capitalist\nclass, described even by capitalist auditing firm, PriceWaterhouseCoopers, as\nthe most rapacious on the planet. And they would know! The war on SAA workers\nis a dress-rehearsal for the much bigger battles to come at Eskom, other SOEs and\nthe public sector. <\/p>\n\n\n\n

To avenge\nthemselves for the defeat inflicted on them by the SAA workers\u2019 strike, big\nbusiness set about consciously creating the climate for business rescue. In\nacts of capitalist class solidarity, other players in the industry deliberately\nsabotaged SAA. Insurer Santam refused to provide cover for SAA tickets,\nfollowed immediately by the multinational, Flight Centre, suspending SAA ticket\nsales.      <\/p>\n\n\n\n

The capitalist media\nhas since stepped up its pre-strike condemnation of the unions into a propaganda\navalanche, welcoming this development and belittling the unions with the\nfiction that they brought SAA to this position by demanding decent wages and\njob security. There is a deafening silence over the siphoning-off of revenue through\ncorrupt outsourcing and jet fuel supply contracts amongst others.<\/p>\n\n\n\n

Introduced only in\n2008, \u2018business rescue\u2019 is the fancy name for protecting the investments of the\ncapitalist class in bankrupt companies. In the past, if a company went bust,\ninvestments could be lost. But not anymore! Section 128. (1) (b) (iii) of the\nCompanies Act 71 of 2008 reads:<\/p>\n\n\n\n

the development and implementation, if approved, of a plan to rescue the company by restructuring its affairs, business, property, debt and other liabilities, and equity in a manner that maximises the likelihood of the company continuing in existence on a solvent basis or, if it is not possible for the company to so continue in existence, results in a better return for the company\u2019s creditors or shareholders than would result from the immediate liquidation of the company\u2026 <\/strong>[Emphasis added][1]<\/a><\/p><\/blockquote>\n\n\n\n

The latter is\nexactly what is happening here. SAA\u2019s liabilities, including debt, exceeds its assets\n\u2013 the value of the planes etc. \u2013 by R13 billion.[2]<\/a>\nIf the ANC government simply let SAA go bust \u2013 as they have clearly been\ncontemplating \u2013 losses of up to R13 billion would have to be shared amongst\ntheir big business friends. Making clear their main motivation is to avoid this,\nSAA spokesperson Tlali Tlali, said that business rescue would give \u201ca better return for the company\u2019s creditors\nand shareholders, than would result from any other available solution<\/em>\u201d.[3]<\/a>\nThe bill for the crisis would in other words be presented to the SAA workers\nand the working class whose taxes pay for SAA. \n<\/p>\n\n\n\n

For the worthy\ncause of protecting the already super-rich, Pravin Gordhan, the ANC\ngovernment\u2019s Minister of Public Enterprises, was willing to turn the taps back\non following the SAA board\u2019s decision. He announced an immediate R2 billion\ncash injection from government and an additional R2 billion loan guarantee so\nthat the SAA board could borrow more from the banks \u2013 who will of course earn\nmore interest\/profit on these loans. Desperate not to call it a \u2018bail-out\u2019 \u2013\nwhich is exactly what it is \u2013 Gordhan has said the extra-money from government\nwill be provided in a \u201cfiscally neutral way\u201d \u2013 i.e. by selling off SAA\u2019s good\nassets, cutting budgets and privatising elsewhere in the public sector!<\/p>\n\n\n\n

<\/div>\n\n\n\n

Market Chaos<\/strong><\/p>\n\n\n\n

In addition, the\nANC government has guaranteed the repayment of SAA\u2019s existing R9.2 billion debt\nin full, i.e. without any \u2018haircut\u2019 on the interest\/profit big business can\nexpect to earn.[4]<\/a>\nGordhan went further, explaining, that business rescue \u201c\u2026is the optimal mechanism to restore confidence in SAA and to safeguard\nthe good assets of SAA<\/strong> and help\nto restructure and reposition the entity into one that is stronger, more\nsustainable and able to grow and attract\nan equity partner<\/strong>.<\/em>\u201d [Emphasis added] This is a clear announcement of\nthe break-up, and at least partial-privatisation, of what will remain of SAA.<\/p>\n\n\n\n

At this, big\nbusiness is licking its lips. In an interview with the former-CEO of the\nprivately-owned Comair aviation group, Business\nDay<\/em> asked: \u201cThere\u2019s speculation that\n\u2026 Comair, would do really well from an SAA implosion. Is that an erroneous\nassumption?<\/em>\u201d The former-CEO answered: \u201cLook,\nit would; and the domestic airlines have been doing quite badly over the past\nfew years because of the overcapacity. The market does require a correction to\nbring the industry back to proper profitability. There\u2019s no question that the\nother airlines would benefit from it\u2026<\/em>\u201d[5]<\/a><\/p>\n\n\n\n

The SAA debacle\nconfirms the chaos the capitalist \u201cfree market\u201d \u2013 worshipped by the ANC\ngovernment \u2013 has created in the aviation industry as elsewhere in the economy. Comair\nmade a profit of R471 million in 2018.[6]<\/sup><\/a>\nNow they are set to make more<\/em> money\nwith SAA\u2019s demise \u2013 all of which will go into the pockets of executives and\nshareholders, rather than the Treasury. <\/p>\n\n\n\n

