The South African auto workers strike that started last week shows no signs of abating, as talks between the Automobile Manufacturers Employers Organization (AMEO) and the powerful National Union of Metalworkers of South Africa (NUMSA) over the weekend failed.

The union’s “simple demands” include a one year-agreement, a 15% across-the-board wage increase, short time/lay-off payment at 100%, labour brokers to be scrapped, eight hour work days from Monday to Friday, Saturday work to be paid at 1 1/2 rates, and double pay on Sundays and public holidays.

NUMSA’s 15% wage increase is well above South Africa’s inflation rate, which was 4.2% in July. AMEO offered a 7% increase in the first year and a rise equal to consumer price inflation in the remaining two years. This was rejected by the strikers, which will continue to disrupt production.

Should AMEO set a trend by giving in to the “extortion”? South Africa’s auto industry is the biggest manufacturing exporter in the country, accounting for about 6% of the nation’s GDP, but production and exports have been crippled by NUMSA’s strike.

AMEO spokesman Harry Gazendam said: “If you cannot service the market, then labels source from other places because, remember, there is spare capacity due to the recession. Once you lose those export markets, it’s very hard to get them back,” he warned. South Africa produces 3000 cars a day, half of which were for export. “None of those vehicles has been built since last Wednesday,” he said.

Toyota SA echoes that view. “What worries us is the damage to our image. We are assessed on quality, cost, productivity and, of course, stability of supply. A strike like this puts us in a very bad light,” said spokesman Leo Kok. He added that Toyota factories in different countries were competing with each other for contracts and this black mark could harm future business. “We bid against other manufacturing plants. When it’s fresh in the memory, it does affect the bidding.”