The Congress of South African Trade Unions (COSATU) calls on unions in the automotive sector to wage a relentless battle in defence of workers' jobs after Mercedes Benz South Africa (MBSA) announced its plans to cut hundreds of jobs. With a 41.9% unemployment rate, we cannot afford to lose a single job. This will have a devastating impact on the community and value chains of Buffalo City.
On Thursday MBSA announced plans to cut 700 jobs at its East London manufacturing plant. The luxury car maker said it would enter consultations in line with Section 189(3) of the Labour Relations Act, after it resolved to restructure its operations from a three-shift model to a two-shift model. MBSA attributed its decision to restructure to deteriorating macroeconomic conditions and prolonged port challenges.
This development is astounding considering MBSA declared a staggering 35% rise in net profit after tax to R4,447 billion for the year 31 December 2023. A mere six months later, the global automaker is ready to retrench 700 employees, devastating the families that depend on their earnings.
MBSA is the local arm of German automaker Mercedes Benz AG, whose R10 billion investment in the East London factory was announced with much fanfare in 2018 as part of President Cyril Ramaphosa's investment drive. In 2021, the manufacturing plant started producing the C-Class sedan after an additional R3 billion injection. The investment was lauded as it would create jobs, transfer skills and uplift the surrounding area.
Now, following a slight slump in first quarter earnings, MBSA is ready to kill 25% of the jobs at the factory. Too often any suggestion of a change in the country's policies is met with threats of divestment by foreign investors. This stance must be reviewed if foreign investors are to be as fickle as MBSA. South Africa is beset with challenges. We need investors who are in it for the long haul. Dumping workers after one bad quarter does not bode well.
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MBSA is undoubtedly aware of the reforms underway at Transnet to ensure the ports are working efficiently. Business is working alongside government and organised labour to ensure factors that have been impending growth are addressed. MBSA must reverse this ill-considered and reckless attack on workers and their families.
COSATU unreservedly pledges support to its affiliate the National Union of Mineworkers, the National Union of Metal Workers of South Africa and other unions organising the automotive sector to go to battle and make sure not one of the 700 jobs are lost. South Africa's unemployment rate is frighteningly high, we cannot afford to lose any jobs.
The Federation will be engaging the Department of Trade, Industry and Competition as well as Employment and Labour to ensure this bloodbath is halted, in addition to ensuring the challenges at Transnet Freight Rail and Ports are resolved to ensure our export industries can take off and jobs can be created.
