Solutions to Denel’s financial crisis – Solidarity

Union conducted an extensive survey on the challenges the Group is facing

Solidarity wants to offer solutions to Denel’s financial crisis

20 June 2019

Solidarity on Tuesday submitted a memorandum that contains implementable proposals to Denel Chief Executive, Dr Danie du Toit, as a contribution to find viable solutions to the many financial challenges Denel currently faces.

This comes after Solidarity had conducted an extensive survey among its members at Denel on the challenges the Group is facing including corruption, financial mismanagement and cash flow constraints that have reached near crippling levels.

Based on the survey, the Solidarity Research Institute (SRI) identified five broad concerns pertinent to the Group’s current crises. According to Johan Botha, Solidarity’s deputy general secretary, the most prolific concern revolves around the appointment, management and structuring of the organisation’s human resources. 

Botha pointed out that the concern ranked second highest in the survey relates to suppliers and procurement. “Members feel that the procurement process is driven by politics rather than by the quality of the products or services being obtained. Many of the products could have been sourced in house or otherwise through private companies.”

Another area of major concern relates to the maintenance and utilisation of technology, equipment and facilities. “There is a clear concern among our members that certain assets are being retained at major cost to the Group while those assets do not contribute to the Group’s turnover,” Botha said.

Members also identified the level of red tape involved in processes currently in use in the organisation as a major concern. “Members feel that red tape stands in the way of managers being able to implement strategies that could be of financial benefit to the group. They also feel that red-tape does not allow their voices to be heard,” Botha indicated.

According to Botha, members also identified a clear need to work more closely with the private sector in all forms of business, and this need warrants attention.

Solidarity’s members at Denel have indispensable institutional knowledge, experience and skills to offer that can certainly contribute to the Group’s revival, if put to good use. It is for this reason that we decided to establish a knowledge pool to harness this knowledge to come up with proposals to make Denel profitable again,” Botha said.

Solidarity firmly believes it has a role to play to achieve a turnaround at Denel and ultimately, its growth,” Botha concluded.

Issued by Johan Botha, Deputy General Secretary, Solidarity, 20 June 2019