Thabang Mokopanele
20 September 2007
Johannesburg — MAJOR vehicle manufacturers warned yesterday that they faced the risk of losing export contracts and that thousands of workers could lose their jobs as talks to end the strike by workers at motor industry component manufacturers deadlocked yesterday.
The strike, now in its eighth day, has resulted in the crippling of the supply of critically needed components to assemble vehicles. Several motor manufacturing plants have closed as parts became unavailable.
Volkswagen SA (VWSA), Toyota SA, DaimlerChrysler SA, General Motors SA and Ford SA said yesterday they were losing production at the rate of several hundreds cars each day, and were unable to fulfil critical export orders. They warned that they could be forced to retrench workers if they lost their export contracts .
The strike is still no closer to resolution after wage negotiations between the National Union of Metalworkers of SA (Numsa) and the Retail Motor Industry (RMI) deadlocked again yesterday. Talks are expected to continue today.
At issue is a 9% wage increase on wages demanded by Numsa for all grades of workers for the next three years.
The RMI has since improved its offer to 8,5%-10% for different grades. RMI executive director Jakkie Olivier said an other dispute involved the union's demand for annual bonuses equivalent to three weeks of wages.
Numsa spokesman Mzwakhe Hlangani said the union would intensify the strike, getting all other sectors to pledge solidarity with it. But he said the union was still open to negotiations.
SA's biggest passenger car manufacturer, VWSA, said yesterday the strike was causing production losses of 500 vehicle s a day. MD David Powels said the strike was "absolutely unacceptable" as it had brought the plant in Uitenhage to a standstill.
"We are unable to fulfil critical export orders to countries in the Asia-Pacific region. The Volkswagen worldwide group based in Wolfsburg, Germany, regards this strike in an extremely serious light and now has serious reservations about VWSA playing a meaningful role in the Volkswagen group's worldwide supply chain," Powels said.
If the company lost its export business contracts, it could take 36000 cars out of annual production plans for next year and beyond. This, he said, could result in about 1500 jobs being lost in VWSA, and about 3500 in the service and components industries.
Toyota SA executive president Harry Gazendam said the company was losing 680 units a day while workers were losing R2m a day in wages.
"We cannot meet out delivery dates both for local and international clients. Our biggest concern with the export contracts is the future confidence that we might lose from Europe and other parts of the world, because we can't deliver on time," Gazendam said.
Ford said it was losing 300 units a day. "Our export contracts are indeed in jeopardy; we cannot deliver and as a result we get a lot of complaints from our clients who also cannot deliver to their customers," Ford spokesman Ben Pillay said.
General Motors SA vice-president for human resources Chris Thexton said the company had closed some of its plant operations yesterday and was able to continue with only limited production.
"We remain concerned about the impact of this strike action on the viability of the motor industry, particularly with regards to our ability to fulfil and secure export contracts. This sends a very negative message to the international community and puts our industry at a distinct disadvantage when competing for business on a global basis," Thexton said.
Nissan SA corporate services director Henry Grimbreek said on an average day the company produced 250 units, which amounted to an estimated negative turnover of about R8m.
Motor industry analyst Tony Twine said the strike had the potential to result in the cancellation of export contracts because companies could not just switch production on and off in a global supply chain. "Most likely it may deter future investments in vehicle assembly for both domestic and export markets."
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