The\nprivately-owned SA Airlink is going to court to challenge the Air Services Licensing\nCouncil for denying them routes to neighbouring countries whilst granting them\nto the government-owned SA Express using the excuse that SA Express has not tabled\nfinancial statements in parliament for the past two years[7]<\/a>\n– the airborne equivalent of the taxi wars to control routes!<\/p>\n\n\n\n

Allowing all the\nnew, smaller, so-called budget airlines into the market in a blind mimicking of\ndisastrous so-called \u201cinternational best practice,\u201d has created anarchy, failed\nto lower prices, and excluded an impoverished working class from access to affordable\nair travel. The vultures are no doubt circling to obtain \u201cstrategic equity\npartner\u201d status at a price they can now dictate to a bankrupt SAA. They will\ninclude not only the usual suspects from established big business in SA and\ninternationally, but in all likelihood consortia are being put together by\naspirant black capital to bid to feast on SAA\u2019s flesh.<\/p>\n\n\n\n

This underlines\nthe point that the Marxist Workers Party has made \u2013 the key to \u2018rescuing\u2019 the\nSOEs and re-structuring them in the interests of the working class lies in extending<\/em> nationalisation. The entire\naviation industry should be nationalised under democratic working class control\nand the different companies integrated according to a democratic economic plan\nthat reduces waste and achieves economies of scale whilst protecting jobs,\nwages and conditions. International experience shows that business rescue has a\n67% failure rate. If SA Express\u2019s rescue plan has failed, why should SAA\u2019s\nsucceed? Under big business and the ANC government\u2019s watch there is not even a\nminimal guarantee about jobs at SAA and its subsidiaries. <\/p>\n\n\n\n

<\/div>\n\n\n\n

Response<\/strong><\/p>\n\n\n\n

Shamefully, the\nSolidarity trade union pushed for SAA to be placed in \u2018business rescue\u2019. They\nthreatened to make the court application themselves as an \u201caffected person\u201d\n(because they have 240 members at SAA) if the board did not did enter \u2018business\nrescue\u2019 voluntarily. Solidarity is a trade union in name only. In reality it is\na reactionary lobby group for a section of the white middle class and petty\nbourgeoisie, unfortunately, pulling in tow behind it a section of the skilled\nwhite working class. That the Solidarity leadership did this \u2013 and are boasting\nabout it! \u2013 does not surprise us.<\/p>\n\n\n\n

Unfortunately,\nthe Numsa and Sacca leaderships, in a joint statement published on 5 December,\nannounced that they had written to the SAA board in support<\/em> of Solidarity\u2019s application. They have also demanded that\nthey be involved in\u2026 assigning the \u2018business rescue practitioner\u2019! This is the\nequivalent of a condemned person asking to have a say in who the executioner\nshould be. The practitioner will be given dictatorial powers to oversee the\nrestructuring of SAA in-line with the blatantly anti-worker \u2018business rescue\u2019 legislation.<\/p>\n\n\n\n

It is a serious mistake\nfor Numsa and Sacca to assume any responsibility for the break-up and\nprivatisation of SAA \u2013 which is exactly what they are doing in adopting this\nposition. This will be highly disorienting for the SAA workers, especially\nafter their heroic eight-day strike in November (see SAA Workers Victorious in Wage\nBattle<\/a>). But it will disorient the wider-working class too, especially members\nof the Saftu federation who are looking for leadership against job losses,\nausterity and privatisation. Underlining the severity of the crisis, the\nrecently released third quarter economic \u2018growth\u2019 figures show a contraction<\/em> of 0.6%.<\/p>\n\n\n\n

In response to\nthis, Saftu\u2019s\n4 December statement<\/a> says that the:<\/p>\n\n\n\n

Saftu Inaugural Central Committee has recommitted the federation to leave no stone unturned in establishing a broadest front of the working class formations including with left learning political parties to fight neoliberalism and austerity programmes. SAFTU has written to all the 147 organisations that attended the Working Class Summit in July 2018 to prepare for the biggest battle of our life time to defeat the programme that has seen more and more people getting unemployed, trapped in poverty and seen massive inequalities in society.<\/p>

This will include a series of general strikes of this pro working class coalition that will involve the siyalala emadolobheni<\/em> to demand the reversal of the programme that does nothing but worsen the crisis of poverty.<\/p>

SAFTU calls on all the left forces to make the coming budget speech [in February 2020] a demonstration of unity of organised workers, the unemployed, youth, women formations and host of other issue based formations to demand the reversal of neoliberalism austerity programmes.<\/p><\/blockquote>\n\n\n\n

We welcome this\nstatement. But how seriously will workers and communities take it, when Saftu\u2019s\nlargest affiliate, Numsa, has taken a position in favour of \u2018business rescue\u2019\nat SAA, ultimately on the grounds that \u2018there is no alternative\u2019 to the same\nneo-liberalism and austerity Saftu is calling for mass action against?\nLikewise, what signal has been sent to Numsa members at Eskom, who have\norganised a joint programme of action with NUM to fight job losses and\nprivatisation in the power-utility, about the seriousness of the Numsa\nleadership to fight?<\/p>\n\n\n\n

