General Motors Co., Toyota Motor Corp. and competing carmakers in South Africa agreed to raise workers’ pay by 10 percent in 2010, ending an eight-day strike.
Wages will be increased by another 9 percent in 2011 and 2012, the Pretoria-based Automobile Manufacturers Employers Organization said today in a statement. Workers will return to their jobs on Aug. 23, the National Union of Metalworkers of South Africa said in a separate release.
The union, representing 31,000 employees in South Africa’s car industry, began the strike on Aug. 11. The seven-member automakers group estimated the walkout caused a production loss of about 17,000 cars. The union, known as Numsa, sought a 15 percent raise, more than double the 7 percent the employers offered. South Africa’s inflation rate was 4.2 percent in June.
“It’s become a trend, not necessarily a good one from an economic point of view, for settlements in the double-digit region, and that’s way above inflation,” Chris Thexton, chairman of the employers’ group, said in a phone interview from Port Elizabeth. “There’s a high premium in this contract. It allows for the industry to get back up and running.”
Transnet Agreement
Transnet Ltd., the state-owned operator of freight trains, ports and pipelines, gave workers an 11 percent increase in May to end an 18-day strike that crippled exports.
Numsa said earlier today that workers at gasoline stations, car-part makers and tire manufacturers may strike after wage talks collapsed. The union wants a 15 percent raise, while employers represented by the Retailers Motor Industry Organization and Fuel Retailers Association have offered a minimum of 6.6 percent.
Wages account for 10 percent to 20 percent of auto manufacturers’ costs, Thexton said.
The carmakers also agreed as of Jan. 1 to stop using companies known as labor brokers that provide contract workers. The employers will extend medical, pension and other benefits to short-term employees, the union said.
South Africa’s car and car-parts industry accounts for about 6 percent of gross domestic product and is the country’s biggest manufacturing exporter. The industry, which added 427 jobs in the second quarter for a combined workforce of 31,784, is one of the few that’s creating employment. The economy shed 61,000 jobs in the period, pushing the unemployment rate to 25.3 percent, the highest of 62 countries tracked by Bloomberg.
Domestic vehicle sales returned to growth in January after contracting every month for 2 1/2 years.
BMW
Bayerische Motoren Werke AG, the world’s biggest maker of luxury cars, lost production of 2,000 vehicles because of the strike and probably won’t be able to meet export targets this month, said Guy Kilfoil a spokesman for the Munich-based company in Pretoria.
“There is no way we will meet our export commitments for the month,” Kilfoil said in an e-mailed response to questions. “Whether we can meet our export targets for the full year is also questionable.”
General Motors, which shut its main assembly lines at the Port Elizabeth plant because of the strike, will resume full output on Aug. 23, the company said in an e-mailed statement.
“Whilst the dispute had been resolved, much work lies ahead to ensure that the industry becomes more competitive in order to ensure its longer term survival,” GM said. “Industrial action like this affects the viability of the industry.”
