South Africa’s once-booming automotive sector has been hard hit by the global economic downturn. Now the industry’s talking bail-out.
According to the National Association of Automobile Manufacturers of South Africa (Naamsa), new car sales for February were down 34% compared with February last year and exports of South African-produced vehicles were down 27%. The National Union of Metalworkers of South Africa (Numsa) says 40 000 jobs have been lost in the automotive and allied workers sector.
Rosslyn is the manufacturing hub of Gauteng’s automotive industry. It is a town of wide roads, dusty pavements and tall fences, behind which stand the BMW and Nissan manufacturing plants. It is also the base for Nissan Diesel, which produces heavy vehicles, and a host of components companies that make everything from silencers, shocks and exhausts to dashboards, car seats and safety belts.
The overalled men and women who disappear through the massive security gates each day commute to work by taxi from neighbouring communities such as Soshanguve, Mabopane and Ga-Rankuwa. These people bear the brunt of the current crisis.
This week a team from the Mail & Guardian visited Rosslyn to take a look under the bonnet of the local industry.
The bosses
At the Nissan automaker plant in Rosslyn, they’re trying to save jobs. Pat Senne, general manager of corporate affairs and communications, says the company has already implemented voluntary retrenchment, retraining and redeployment. But forced redundancies could become a reality soon. She says the company has put together an ”after-care programme” to assist those retrenched with financial planning, CV building and psychological help.
Workers at Nissan will soon go on to shorttime, but the company hopes that it won’t be for long. Nissan estimates that output volume will increase to 44 000 units by the end of the year, as it starts producing the Renault Sandero and the NP 200 Nissan. This is part of a R1-billion Nissan-Renault investment in the manufacturing facility announced last July.
Fritz Tijaard, general manager of manufacturing at Nissan Diesel in Rosslyn, says although production has decreased by 50% and staff has been cut by 48% no one has had to work shorttime and there have been no involuntary retrenchments.
Tijaard says the company has ”a really good, positive labour force who will probably do anything for us”, adding that the company also has an ”extremely good, open” relationship with Numsa.
Nissan Diesel has offered workers voluntary retirement and stopped offering overtime work. About 20% of the direct labour force has been placed in a Seta-approved learnership programme and will re-enter the workforce in May.
No jobs have yet been lost at the BMW plant and, according to Benedict Maaga, group automotive communications manager, there are no plans for cuts. ”If things stay the way they are we should be fine,” he says. Maaga puts this down to the flexible working-time model that the company has in place, which allows workers to ”bank” overtime hours and ”redeem” them during slow production periods.
The National Association of Auto Component and Allied Manufacturers (Naacam) is less optimistic. Executive director Roger Pitot says production volumes in the components industry are down by about 35% and most component companies have ”taken out” about 20% of their staff. He says the number of jobs lost in the components sector is about 16 000. About 2 000 are from Rosslyn.
”All we can expect is that they [government] facilitate loans or bridging finance through the IDC and other bodies,” says Pitot.
Alet Rousseau, human resources manager at SAS Automotive RSA, which supplies cockpits and front ends to BMW, goes further. ”Financing and cash flow remain a challenge and we look forward to a government bail-out,” she says.
Numsa hasn’t ruled out the idea of a government bail-out but, at its job security conference last week, it made several demands, including a moratorium on retrenchments, the exclusion of suppliers who use labour brokers and an end to the employment of contract and casual workers.
These workers may well be the ones who suffer most.
The workers
Tutu Mafoko (43) was retrenched from her job at Rosslyn’s Automotive Leather Company in January. She used to earn R810 a week. Now she survives on a monthly R1 800 unemployment grant from the Unemployment Insurance Fund (UIF).
Mafoko, who lives in Ga-Rankuwa with her two children, doesn’t know what she’ll do when the eight-month grant period ends. She, like other retrenched workers, still hopes that the situation will improve and that the company will ”call us back”.
But Mafoko remembers the mood on the factory floor when everyone ”could see that things were not easy in the company” and knows that she should not hope for miracles.
At least Lucky Mashilo still has a job. The 26-year-old is a temporary labourer working at Nissan on a three-month, open-ended contract. But he’s under no illusions about long-term security.
If Mashilo gets laid off he’ll be given just three days’ notice and he won’t be eligible for any benefits. He says he and his fellow workers feel they have to prove they’re ”committed to the company” if they want to escape retrenchment. In practical terms, says Mashilo, those workers who agree to do overtime and be on standby ”without making a fuss” are the ones who are most ”likely to survive”.
Permanent staff can opt for shorter working weeks or for retrenchment packages. People such as Lucky Mashilo have fewer options. In the end it may all come down to a show of loyalty.
The traders
Shelves are fully stocked and freshly grilled chicken is ready at the food counter, but there are few customers in Nebri Redouane’s Buy Rite supermarket.
Now that hundreds of Rosslyn’s factory workers have been retrenched, local business people such as Redouane are struggling to stay afloat.
Redouane’s monthly turnover has slumped by 20% since October. With a monthly rental of almost R50 000, he is struggling to cover his expenses and has had to put his staff on short-time.
”I opened a food take-away last year … but even that is not making money. There are no customers.”
Outside Nissan’s plant on Ernest Oppenheimer Street informal traders line the pavement, stirring pots and chopping vegetables in anticipation of the workers’ tea break. Their livelihoods depend on the once-thriving motor industry. Most of the vendors still eke out a living selling food to factory workers, but even this basic income has dwindled.
Deborah Manamela travels from Ga-Rankuwa to Rosslyn every morning at 6am. From her makeshift kitchen of cardboard and crates she sells pap and meat to workers. She’s the sole breadwinner in the family and supports her diabetic husband and five children.
Last year Manamela made as much as R4 000 a month, but now she’s lucky to pocket R150 on a good day. ”Business is very bad since the workers got retrenched. They [employees] come to buy from me, but not so much like before … Some of them can’t afford to pay.”
These days factory workers often share a plate of food to save money. If a member of their ”food club” is retrenched or works a three-day week, the others will have to settle for something cheaper, or even just an apple.
Diraroane Mahlangu holds a master’s degree in public administration but is unemployed. To make ends meet she travels from Soshanguve to run a lunch shop at the Automotive Supplier Park. Mahlangu offers an impressive menu — including chicken feet and tuna pasta — to workers who can barely afford to pay about R20 a plate.
”Business is just terrible. We are competing with the canteens [inside the Supplier Park] and the increasing food prices. Sometimes I feel like I’m just wasting my time here because I’m not making any profit,” says a frustrated Mahlangu.
To supplement her income she sells food at stadiums when soccer matches are played and also runs a small shuttle service.
As with the automotive companies, Mahlangu and other traders in Rosslyn have little hope of sales improving any time soon. For them there is no possibility of a government bail-out — there’s just a life of increasing uncertainty, measured by the number of plates of pap they manage to sell each day.