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Auto industry strikes brake car production in S.Africa

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Workers on strike hold a placard asking for wage increases as they demonstrate outside Ford's plant in Pretoria on August 20, 2013. (AFP/File)

Component shortages during ongoing strikes have severely slowed car production at major manufacturers in South Africa, auto companies said Tuesday.

Volkswagen, Ford, Mercedes and Toyota reported stopped or limited production since Monday, while General Motors has not produced since last week as component manufacturer stoppages over wages entered a third week.

"Billions of rands are being lost in the component and original equipment manufacturer sectors every single day but the bigger damage has already been done -- destroying investor confidence," said National Association of Automotive Component and Allied Manufacturers (Naacam) executive director Robert Houdet.

A three-week strike by automobile workers in August cost the industry 50,000 cars in lost production, but just as it ended around 70,000 fuel attendants and component producers decided to down tools.

Volkswagen SA would keep its plant in small town Uitenhage in the Eastern Cape province closed until further notice, spokesman Matt Gennrich told AFP.

"This does not augur well for our hourly paid employees on the production lines as they will not be earning any income," he added.

General Motors South Africa has not been producing vehicles since last week, according to spokeswoman Denise van Huyssteen.

Ford spokeswoman Alisea Chetty reported "no production at the company's Port Elizabeth and Pretoria plants" for two days, but was likely to restart on Wednesday.

Meanwhile Mercedes Benz had "limited production" on its commercial vehicles line, said communications manager Lynette Skriker, while a Toyota SA spokesman also reported "local manufacturing has stopped" although assembly lines were operational.

Car manufacturers said they pin their hopes on new wage talks Wednesday.

Workers have rejected employers' offer of an eight percent increase the first year and seven percent annually the next two years, according to the National Union of Mineworkers of South Africa (NUMSA).

They are demanding "double digits", NUMSA general secretary Irvin Jim told AFP.

The strikes follow stoppages in mining and construction as competing unions make increasingly radical demands.

This may now spread to the automobile industry as militant labour group the Association of Mineworkers and Construction Union (AMCU) has launched a massive membership drive in the auto sector.

Car manufacturing contributes around six percent to Africa's biggest economy.

But producers warned against ongoing stoppages.

"Potential investors will think twice before doing business with South Africa because of the labour instability," said Naacam's Houdet.

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