While the makers of Nissan are laying off workers, they have bought two luxury retreats for executives and clients. Mungo Soggot reports
IN the week that the company which builds Nissans kicked off a major retrenchment programme by sacking 200 workers, it has emerged that the car manufacturer has acquired two luxury retreats in the bushveld for its executives and clients.
Automakers, which has performed dismally on the Johannesburg Stock Exchange since its listing a year ago, confirmed this week it had one lodge at a game park in Northern Province and another under construction in the exclusive Leopard Creek golfing resort in Mpumalanga.
This week’s lay-offs at the company’s Rosslyn plant near Pretoria constituted the first phase of a retrenchment programme which will hit 900 employees.
The company’s representative, Johan Kleynhans, refused to say how much Automakers had paid for the retreats and how much it pumped into their monthly upkeep. “We are not willing to disclose this to the press or the public.”
He told the Mail & Guardian that the “motor industry, by its very nature, needs customer contact and corporate entertainment of various sorts. It makes economic sense [to have company-owned retreats],” he said, adding that the lodges provided employment.
Kleynhans said he assumed the National Union of Metalworkers (Numsa) had raised the cost of the retreats during its talks with management. Both retreats had been acquired around the time of the listing, but the Leopard Creek lodge was still being built. According to a representative of the South African Tourist Bureau (Satour), only members can obtain publicity material of the top-of-the-range resort.
Numsa, which has vigorously opposed the retrenchments, said the splurge on the retreats was a prime example of expenditure that was unrelated to the business of making cars. The union’s Tony Kgobe, who is heading talks with management, said Numsa also questioned the company’s policy of running duplicate offices in Johannesburg and Pretoria.
Kgobe said the company had not discussed with the union how best to cut costs, but had simply told it there had to be cutbacks and asked for help in implementing them.
He added that management had refused to discuss executives’ salaries and managers’ packages, indicating these matters were not the concern of the union. “We are dealing with people who are not open.”
It was unlikely the company would stop its retrenchments without some strike action, Kgobe said. The two sides had called in mediators from the Independent Mediation Services of South Africa who would start work next week.
Automakers’s shareprice on the JSE has plummeted since the company’s listing in October 1995. It started out at 565c, sank as low as 214c a share last month and yo- yoed between 234c and 250c on Tuesday and Wednesday. One industry analyst suggested this week’s price stabilisation stemmed from speculation that Nissan Japan would step in and rescue the South African operation, which also builds Fiat Unos.
Automakers’s performance has been hit by a number of external factors, including the rand’s collapse which has kicked up import costs, and increased competition.
The company’s profits for the financial year which ended in June were R128-million – way off the R157-million it targeted when it listed.
Automakers’s chairman, John Newbury, was not available for comment.