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It’s clear that Mr Lucio Trentini is passionate about the industry that he has been a part of for the past 33 years. It was eye opening to understand the economic centrality of the steels and engineering industry. He spoke to Leadership Editor Prof JJ Tabane about his career highlights.

SEIFSA is a federation of eighteen independent employer associations whose membership have given SEIFSA a mandate to represent them on issues across the socio-economic spectrum. This organization stands in the gap for its affiliated membership on issues as thorny as industry wage negotiations, social security benefit fund matters and a host of business-related issues.

SEIFSA celebrates its 80th anniversary and was born out of World War II – SEIFSA was formed to coordinate engineering skills and personnel scattered around South Africa to coordinate the war effort against Germany.

It was born in 1943 when it became a federation and a unified employer voice. Thereafter, it made the effort to remain relevant in the time of apartheid. SEIFSA was there in the 1970s when black workers were integrated into industry and was there in the turbulence of the 1980s. It experienced a dramatic change when the dawn of democracy arrived during the early 1990s.SEIFSA is “not a broad church” Lucio explains—it has largely focused on representing members in the steel and metals engineering sector. Unlike Business Unity South Africa (of which they are a member), it does not seek to represent broader business organisations; it remains focused on the metals and engineering sector.

Lucio waxed lyrical about the 350 000 employees employed by close to 9 000 companies in a R900+ billion revenue generating sector, which shows the critical nature of this industry to the economy.

“There is a lot at stake because of where we are placed.”

This sector supplies the automotive, auto assemblers, mining and construction sectors with crucial material they need to exist.

“When the steels industry sneezes, the entire economy catches a cold.”

SEIFSA associations are based in the Eastern and Western Cape, as well as KZN. The rest are based in Gauteng and surrounds. This makes it easier for things such as wage negotiation coordination. This also enhances the diversity of the federation.

SEIFSA is organised at the centre, with executives responsible for administration, marketing, industrial relations, economics, skills development and health and safety. The head office is situated in the CBD with 20 people coordinating the work of SEIFSA.

“We are a small organisation that tends to punch above its weight,” claims Lucio.

The three milestones that stand out for Lucio are the dawn of democracy, the 70s that saw the recognition and integration of black workers into industry and the COVID-19 pandemic.

The dawn of democracy saw a big shift as local manufacturers were not as protected as before. They were suddenly fully exposed to the global economic headwinds. This was a difficult period. He recalls how he met with the current Federation President and Chairman of the SEIFSA Board, Elias Monage, who was a NUMSA Local Official at that time and he is pleased to see him transition into the industrialist he is today. “I owe Elias a great debt of gratitude for the huge support he has given me and for his time and commitment to this sector,” expresses Lucio.

In the 1970s, black workers were finally recognised and permitted to organise themselves into labour unions. The recognition of black workers? This required a massive paradigm shift. No longer was it good enough to simply be on the right side of the law, now employers had to content with a new dynamic on their shop floors and the introduction of the vexed concept of fairness. Industrial relations had taken on a new look and feel and employers were forced to adapt or die. The political situation of the banned organisations and the imprisonment of political leaders such as Nelson Mandela simply made tensions rise in the industry, just as it was getting used to doing things differently.

The third milestone was COVID-19—this was a global pandemic that changed life as we knew it. Ironically, from an industrial relations point of view, it bought the employers and labour closer together. Lucio notes that in 2020 the industry signed what was known as a stand-still agreement (a zero % wage increase) to make sure that the industry could survive COVID-19–and that collective action paid off handsomely, especially given the effects of the hard lockdown.

Because of all these milestones, it caused the change of the membership profile. “When I joined SEIFSA in 1990s, industry employed some 450 000 white- and blue-collar workers. Today, the industry represents about 220 blue collar or factory workers. Companies’ headcount has shrunk over the years because of global competitiveness and the embracing of technology relying less and less on headcount. The industry’s production targets are still met, albeit far lower than what could be possible, but without a link between headcount and production. There is more investment in equipment, new technologies, robotics, 4IR etc., than human resources.”

The big question is still transformation across the sector. While the federation’s head office is level 1 with a diverse Executive Committee that is highly skilled, this, however, does not reflect the transformation in the sector. Lucio describes the state of transformation as “Bitterly disappointing, overwhelmingly untransformed. I am afraid to say we still have a long way to go”.There are some reasons for this sad state of affairs; the problem with industry growth or lack thereof and the inability to attract and retain key black and particularly African female skills particularly in the STEM fields.

“There is however no excuse when we’ve over 20 years of employment equity,” asserts Lucio. We shouldn’t be too surprised that industry targets are being introduced by government to accelerate transformation. Lucio believes that as the transformative lead for the Steel Master Plan Management Committee, he understands that transformation is a key industry imperative, it we fail, it will be “a recipe for all of us not moving forward”.

