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Suzuki’s new Swift hatch and sedan in SA

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VWSA 'on brink of disaster'

2007-09-19 16:06
Johannesburg - Volkswagen SA was "on the brink of disaster" because of the motor industry components strike, managing director David Powels said on Wednesday.

He said the six-day-old stoppage had so far cost the company a production loss of 500 cars per day.

"The component industry and Numsa [National Union of Metalworkers of SA] need to realise that they are holding thousands of people's livelihoods and the industry's future to ransom."

Powels said the company's Uitenhage plant had been brought to a standstill and the company was unable to fulfil critical export orders.

National Union of Metalworkers of SA (Numsa) members in the motor industry downed tools a week ago in protest over their wages.

More plants close doors

The strike has seen several other motoring manufacturing plants also closing their doors temporarily as parts became unavailable.

They are DaimlerChrysler, Toyota SA, Nissan SA, and BMW.

General Motors said on Wednesday it had also ceased some operations at two its plants.

"We closed some of our plant operations from today [Wednesday] and have only been able to continue with limited production," said spokesperson Denise van Huyssteen.

These were Port Elizabeth plants Struandale - responsible for production of the Hummer, Corsa Utility and Corsa Light vehicles - and Kempston road which produced Isuzu bakkies and trucks.

Powels said the Volkswagen Group, with its home base in Germany, had reservations about its South African company playing a meaningful role in the group's worldwide supply chain.

'Industry could collapse'

"Without export business, the vehicle and component manufacturing industry in South Africa will collapse," he said.

"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."

About 1 500 jobs at Volkswagen SA would be lost. Another 3 500 employees in the service and component industry could also lose their jobs.

"Unless an immediate solution is found to this stand-off, the loss of export contracts and the resultant loss of jobs will become a reality," he said.

He said industry employees and their families in the Nelson Mandela Metro would be hardest hit by the strike.

'On the brink of a disaster'

"We are on the brink of a disaster," he said, adding that the strike came on the back of the recent tyre industry strike.

"Our production was adversely affected forcing Volkswagen of South Africa to spend millions of rands air freighting thousands of tyres from Europe to the plant in Uitenhage to ensure continued production."

Van Huyssteen said General Motors was concerned about the viability of the motor industry, in particular its export contracts.

She said the Hummer export contract was 10 000 a year but the company supplied to the local market and there was limited export to some Southern African countries.

The South African plant is only one of two that produces Hummers in the world.

"There is only one plant in the world, other than ourselves, that does Hummer," she said.

Van Huyssteen said it was difficult to quantify how much the company had lost both in terms of financial costs and production.

"We will have to make up the loss. We will have to work overtime to make up loss in production," she said.

Talks between the union and the Retail Motor Industry (RMI) continued in Randburg on Wednesday.

The RMI has offered a raise of between 8.5% and 10% based on the workers grading.

Numsa is demanding a 9% increase, a minimum wage of R2 200 a month or R509 a week for those paid on weekly basis.

Spokesperson Mziwakhe Hlangani said on Wednesday morning the union was optimistic that the parties would resolve the issue.

RMI was not immediately available for comment.

- Sapa


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