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Solidarity has expressed serious concern following reports that employees at Denel PMP were informed during a general staff meeting that the division is unable to pay salaries for this month.
 
It has since also been reported that employees at Denel Dynamics have been informed similarly that their salaries will not be paid. This indicates a growing group-wide crisis rather than an isolated problem within a single division.
 
According to Derek Mans, network coordinator at Solidarity, the situation is completely unacceptable and deeply alarming, particularly in light of the far-reaching intervention measures introduced less than a year ago to stabilise Denel’s operations.
 
“In 2024, Denel PMP, in cooperation with Solidarity and the Denel Board, established a multidisciplinary task team – with active labour participation through two trade unions – to advise Denel’s executive management and board on a sustainable turnaround strategy for PMP,” says Mans.
 
The task team operated under approved terms of reference covering, among others, governance, safety, operations, funding, and sustainability. The turnaround process was managed as a project to accelerate implementation.
 
The team consisted of industry experts, former PMP executives, and experienced former Members of Parliament, including Mr Kobus Marais. The strategy document was finalised in December 2024 and submitted to the Denel Board, together with comprehensive recommendations and cost estimates.
 
At a formal board meeting on 18 February 2025, the Denel Board approved the implementation of the turnaround plan, estimated to cost approximately R120 million.
 
Less than a year after this approval, the following took place:

• Denel PMP has reportedly experienced four explosions, raising serious concerns about operational control, safety management, and maintenance.
• Employees at both Denel PMP and Denel Dynamics have been informed that salaries cannot be paid.
• There is no visible accountability for the failure to implement an approved and funded turnaround strategy.

“This inevitably raises the question: where are the consequences for this continued failure in execution and oversight?” Mans asks.
 
The growing salary crisis, now affecting more than one division, underscores a systemic governance and leadership failure at the group level. This is further aggravated by the continued absence of a permanent Denel Board, despite expectations that the appointment process would have been completed by December 2025.
 
“Solidarity has long warned that Denel cannot be stabilised through interim leadership structures, fragmented accountability and crisis-driven decision-making,” says Mans.
 
The following is now urgently required:

• The appointment of a new, permanent board with appropriate expertise in the defence industry, engineering, finance, and project execution.
• Consequence management for the non-implementation of board-approved strategies.
• A pragmatic management approach with zero tolerance for corruption.
• Serious consideration of public–private partnerships to restore sustainability, protect strategic capabilities, and secure jobs.

“Employees cannot continue to pay the price for governance paralysis and leadership vacuums. Denel’s strategic role, and the livelihoods of its employees, require decisive leadership, accountability and immediate intervention,” Mans emphasised.
 
Solidarity will continue to pursue all available avenues to protect its members and to hold those responsible accountable.

Issued by Solidarity