'Trimming staff costs forms a huge component of fixing Eskom's problems'

The Congress of South African Trade Unions (Cosatu) will on Wednesday embark on a national shutdown in eight provinces protesting against job loses and retrenchments.

The union has called on workers to stay at home while others will picket countrywide.

Bloomberg journalist Mike Cohen says the unions have already shown that they are very powerful, last year the national grid was shut down during wage negotiations at Eskom. Read: Problems faced by Eskom are because of poor plant maintenance - Outa

It was extremely risky for the entity to take on the unions given how powerful they are for the election machinery and that President Cyril Ramaphosa, in particular, is the founding member of the National Union of Mining Workers.

Mike Cohen, Journalist - Bloomberg

Cohen says to some degree workers have been an impediment to attempts to fix Eskom because of the over-staffing and the average cost per employee doubling in the past decade.

He acknowledges that this is also due to lack of governance and proper management at the utility.

It is very hard to see any way out of fixing Eskom without trimming staff costs.

Mike Cohen, Journalist - Bloomberg

And we can't blame the union because that's what unions do which is to protect the interests of their members.

Mike Cohen, Journalist - Bloomberg

In any plans to fix Eskom, I think there should be a combination of things and staff costs is obviously a huge component of it.

Mike Cohen, Journalist - Bloomberg

Cohen says fixing the problem with Eskom is going to be painful, describing it as a double-edged sword.

He says when the unions protect the interest of the workers at Eskom, there will be job losses in other industries, particularly the mining sector where retrenchments have already started.

To hear the rest of the conversation, listen below:


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