South African Auto Strike Cost Manufacturers 2 Billion

South African Auto Strike Cost Manufacturers $2 Billion

Car manufacturing contributes around 6% to Africa's biggest economy and accounts for roughly 12% of exports. Last year South Africa exported just under 280,000 cars.

PORT ELIZABETH -- The crippling three week strike in South Africa's motor sector cost manufacturers 50,000 cars in lost production, an industry representative said Tuesday.

Thousands of strikers returned to work after accepting an 11.5% wage increase, but on Monday employees at component manufacturers downed tools, which the industry says will again hurt production.

"They have to make up for the lost production of 50,000 vehicles," said Nico Vermeulen, director of the National Association of Automobile Manufacturers of South Africa (Naamsa).

Throughout the manufacturing chain these losses may add up to 20 billion rand (US $2 billion), he added.

"Although the vehicle manufacturers strike has just ended, the industry still faces a tragic and worrying situation with the starting of the other (strike) in the components sector," he told a press conference in southern city Port Elizabeth.

"It may be a question of days again before production grinds to a halt due to lack of components."

Component builders, mechanics and petrol attendants that are members of the National Union of Metalworkers of South Africa (Numsa) have been striking since Monday demanding "double-digit" raises. The union represents around 70,000 labourers -- around a third of the industry's total.

Manufacturers said they only had component supplies for four days.

At General Motors SA operations restarted on Monday but had to be scaled down with the new strikes, spokeswoman Denise van Huyssteen said.

Volkswagen South Africa would try to catch up the delays later this year, but "in some instances the lost production is lost forever," said spokesman Matt Gennrich.

"We can only comment on the impact of the fuel and retail motor industry strike after a few days," he added.

Meanwhile Numsa has vowed to continue industrial action.

Car manufacturing contributes around 6% to Africa's biggest economy and accounts for roughly 12% of exports. Last year South Africa exported just under 280,000 cars.

Copyright Agence France-Presse, 2013

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish