By Sanjeev ‘Mahatma’ Khan
Does a business exist to create employment or to add value to shareholders’ investment?
For one thing, for a business to realise its objective of making profit it has to hire employees. In other words, workers are assets that enable it to achieve that. And when it becomes apparent that they are not productive enough to make enough profit, they become a liability. The first step that the board of directors take is to reduce the staff complement, possibly outsource noncore business segments, and make the remaining employees more productive by ensuring that the quality of the services or goods produced are of a high quality. When this fails, after exhausting all avenues to keep the concern running, the board of directors might be tempted to make the tough decision of closing the business or selling it to interested parties who might have fresh ideas and more capital.
Thus, one can only guess that Glencore might have weighed up a few options to keep Optimum Coal in Mpulamalanga running, but might have run out of options. The plummeting global price of coal is not helping matters at all. If ever Glencore decides to close its business, it has to follow the right procedure in line with the Departments of Labour and Mineral Resources. This, one can only, assume the company knows very well.
So, do our unions understand that they cannot force a company that is not making enough even to satisfy its shareholders, let alone sustain itself, to operate without making profit?
