Volkswagen South Africa is ”on the brink of disaster” because of the motor-industry components strike, MD David Powels said on Wednesday. The six-day-old work stoppage has so far cost the company a production loss of 500 cars per day.
”The component industry and Numsa [National Union of Metalworkers of South Africa] need to realise that they are holding thousands of people’s livelihoods and the industry’s future to ransom,” he said.
Numsa members in the motor industry downed tools a week ago in protest against their wages.
Volkswagen’s Uitenhage plant has been brought to a standstill and it is unable to fill critical export orders. The strike has also seen the Daimler-Chrysler, Toyota and Nissan manufacturing plants in South Africa closing their doors temporarily.
BMW spokesperson Guy Kilfoil said on Wednesday the strike had not affected the company’s manufacturing plant in Rosslyn. It had closed the plant for routine maintenance for two weeks and it was expected to be producing by Monday.
”It just so happened that our maintenance shutdown happened before the strike started. However, if the strike has not ended by close of business tomorrow [Thursday], we will not be able to produce on Monday,” he said.
General Motors has ceased some operations at two its plants in Port Elizabeth — Struandale, responsible for production of the Hummer, Corsa Utility and Corsa Light vehicles, and Kempston Road, which produces Isuzu bakkies and trucks.
”We closed some of our plant operations from today [Wednesday] and have only been able to continue with limited production,” said spokesperson Denise van Huyssteen.
Volkswagen’s Powels said the group, with its home base in Germany, has reservations about its South African company playing a meaningful role in its world supply chain.
”Without export business, the vehicle- and component-manufacturing industry in South Africa will collapse,” he said. ”If we lose our export business contracts, we can take 36 000 cars out of our annual production plan for 2008 and beyond. This is approximately one-third of our total production.”
About 1 500 jobs at Volkswagen South Africa would be lost. Another 3 500 employees in the service and component industry could also lose their jobs.
”Unless an immediate solution is found to this stand-off, the loss of export contracts and the resultant loss of jobs will become a reality,” he said, adding that industry employees and their families in the Nelson Mandela metro will be hardest hit by the strike.
”We are on the brink of a disaster,” he said, adding that the industrial action comes on the back of the recent tyre-industry strike. ”Our production was adversely affected, forcing Volkswagen South Africa to spend millions of rands air-freighting thousands of tyres from Europe to the plant in Uitenhage to ensure continued production.”
Van Huyssteen said General Motors is concerned about the viability of the motor industry, in particular its export contracts.
She said the Hummer export contract comprises 10 000 a year, but the company supplies the local market and there is limited export to some Southern African countries.
The South African plant is only one of two that produces Hummers in the world. ”There is only one plant in the world, other than ourselves, that does Hummer,” she said.
Van Huyssteen said it is difficult to quantify how much the company has in both financial costs and production. ”We will have to make up the loss. We will have to work overtime to make up loss in production,” she said.
Talks between Numsa and the Retail Motor Industry (RMI) continued in Randburg on Wednesday. The RMI has offered a raise of between 8,5% and 10% based on workers’ grading. Numsa is demanding a 9% increase, as well as a minimum wage of R2 200 a month or R509 a week for those paid on weekly basis.
Negotiations to end the strike would continue late into Wednesday evening, Numsa said.
”The negotiations are still continuing. We expect them to go on late into the night,” Numsa spokesperson Mziwakhe Hlangani said at about 4pm. — Sapa