As a sector, we need to stand up and embrace change and advocate transformation. Not only is it in South Africa’s interest for that to happen, but it is also fundamentally in business’s own long-term interest. It is of critical importance that a concerted effort is made by the sector to create meaningful opportunities for all South Africans to play a crucial role in taking our industry to new heights.

There is a need for companies to get intimately involved in building future capacity. In conclusion, the big challenges facing the industry include a lack of demand in the government-promised infrastructure-built programme, poor infrastructure, and lack of consistent power supply.

  • Creation of demand: through leveraging government infrastructure spending. Focusing on the transmission network, rolling stock maintenance, rail, water infrastructure and importantly, localization. Government has committed to unleashing a huge R800 billion infrastructure programme. Given the centrality of the steel and engineering sector, this would be a massive game changer for the sector. Sadly, this has been slow to materialized. “Industry does not suffer from inability to supply.”
  • Poor infrastructure: Failing infrastructure on roads, rail, water, all have a direct impact on the ability of the industry to function optimally.
  • Power crisis: This industry is overwhelmingly reliant on coal power stations. There is a need to end power outages for industry to function optimally. Lucio tells me that while larger members have installed huge generators and solar systems at huge expense, the problem is that resources are diverted to “just remaining operational instead of ploughing funds into new investments.” And on the other side of the spectrum, some members simply cannot survive the new cost structure imposed by this reality and this has led to business failures and job losses.

Finally, on the leadership lessons from these many years of existence, Lucio says:

“That no-one on their own has all the answers. Surround yourself with the brightest and most loyal team members and be prepared to listen. And, most importantly, a cause is never lost. Not finding a solution today simply means that tomorrow brings a whole new set of opportunities and possibilities. If the history of SA teaches us anything, it is that no problem, no matter how insurmountable we may think it is, can be resolved and sometimes the solutions come from the people and places you least expect.”

Prof JJ Tabane

Editor of Leadership Magazine

Profile

Mr Trentini is the Chief Executive Officer at SEIFSA. He has been with SEIFSA since 1990 and over the last three decades he has gained extensive experience in the metals and engineering industries and has developed sound working relationships with all industry stakeholders.

Mr Trentini represents employers in the metals and engineering sector on various institutions and statutory bodies and is the lead negotiator in the metals and engineering industry wage negotiating team. He holds a BA in Economics & Industrial Psychology and a Post Graduate Diploma in Management from the University of the Witwatersrand and Graduate School of Business Administration respectively. He also holds an Expert Negotiator Certificate issued by the Gordon Institute of Business Science.

Highlights over three decades

• Being witness to SEIFSA appearing before the Truth and Reconciliation Commission, where SEIFSA presented a perspective of the role that the Federation had played in society from 1960 to 1994. The SEIFSA presentation before the TRC focused, in particular, on the Federation’s leadership role in industrial relations, the negotiation of industrial agreements covering the industry’s workforce, our role in the removal of job reservation in industry, the recognition of black trade unions, and the improvement in the conditions of employment of the industry’s workforce.

• From the late 1990s to date, SEIFSA has developed an impressive range of professional products and services of direct benefit to individual members. From our flagship product; the Price and Index Pages, the SEIFSA Main Agreement Handbook, to relaunching the SEIFSA Training Centre, the SEIFSA Awards of Excellence, a range of seminars, workshops and training initiates, to providing professional consultancy and advisory services across all our divisions, SEIFSA continues to lead the way in representing our members’ interests.

• Ours is a proud history of industrial peace and stability – with only five industry strikes having been experienced over SEIFSA’s 80–year wage negotiation history.

• Of course, over the past eight decades we have developed a very impressive range of social security funds and schemes for the industry’s workforce, unparalleled by any other sector in the economy.

• The low point in my collective bargaining career was the four-week, violent industry strike in 2014, with the high point being the recently-concluded standstill agreement, negotiated in 2020 in response to the global pandemic – an industrial relations feat that remains unmatched to this day.

• There is little doubt that SEIFSA has been instrumental in shaping the industry’s collective bargaining landscape, which continues to enjoy the support of organised labour, the broad SEIFSA constituency and Government. However, in recent years the model has come under some criticism, which may at times be warranted but, in many instances, has not been carefully thought through.

• While some may feel entitled to criticise the current model, one should never lose sight of what the model has enabled the industry to achieve. We have unmatched pension, provident fund, sick pay fund and disability benefit funds worth in excess of R140 billion, established and administered by the social partners with no government involvement. These funds play a crucial role in social security issues, looking after employees whilst in service and one day when they exit the industry, without being a burden on the State.

