Carmakers including General Motors Co. (GM:US) and Ford Motor Co. (F:US) will resume production at their South African plants tomorrow as employees in the metals and engineering industry return to work after a four-week strike.
General Motors is “planning to run at normal production” after a stoppage at its plant in Port Elizabeth, Eastern Cape, spokeswoman Denise van Huyssteen said by phone. Dearborn, Michigan-based Ford and Toyota Motor Corp. (7203) of Japan plan to increase the number of shifts to compensate for production lost during the walkout, the companies said.
The strike led by the National Union of Metalworkers of South Africa affected the automotive industry as supplies from spare-parts manufacturers dried up. About 220,000 South African metalworkers are returning to work this week after labor groups agreed to a three-year wage deal, ending a stoppage that threatened growth in the continent’s second-biggest economy.
“We have lost approximately 4,000 units,” Ford spokeswoman Alisea Chetty said in an e-mailed response to questions. “We plan to increase our production over the next few months to recoup the lost units.”
Bell Equipment Ltd. (BEL), a manufacturing company based in Richards Bay, near Durban, was among producers that reported the return of striking employees today. Plans are now under way to restore lost output, it said. The majority of striking employees at Scaw Metals Group, 74 percent owned by South Africa’s Industrial Development Corp., also returned to their jobs, according to the company.
The walkout started on July 1 and cost the manufacturing and engineering industries about 300 million rand ($28 million) a day, according to the employers. The Steel and Engineering Industries Federation of Southern Africa last week offered lowest earners a 10 percent annual wage increase for three years to end the strike, a deal that’s been accepted by Numsa and smaller labor groups such as Solidarity.
That compares with an annual inflation rate of 6.6 percent in June, unchanged on the previous month. South Africa’s unemployment rate, the highest of more than 40 emerging markets tracked by Bloomberg, increased to 25.5 percent in the second quarter.
“We urge all our members to report for work,” Irvin Jim, general secretary of Numsa, told reporters in Johannesburg yesterday. “The settlement offer has been overwhelmingly and unanimously accepted by our members.”
The metalworkers strike affected production at about 12,000 companies including construction and engineering group Murray & Roberts Holdings Ltd., beverage-can maker Nampak Ltd. (NPK), as well as international carmakers.
The strike, which followed a five-month work stoppage at platinum mines, will curb 2014 economic growth by at least 0.3 percentage point, said Mike Schussler, chief economist at research group Economists.co.za.
“There is no doubt that the economy suffered major direct losses in this strike,” Schussler said by phone today. “The indirect impact, like carmakers which could not get components, could be even bigger.”
The rand weakened 0.3 percent to 10.5967 against the dollar as of 6:04 p.m. in Johannesburg.
The National Employers’ Association of South Africa, which represents about 3,000 small- and medium-sized companies, won’t sign the agreement today as its members can only afford an 8 percent increase, Chief Executive Officer Gerhard Papenfus said by phone. Neasa will go to the Labor Court if the deal is extended to all companies, he said.
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