Updated 27/11/13 to include additional comment.
Transport workers affiliated with the South African Transport and Allied Workers Union (SATAWU) went on strike last Thursday (November 14) in Johannesburg, a move which could affect the local distribution operations of such OEMs as BMW, Mercedes-Benz, Nissan and Volkswagen.
Around 3,000 workers were reported to have taken action in the latest bid to increase wages: currently they are being offered 10% higher rates for next year, followed by an 8% rise in 2015. However, the demand that 12% be met has resulted in a stalemate.
The latest dispute comes on the top of extensive disruption to car manufacturing in South Africa through 2013. Extensive strike action by the National Union of Metalworkers of South Africa (NUMSA), affecting both car plants and component supplier facilities, ran through August and September and caused widespread closures. The action has left many of the leading carmakers struggling to regain lost production and is estimated to have cost the industry an estimated $2 billion according to the South African Chamber of Commerce and Industry (read more here). The car industry accounts for around 6% of South Africa’s GDP.
It is feared the action could further impact South Africa’s reputation as an automotive manufacturing base. Hylton Gray, CEO of Grindrod Logistics Automotive, told Automotive Logistics: “Following the widespread industrial action in the automotive sector in August and September, further strikes by transport workers who are members of TAWU, SATAWU and THOR have commenced... Some of the suppliers to the motor industry that belong to the bargaining council, such as vehicle distribution businesses, are affected by the strike." Grindrod Logistics delivers vehicles on behalf of OEMs. "The strikes have resulted in slower delivery. Negotiations are underway and we hope that there will be a resolution soon," said Gray.
However, the major manufacturers stated that the impact of the latest action would have less impact than the previous action. “This strike has not impacted our operations, as the majority of our logistics services providers are not affiliated with this Union,” said a spokesperson for GM South Africa.
Similarly, a spokesperson for VW South Africa (VWSA) told Automotive Logistics: “The strike will have no serious consequences for VWSA, at worst customer deliveries may be delayed for a few days. These will be no impact on exports, or production in any way.”
BMW South Africa is reported to have lost production of 11,000 cars while workers were striking. BMW was particularly affected by the strike action during the summer. A spokesperson said that because the factory runs 24-hours a day, there is no possibility of making up lost units.
Negotiations between automotive representatives and the SATAWU union are ongoing. SATAWU offered no comment on the situation.