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Automobile industry

South African Automobile Strike Hits Manufacturers, Affects Thousands of Workers

Strategic Insights

— 1 min read

The National Union of Metalworkers of South Africa (NUMSA) announced on Tuesday that it will resume negotiations with automobile manufacturers on Wednesday, following a one-day-old strike that has affected all seven manufacturers in the country. The strike, which involves pay demands and employment conditions, has caused the manufacturers to close plants, resulting in estimated losses of R110 million ($30 million) per day in lost production.

Key Takeaways:

  • The strike, involving 19,000 to 25,000 NUMSA members, has forced automobile manufacturers, including Volkswagen, Toyota, BMW, and Mercedes-Benz, to close plants.
  • The strike is expected to cost the manufacturers R110 million ($30 million) per day in lost production.
  • The strike could affect 80,000 workers employed by companies that supply components to the car manufacturers, and over 100,000 people employed in the service and dealership side of the industry.
  • Labor analysts have warned that the strike is in line with past years, but continued industrial disputes could negatively impact international investor confidence.
  • The South African government, led by President Nelson Mandela, is struggling to balance supporting workers' aspirations with creating an economy attractive to investors.
  • Labor leaders have acknowledged the need for increased investment and healthy industrial relations to rebuild the economy.
  • Foreign investors are concerned that South Africa's unit labor costs are increasing faster than almost everywhere else in the world.

Statistics:

  • The strike has caused estimated losses of R110 million ($30 million) per day in lost production for automobile manufacturers.
  • The strike affects 80,000 workers employed by companies that supply components to the car manufacturers and over 100,000 people employed in the service and dealership side of the industry.
  • The South African government has been in office for three months.
  • South Africa's unit labor costs are increasing faster than almost everywhere else in the world according to foreign investors.

Sources:

  • _The National Union of Metalworkers of South Africa_
  • _Andrew Levy and Associates_
  • Patrick Collings, Johannesburg Bureau, _The New York Times_
  • _The New York Times_, Johannesburg, August 2

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