Business
South Africa: Industrial action cripples auto industry
South African Workers at vehicle assembly plant. PHOTO/Volkswagen South Africa
South Africa’s auto manufacturing industry came to a near standstill on Monday when about 30,000 workers downed tools, adding to the labor woes of the continent’s largest economy which has recently been hit by labor unrest at its mines.
The stoppage would cost the industry about ZAR 600 million (US$ 59 million) a day in lost production, the National Association Automobile Manufacturers of South Africa (NAAMSA) said.
“The industrial action affects the entire value chain of the industry,” NAAMSA director Nico Vermeulen said.
Five of the seven companies operating in the South African auto sector, including Toyota, Ford and General Motors, said production had been halted or affected.
Underpinned by government incentives, the industry contributes at least 6 percent to gross domestic product (GDP) and accounts for 12 percent of exports.
A fresh round of labor unrest will be a political headache for President Jacob Zuma and the ruling African National Congress (ANC) ahead of elections next year.
The strike was called last week by the National Union of Metalworkers of South Africa (NUMSA), its largest manufacturing union, which wants pay hikes of 20 percent for its members, compared with inflation at 5.5 percent.
