About 30,000 South Africa Auto Workers Walk Off The Job; Toyota, GM, Ford Auto Exports Affected; BMW Strike Enters Second Week

  @angeloyoung_a.young@ibtimes.com on August 19 2013 9:52 AM
Toyota car factory in Durban South Africa
People walk near Toyota Motor Corp's Durban car factory, on October 4, 2012. Reuters

Tens of thousands of South Africa auto assembly workers walked off the job Monday after their demands for a 14 percent pay raise was rejected by top automakers, including Toyota, Ford and General Motors, setting the stage for the kind of sector-wide work stoppages that has struck the country’s mining sector for more than a year.

At the Mercedes-Benz South Africa (MBSA) plant in East London, about 1,700 workers walked off the job while about 3,000 employees at a Volkswagen plant in Uitenhage, 190 miles to the southwest of East London, joined the strike along with about 2,000 workers from a plant owned by General Motors in nearby Port Elizabeth. In all, about 30,000 auto assembly workers are participating nationwide.

The strike started today,” Castro Ngobese, a spokesman for the National Union of Metalworkers of South Africa (NUMSA), told Bloomberg by phone. “There are no negotiations, since they broke down. We are waiting for employers to submit a revised offer.”

NUMSA initially demanded a 20 percent pay hike while the automakers are holding firm on a 6 percent pay hike, in line with South Africa’s central bank inflation growth estimates for the year. The dispute is part of negotiations to replace a three-year wage settlement that expired on July 30.

The Automobile Manufacturers Employers Organisation, which represents the automakers, says a prolonged strike would do reputational damage that would take a long time to recover from. The country has been hit with a series of mining strikes, including one in which 34 workers at a platinum mine in Marikana owned by Lonmin PLC (LON:LMI) were fatally gunned down by police last year.

Les Holbrook, director of the East London-based Border-Kei Chamber of Business, told the South African news site DispatchOnline that the shutdown of auto production will have a ripple effect across the country’s manufacturing supply chain and “sends poor signals to investors.”

Bayerische Motoren Werke AG (FRA:BMW) is already a week into a strike at its plant in Rosslyn. Some 2,000 workers walked off the job at the German automaker’s 45-year-old factory, the first one it built outside of Europe.

South Africa hit a historic peak of auto production in 2008, churning out 284,000 units. The recession knocked production down and the sector is still in recovery mode.

The auto industry accounts for about 6 percent of South Africa’s economy and makes up 12 percent of its exports, according to Reuters.

Toyota Motor Corp. (NYSE:TM) has a plant in Durban that makes the Corolla sedan, the Hilux small pickup and other brands. Ford Motors Co. (NYSE:F) has two facilities in South Africa employing about 4,500 workers: an engine factory in Port Elizabeth and an assembly plant in Silverton.

General Motors Co. (NYSE:GM) operates the Struandale plant in Port Elizabeth that makes the Opel Astra compact sedan and Corsa mini. Nissan produces cars in Pretoria. 

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