Industryweek 5209 Cars Group Promo

South African Auto Strike Cost Manufacturers $2 Billion

Sept. 11, 2013
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

Popular Sponsored Recommendations

Beware Extreme Software

Sept. 24, 2023
As a manufacturer, you understand the importance of staying ahead of the curve and being proactive in your approach to technology. With the rapid pace of change in the industry...

How Manufacturers Can Optimize Operations with Weather Intelligence

Nov. 2, 2023
The bad news? Severe weather has emerged as one of the biggest threats to continuity and safety in manufacturing. The good news? The intelligence solutions that build weather ...

You Cannot Stay Competitive by Bolting New Technologies to a Legacy ERP

Oct. 20, 2023
Read this white paper to understand the benefits of shifting to a next-generation ERP system as part of a DOP.

How Digital Twin Technology is Empowering Manufacturers

Sept. 27, 2023
This FAQ delves into why this technology offers business value and considerations toward implementation.

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!