Automakers might have to scout for new “cheap labour” locations after South African auto workers joined their counterparts in China by launching a strike demanding for higher pay. Toyota, Nissan, GM and BMW were among carmakers affected by the strikes.
Luxury brand BMW closed its Rosslyn factory outside Pretoria, losing production of about 250 cars a day, company spokesman Guy Kilfoil revealed. At the same town, Nissan’s shut plant is losing 220 vehicles a day. Over at Port Elizabeth, GM stopped its assembly lines. Toyota, the world’s top automaker, halted output at its Durban plant, which produces the Corolla, Hiace, Fortuner and Hilux, losing 520 units a day.
As a whole, South African car factories will lose production of more than 2,100 vehicles a day because of a the strike, the Automobile Manufacturers Employers Organization (AMEO) said. About half of that output is destined for export markets. South Africa’s car and car-part makers are the biggest manufacturing exporters in the country, accounting for about 6% of the nation’s gross domestic product.
Carmakers have offered a 7% pay rise in a three-year agreement. The National Union of Metalworkers of South Africa wants a one-year agreement and increases in bonuses and sick-leave pay. NUMSA estimates that 31,000 workers participated in the open-ended strike.
Union demands are “unrealistic and do not take into account the highly competitive nature of the global auto industry, as well as our relative lack of competitiveness when comparing our costs to auto manufacturers in other countries,” AMEO was quoted as saying.