Cape Town - The decision by Denel chief executive Shaun Liebenberg not to renew his contract with the arms manufacturer *1 will cause uncertainty among its employees, trade union Solidarity said on Friday.

"The more so in view of the fact that the company is only halfway through its restructuring programme," it said in a statement.

Liebenberg announced on Monday this week he would not be renewing his contract when it expired at the end of May.

In a radio interview earlier this week, he said there were plans he had interrupted *2 when he committed to spending three years at the Denel helm, and he wanted to return to these *3.

"I was busy with a number of other activities, and in fact was about to embark on a completely new direction for my life, and I then made this commitment to come on board and I am just really reverting back to the position I was in three years ago," he said.

Liebenberg is widely credited with having taken the steps necessary to move Denel back toward profitability.

Solidarity also voiced concern over the choice of his successor.

"Liebenberg's business acumen brought about a positive turnaround in the company's image *4. His transparency at all levels reassured both trade unions and employees.

"Appointing the wrong successor can undo the hard work of two years within a few months," it warned.

With acknowledgements to Sapa and Business Report.