The President of the National Association of Automobile Manufacturers of South Africa (NAAMSA), Dr Johan van Zyl, today warned that prolonged industrial action which had paralysed the operations at the seven major vehicle manufacturing plants in South Africa (BMW South Africa, Ford Motor Company SA, General Motors South Africa, Mercedes-Benz South Africa, Nissan South Africa, Toyota SA Motors and Volkswagen Group SA) had entered a critical phase and had also had a negative cascade effect throughout the automotive manufacturing and supply chain in South Africa.

The industrial action is about to enter the third week and will have major adverse consequences for South Africa.  The vehicle and automotive component manufacturing industry, including exports, accounted for approximately 30% of South Africa’s manufacturing output and about 4,5% of the country’s gross domestic product, whilst the broader South African motor industry, including retail/distribution/servicing and repairs, accounted for 7,5% of South Africa’s GDP.

Dr van Zyl said that the strike will result in lower economic growth, lower domestic and export production and sales, reduced industry profitability, substantial loss of income to workers, loss of revenue to the fiscus, lower foreign direct investment into South Africa and ultimately less employment.  Continuing, Dr van Zyl said “there are no winners in a strike situation in the vehicle manufacturing industry which provides stable employment with, by South African standards, attractive and high quality employment conditions, remuneration levels and benefits”.

Continuing, Dr van Zyl said that the double digit offer by employers was reasonable and highly competitive compared to settlements in other sectors and in relation to inflation. The industry is not just offering a very high across the board (ATB) increase but also a transport allowance, increase in shift allowance and short time allowance. The workers will also receive a cash allowance coupled to an additional across the board increase to equalise wages in the industry.  “This offer from the automotive industry employers amounts to a total increase of more than 30% over the three year period and is the best ever offered in the history of collective bargaining in the industry”.

We urge NUMSA, the industry’s trade union, to continue with their effort to bring the strike to an end and workers to accept the settlement offer.  We are looking forward to a speedy return by all of our employees to work.

(Comment by Bernard K Hellberg, Wheels2Buy’s motoring correspondent ) 

There is a distinct possibility that manufacturers/importers will eventually scale down their local assembly involvement and will strive to import more and more fully assembled vehicles. 

In the face of the Unions’ on-going militancy – which is undermining our currency and our standing as a reliable exporter nation – it makes perfect sense that companies such as AMH (importers of fully assembled vehicles such as Hyundai, Kia, Mitsubishi, etc) will never even consider assembling vehicles locally. 

In Germany, a well trained factory worker in the auto industry can earn up to €45 per hour. This is an astonishing R600 per hour in our by now decimated currency. There workers are extremely productive because they are well educated and well trained. 

However, even major manufacturers are beginning to feel the pinch of these high wages, and are relocating to lower-wage areas such India, Thailand and the Czech Republic, while high-wage countries such as Australia are closing down plants. 

Are we heading this way – not because our currency is strong – but because our workers are lazy and militant?

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