Strike threatens sustainability of auto export business

SOUTH AFRICA’S automotive
industry, which accounts for over 7%
of GDP, is in danger of being stalled by
strikes, warns Volkswagen South Africa.
David Powels, managing director
of VWSA, says that a less than speedy
resolution of the wage strike could
lead to job losses and see export
contracts being cancelled. He also
warns that the country’s vehicle and
component manufacturing industry
will collapse without export business.
VWSA is unable to meet its export
orders to Asia Pacific countries. “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,” says
Powels.
The manufacturer has also had to
spend millions on air freighting tyres
from Europe to its Uitenhage plant.
The automotive manufacturing
industry stands to lose millions of
rand and export contracts from the
ongoing wage strikes that are being
led by Numsa.
“The industry will become an
importer of fully built-up vehicles
and vehicle manufacturing plants will
be forced to dramatically scale down
operations,” he says.
“The component industry and
Numsa need to realise that they
are holding thousands of people’s
livelihoods and the industry’s future
to ransom. They need to resolve their
differences immediately in order that
we can get back to business and start
proving to the rest of the world that
South Africa is serious about becoming
globally competitive. Failure to do this,
will have major consequences.”
Volkswagen’s warning comes after
media reports from Germany that
the parent company was considering
moving production from South Africa
to Germany. These reports have since
been denied.