Bloomberg News

South African Union Ends Monthlong Car Parts Industry Strike

October 06, 2013

About 30,000 South African car industry employees will return to work tomorrow after the National Union of Metalworkers of South Africa accepted a wage offer from companies to end a monthlong strike.

The union accepted a 10 percent pay increase in the first year and an 8 percent raise in both the second and third years from major employers, Numsa General-Secretary Irvin Jim told reporters in Johannesburg today. Small-to-medium-sized companies will only raise wages by 9 percent in the first year, followed by two annual raises of 8 percent each, he said.

Workers at seven carmakers operating in South Africa, including Bayerische Motoren Werke AG (BMW) and Ford Motor Co. (F:US), went on strike in August and September, resulting in a loss to manufacturers estimated by the industry at 20 billion rand ($2 billion). This was followed by a stoppage by workers in the auto component and retail industries.

South African vehicle sales fell for a second month in September and exports dropped 75 percent as strikes hit carmakers’ operations, the Pretoria-based National Association of Automobile Manufacturers of South Africa said in an e-mailed statement on Oct. 1.

The strikes prompted BMW, the largest luxury vehicles manufacturer, to say on Oct. 3 that it would stop a planned expansion in South Africa.

Numsa’s leaders are seeking a meeting with BMW’s country managers to discuss the plans, which amount to “blackmail,” Jim said. The move is an attempt to prevent future strikes in the industry, he said.

BMW “can only be profitable if they continue to invest in South Africa,” Jim said. “They will not find the kind of cheap labor as they find here. We will not accept the BMW blackmail. We expect them to bring back that investment.”

Wage talks with tire producers will probably be resolved without the need for a strike, Jim said.

South African workers in mining, construction and aviation have also gone on strike this year to demand higher salaries, disrupting production and curbing economic growth.

To contact the reporter on this story: Franz Wild in Johannesburg at fwild@bloomberg.net

To contact the editor responsible for this story: Nasreen Seria at nseria@bloomberg.net


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