Tue Jul 1, 2014 6:09am EDT
* NUMSA is country's largest union
* Union demands wage hikes double inflation rate
* Former ANC ally has fallen out with ruling party
* Strike follows 5-month platinum stoppage (Adds details)
By Tiisetso Motsoeneng and Stella Mapenzauswa
JOHANNESBURG, July 1 (Reuters) - More than 220,000 South African engineering and metal workers launched a strike over wages on Tuesday, hot on the heels of a crippling platinum dispute and dealing a further blow to an already weak economy.
Members of the National Union of Metalworkers of South Africa (NUMSA), the country's largest union, and other smaller unions marched in cities including the commercial capital Johannesburg, Cape Town and Durban, NUMSA spokesman Castro Ngobese said.
"There are no talks at the moment and none are scheduled," he said. Workers are demanding a 12 percent wage hike, double the inflation rate, while employers are offering 8 percent.
Local media reports earlier said NUMSA had revised its demand down to 10 percent and employers had raised their offer to 8.5 percent but Ngobese said this was not true.
South Africa is still reeling from a five-month strike in the platinum mines that ended with a wage settlement last week, but not before dragging the economy into contraction in the first three months of the year.
The latest strike will likely hit the operations of companies like construction and engineering firms Murray & Roberts and Aveng Ltd , both involved in building two power stations for state-owned Eskom to mitigate South Africa's energy shortage.
Auto parts makers such as Dorbyl will also be hit, raising fears that a prolonged stoppage could affect production in the important automotive sector.
Ken Manners, vice president of the South African national automobile components industry body NAACAM, said as many as 20 companies supplying Toyota Motor Corp, Ford Motor , and General Motors are affected.
"We have taken contingency plans, looking at stocking up on parts and there has been greater inter-company cooperation to try and create a buffer from the strike. The impact will really be felt if the strike is prolonged, more than a week or two," Manners told Reuters.
POWER UTILITY ALSO TARGETED
NUMSA will also picket Eskom headquarters on Wednesday to press for wage increases.
Eskom supplies almost all the electricity for Africa's most developed economy and is deemed an essential service, making strikes illegal.
But NUMSA General Secretary Irvin Jim hinted at the weekend that workers would defy the ban, saying the union might have "no option but to allow our members to liberate themselves".
Other companies that could be affected include Africa's biggest packaging firm Nampak, electrical cables maker Reunert and unlisted steel maker Scaw Metals.
Scaw Metals, one of the biggest steel makers in South Africa, said no production was taking place at its plants because attendance was "very low".
"We are talking about probably 80 percent of employees not reporting for work," said Bheka Khumalo, head of Human Resources at Scaw Metals.
Scaw Metals, which supplies steel for mining and construction, employs about 5,000 people. Dlamini said the strike could result in revenue losses of about 33 million rand ($3.11 million) a week and 20,000 tonnes worth of output losses.
Steel and metals manufacturing directly accounts for a fifth of the factory sector, and the impact on the economy of the NUMSA action will be heavier than that of the platinum strike, Barclays Africa said in a note.
The rand was little changed while the share prices of companies affected had also moved little by mid-day.
NUMSA, once a political ally of the ruling African National Congress, fell out with President Jacob Zuma's government over policy last year. ($1 = 10.6304 South African Rand) (Additional reporting by Wendell Roelf in Cape Town; Editing by Ed Stoddard and Ruth Pitchford)
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