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Strike cripples vehicle exports

2010-08-17 07:56
South Africa's vehicle exports stalled as a strike by members of the National Union of Metalworkers (Numsa) continued on Monday, an industry spokesman said.

"If you cannot service the market, then labels source from other places because, remember, there is spare capacity because of the recession," Automobile Manufacturer Employers' Organisation (Ameo) spokesman Harry Gazendam said.

"Once you lose those export markets, it is very hard to get them back.

"You can't stockpile cars, because they take up space. Whatever stock they (local manufacturers) had is sold out," said Gazendam. Ordinarily, the local automobile industry produced 3 000 units a day, half of which were for export.

"None of those vehicles has been built since last Wednesday," said Gazendam.

Toyota SA spokesman Leo Kok confirmed that his company had ceased exports.

"What I can say is that production has halted since the start of the strike. From today [Monday] we are in a position where we can no longer export vehicles," said Kok.

"What is concerning for us is damage to image."

Kok said that Toyota factories in different countries were competing with each other by bidding on contracts.

"We are assessed on quality, cost, productivity and, of course, stability of supply. A strike like this puts us in a very bad light," he said.

While present exports were under contract, the strike's affect on productivity would likely be a consideration in future bidding.

"We bid against other manufacturing plants. When it's fresh in the memory, it does affect the bidding," said Kok.

Toyota's output of 220 000 vehicles a year was aligned for exports as the domestic market could not absorb that many vehicles. Losing export contracts would have an adverse impact on the company.

Kok said the strike came at a bad time as Toyota had been increasing production due to global demand rising in the aftermath of last year's economic turndown.

Numsa workers began their strike on Wednesday. They were demanding a 15% across-the-board wage increase, a 100% lay-off payment and the scrapping of labour brokers.

They were also demanding that working hours be reduced to eight hours a day from Monday to Friday, and six months paid maternity leave.

The union said that employers were sticking to an offer of a 7% increase.

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