• With the sector facing tough economic conditions, the need to sit across the table and engage on strategically important matters around the sustainability and competitiveness of the metals and engineering sector in a more measured approach to resolving issues in a collaborative and conciliatory manner is now, more than ever, desperately needed.

• With new challenges facing the South African economy in general and our sector in particular, stakeholders across the board have had to come to terms with the fact that the old way of doing business is over and that we all have to work together to come with sustainable solutions that will see the industry come out of the doldrums and preserve the jobs that still remain.

• Because of the diversity and size of the industry, now more than ever before it is important for companies to speak with one common voice when dealing with challenges facing the industry – and the only way that can be achieved is when employers talk through an agency that is able to articulate their concerns in efforts aimed at moving the industry forward.

• As the authoritative voice of employers in the sector, SEIFSA has taken on this responsibility and has begun a journey of transitioning from being more than just a collective bargaining agency, to a body that is more and more taking on the role of speaking for and behalf of employers in the sector to all key stakeholders, shapers of policy and government ministries. The goal is not only to articulate the interests of business but more importantly to position business as a willing and able partner in tackling the challenges facing our beautiful country.

• Looking ahead, I believe SEIFSA will be defined by not what it has proudly achieved over its eighty years of existence but more importantly by what it will still achieve as a united business voice as we move into the next decade and beyond.

• I have no doubt SEIFSA will continue to work hard to represent its affiliated Associations and member companies, for without Associations there is no SEIFSA and without companies there would be no Associations

What was the need to establish SEIFSA all those years ago and is it still serving its purpose today?

South Africa’s declaration of war on Hitler’s Germany in September 1939 forged a new unity among employers in the nation’s metal and engineering industry.

Government had appointed a Director-General of War Supplies and a Controller of Industrial Manpower. Five trade unions represented a sometimes-restless workforce labouring long hours under a wage freeze. Yet employers, whose industries were crucial to the war effort, could not deal effectively with either government or labour issues. They were regionally organised and had no national voice.

Born out of conferences in Bloemfontein in 1941 and Cape Town in 1942, a national umbrella organisation was formed. Its name: the South African Federation of Engineering and Metallurgical Associations (SAFEMA). A regionally structured council was created comprising three delegates and three alternates each from the Cape, Transvaal, Natal, Midlands, and Border areas. The first report of the SAFEMA Council noted that according to available figures, the federation represented 440 employers.

In 1947, in view of vigorous growth in the industry, it was decided to revise the federation’s constitution and provide for more effective services for the increasing number of specialist national associations created in the sector. The new structure moved away from regionalism and opened the way for majority representation on the council for registered employer associations. At the same time, provision was made to ensure that regional interests were also represented.

The council was empowered to co-opt as members; prominent industrialists whose

knowledge and experience would be of value to the federation. In 1943, the name was changed to the Steel and Engineering Industries Federation of South Africa – SEIFSA.

In 1944, the National Industrial Council for the Iron, Steel, Engineering, and Metallurgical Industries was formed – and the first national wage agreement for the industry was forged.

Eighty years on and SEIFSA is still recognised as the authoritative voice of employers in the metals and engineering industry. From pioneering wages and conditions of employment agreements to introducing wages modelling, long term agreements, and no-strike clauses once a deal is signed, SEIFSA continues to lead the way in concluding innovative agreements that lead the way for others to follow. On the advocacy and lobbying front, SEIFSA on behalf of its affiliated Associations has developed a social security network for all workers in the industry that stand as a benchmark for other sectors to follow. The Metals and Engineering Industry pension and Provident Fund, with investments and assets under management in excess R140 billion is testament to this claim. On the business front, SEIFSA is increasingly being relied upon by government and shapers of policy for deep dive analysis of our sector, its challenges, and the potential for growth and reindustrialisation.

No one is better positioned to lobby and advocate for this sector as SEIFSA. SEIFSA has and continues to be the voice of organised business with all stakeholders including organised labour and government.

What are the key milestones that have characterised SEIFSA’s development over the years?

Each decade through SEIFSA’s history has been characterised by key milestones. From being born in the heat of war in the 1940s, operating in the shadow of apartheid in the 1950s, surviving isolation in the 1960s, integrating black workers into the main stream in the 1970s, realising that the writing was on the wall in the 1980s and that things had to change, to the dawn of democracy in the 1990s and, most recently, surviving a global pandemic in the form of COVID-19 that has forever changed the world of work.

What can you tell me about SEIFSA membership profile changes over the years?