In our 16 November statement<\/a>, we\nwarned that an economic crisis \u201c\u2026of such\ndepth poses a stark choice for the workers movement.<\/em>\u201d Ultimately, it poses\na choice between class collaboration, willingly playing the role of managing\nthe working class on behalf of the bosses, to restore the economy on a\ncapitalist basis, or mass struggle armed with a bold and revolutionary\nsocialist programme.<\/p>\n\n\n\n

The Numsa\nleadership must not make the mistake, consciously or unconsciously, of going\ndown the path of class collaboration. The Companies Act 71 of 2008 allows for\n\u201caffected persons\u201d (which both Numsa and Sacca would qualify as) to make a\ncourt application to \u201cset aside\u201d the board\u2019s resolution in favour of business\nrescue. We call on the Numsa and Sacca leaderships to reverse their position in\nfavour of business rescue and urgently make such an application.<\/p>\n\n\n\n

With the time\nthis will buy, the SAA workers must be re-mobilised, appealing to all aviation\nworkers, including for international solidarity given the nature of the industry,\nwhilst also urgently bringing forward Saftu\u2019s programme for mass action and\nmobilisation of other sections of the working class, especially the Eskom\nworkers.<\/p>\n\n\n\n

If, in response\nto this, the government reverts to its original plan to withhold funding and\nlet SAA collapse \u2013 funding which they have now proved can be found with a click\nof their fingers \u2013 workers must be prepared to occupy the airports to protect\nSAA\u2019s assets from the liquidators. Mass pickets could be mobilised by the trade\nunion movement to support and defend the occupying workers. Such bold action is\nthe only way to force the ANC government, and its big-business friends, back from\nthis attack on the entire working class.<\/p>\n\n\n\n

Every major\nclass battle between the ANC government and the working class has demonstrated,\nas the Marikana massace did, that it is not possible to serve both the working\nclass and the bosses. As in 2012, so in 2019, the ANC has been compelled by the\nclass interests it represents to attack the workers. Above all this development\nhas made more urgent the necessity for the reconvened Working Class Summit to\nplace on the agenda the implementation of the first summit\u2019s resolution, to\nestablish through mass action, a mass workers party on a socialist programme.    
<\/p>\n\n\n\n

\n\n\n\n

[1]<\/a> Companies Act 71 of 2008<\/a><\/p>\n\n\n\n

[2]<\/a> \u201cSAA Losses Hit R10bn Mark Over Two\nYears<\/a>\u201d,\nCarol Paton, BusinessLive<\/em> (3 December\n2019).<\/p>\n\n\n\n

[3]<\/a> \u201cSolidarity Takes Credit for SAA\u2019s\nBusiness Rescue Decision<\/a>\u201d, Luyolo Mkentane, BuisnessLive<\/em>\n(5 December 2019)<\/p>\n\n\n\n

[4]<\/a> \u201cTreasury and Lenders to Provide R4bn\nfor SAA Rescue<\/a>\u201d,\nCarol Paton, BusinessLive<\/em> (5 December\n2019)<\/p>\n\n\n\n

[5]<\/a> \u201cSayonara, SAA?<\/a>\u201d, Giulietta Talevi, BusinessLive<\/em>, (5 December 2019)<\/p>\n\n\n\n

[6]<\/a> \u201cComair\n(South Africa)<\/a>\u201d, Wikipedia<\/em><\/p>\n\n\n\n

[7]<\/a> \u201cSA\nExpress Rescue Plan Fails as Losses Widen Significantly<\/a>\u201d, Carol Paton, BusinessLive<\/em> (22 November 2019)<\/p>\n","protected":false},"excerpt":{"rendered":"

Workers Movement Must Oppose Business ‘Rescue’!<\/p>\n<\/div>","protected":false},"author":1,"featured_media":978,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1,13],"tags":[],"class_list":["post-976","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-comment","category-trade-union"],"aioseo_notices":[],"acf":[],"brizy_media":[],"_links":{"self":[{"href":"https:\/\/marxistworkersparty.net\/index.php?rest_route=\/wp\/v2\/posts\/976","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/marxistworkersparty.net\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/marxistworkersparty.net\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/marxistworkersparty.net\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/marxistworkersparty.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=976"}],"version-history":[{"count":5,"href":"https:\/\/marxistworkersparty.net\/index.php?rest_route=\/wp\/v2\/posts\/976\/revisions"}],"predecessor-version":[{"id":1014,"href":"https:\/\/marxistworkersparty.net\/index.php?rest_route=\/wp\/v2\/posts\/976\/revisions\/1014"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/marxistworkersparty.net\/index.php?rest_route=\/wp\/v2\/media\/978"}],"wp:attachment":[{"href":"https:\/\/marxistworkersparty.net\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=976"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/marxistworkersparty.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=976"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/marxistworkersparty.net\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=976"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}