As the strike action affecting Transnet’s South African logistics network heads toward the end of its second week with no resolution in sight, there are increasing concerns amongst the country’s carmakers that production and logistics will be badly affected.
The South African Transport and Allied Workers Union (Satawu) and the United Transport and Allied Trade Union (Utatu), which between them represent 85% of Transnet’s 54,000 staff, are striking over demands for a 15% pay increase, above the 11% offered by Transnet. Talks aimed to resolve the dispute last weekend failed and the strike widened to include South Africa's Passenger Rail Agency (Prasa) on Monday, halting all commuter rail operations and affecting millions of passengers.
So far General Motors South Africa's production operations have not been affected said the company, but spokesperson Denise van Huyssteen told Automotive Logistics News there was a growing risk that ships carrying parts for South African vehicle assembly plants will bypass South Africa, increasing the risk of production stoppages “during or after conclusion of the strike”. Component exports are facing a growing threat of delays the longer the strike continues.
“We are very concerned about both the short and long-term impact of these actions on our ability to meet demand, particularly in terms of our automotive component and vehicle export business to other markets,” she said.
“Additionally, this would send a very negative message around the globe in terms of the competitiveness and reliability of South African manufacturers.
“We are working on various contingency plans in an attempt to limit the impact of the strike on our customers,” van Huyssteen concluded.
Meanwhile, BMW said that it is maintaining normal production of 250 vehicles a day at its Rosslyn plant thanks to inbuilt production and logistics flexibility and can continue to do so until the end of May. But it warned that difficulties could arise if the strike stretches beyond two weeks.
“We have mainly mitigated against the strike by getting local suppliers to increase our carry time of their parts–basically stock holding–before the strike took effect and airfreighting in any other components which are not produced locally as needed,” said BMW South Africa spokesman Guy Kilfoil.
But he went on to say that the consequences of the strike are having an impact on inbound and outbound operations.
“Where we do see an effect is in outbound logistics of export E90 3 Series and in terms of inbound logistics of CBU imports, but none of these effects are dramatic at this stage.
The strikes are the latest protests in the country ahead of next month's soccer World Cup, which is being held in Africa for the first time.