SEIFSA’s membership profile over the years has predominantly remained centered in the greater Gauteng and surrounding areas – the heartland of industrialisation and industry. Whilst KwaZulu-Natal and the Western Cape has marginally shrunk over the years, these two areas remain key industrial areas and continue to contribute significantly to the overall performance of the sector. Disappointedly, membership in Port Elizabeth and East London over the years has shrunk quite dramatically due to several reasons and no longer can claim to be on par with the Western Cape or KwaZulu-Natal, both in terms of the number of companies or the number of employees employed in both these regions.

Would you say SEIFSA has transformed or largely remained the same over the last three decades, in particular?

SEIFSA over the years has transformed in response to the socio-economic and political changes that have occurred over our eighty-year journey. Having survived and prospered for as long as SEIFSA has is no coincidence or fluke of history. Change and constant change has been wired into SEIFSA’s DNA and continues to be the mantra that drives the Federation forward. Standing still in a fast-changing world is a recipe for death. Whilst we’ve witnessed many employer organisations spring-up and pass-on over the years, and whilst the nature of the sector has changed and some SEIFSA affiliated organisations have amalgamated, the SEIFSA voice remains resolute, firm, and unwavering. SEIFSA continues to speak for and on behalf of its affiliated organisations and their member companies–small, medium, and large–on all platforms and with all stakeholders across the socio-economic and political spectrum.

What are the key challenges facing the steels and engineering sector at present?

A lack of demand, failing infrastructure, and reliable, predictable, and consistent energy.

Now more than ever before, government’s promise of large infrastructure spend is desperately needed. This is a sector that in response can relatively quickly reignite and put spare capacity to work literally overnight. The country’s failing infrastructure from rail, roads, water, and sanitation are all areas that are holding back South Africa’s ability to claw itself out of the mess it finds itself. Again, these are all areas that this sector has the capacity, expertise, and resources to assist in rebuilding what we’ve lost. This is a discussion we have had with the highest office in the land, i.e., both the President and Deputy President of the country, and we are collaborating in various work streams playing our part in rebuilding our country. On the electricity front, the devastating impact power outages and rolling black-outs have and continue to have on our sector are there for all to see. SEIFSA, again, is playing its part and bringing knowledge and expertise to various high-level forums created by the government to expedite finding a solution to this major challenge as quickly as possible.

What is your current relationship with government like?

SEIFSA has worked hard over the years to cultivate and build a professional and collaborative working relationship with the government across various levels. We may not always agree with what the government may or may not be doing, and from time to time we will differ and be critical, but, ultimately, solutions are founded on continuing to engage as opposed to walking away. This is a hard lesson learned and, in many respects, this is also built into SEIFSA’s DNA. SEIFSA’s beginnings were birthed in collective bargaining and dealing with the biggest and most militant trade union in our country’s history. Walking away was never an option, staying the course and finding a way to work together and make a meaningful contribution was the only way forward. And this in many respects characterises our dealings with the government.

What is SEIFSA’s view on the current economic climate in South Africa?

Tough, uncompromising, and exceptionally challenging. But we are a resilient people with a survival instinct. South Africans across the board have dealt with tough times, some might say, even tougher than what we’re experiencing today and we’ve survived. I have no doubt employers in this sector will likewise survive, prosper, and be the spark that will ignite the reindustrialisation of our sector. If we can get just a few things right in the demand, infrastructure, and energy space, the sky is the limit.

What is SEIFSA’s comment on the energy crisis? How is it affecting the industry?

In one word, devastating. The impact on a sector employing close to 9 000 companies and approximately 220 000 factor workers still heavily reliant of coal fired power stations for electricity has been disastrous. Employers who can, are redeploying funds that should have gone into plant, equipment, and employment opportunities to investing in diesel powered generators, solar, and the like. Smaller employers who are barely able to keep on top of their diesel cost consumption are placing workers on short time, or they are being laid off and eventually retrenched. We’ve seen the endless closure of SMMEs who simply don’t have the resources to ride-out the tough times and the sector has lost many thousands of workers. The irreversible damage to the metals and engineering sector cannot be recovered and the sectors overall production is estimated to contract by -5.3% in 2023.

What can we look forward to in the next few years from SEIFSA?

SEIFSA will always be at the forefront of industry negotiations with organised labour over wages and conditions of employment, but more and more, as the challenges beyond the industry’s labour cost mount, you will increasingly see SEIFSA taking on the mantle of being the authoritative business voice of employers in the sector, talking for and on behalf of its broader membership on issues that urgently need to be confronted and addressed. SEIFSA will not shy away from talking truth to power, but at the same time we will make it absolutely clear that we wish to play a collaborative role in fixing our beautiful country by bringing to the table our vast network of employers, expertise, resources, and goodwill.

After all, we don’t have another South African to fall back on.