Gordhan tries to stabilise auto sector

Gordhan says it’s concerning that BMW has halted its plans to expand local plant capacity.

Employees affiliated to Numsa returned to work yesterday following a four-week strike. Picture: Susan Herbert/iWitness

JOHANNESBURG - Finance Minister Pravin Gordhan says government will speak to car manufacturers in a bid to stabilise the industry which has lost around R20 billion due to industrial action.

Around 30,000 car industry employees affiliated to the National Union of Metalworkers of South Africa (Numsa) returned to work yesterday following a four-week strike after unions signed a three-year wage deal.

German car manufacturer BMW said last week the strike had derailed its plans to expand operations in South Africa.

Gordhan says it's concerning that BMW has halted its plans to expand local plant capacity.

BMW lost 13,000 units of production during the strike action which cannot be recovered, while the sector as a whole has lost R20 billion and slashed exports by 75 percent.

The industry approached government raising concerns about the damaging effects of the strike and the impact it could have on the economy.

Gordhan says discussions will take place to highlight the importance of the sector and the role it plays in providing jobs.

Economist Dawie Roodt has also warned that South Africa's economy can never fully recover from the losses suffered during the strike.

"Some international investors actually indicated that because of the way we manage our labour relations in South Africa, they are not going to reinvest in South Africa. They're looking for other places to start manufacturing certain models of cars."

But as one strike ends, another looms.

The South African Municipal Workers Union (Samwu) has warned the South African Local Government Association (Salga) to brace itself for a nationwide strike in coming weeks.

Samwu is demanding a higher housing allowance and maternity leave for its members, claiming the association is not willing to negotiate over these issues.

The union's Tahir Sema accused Salga of intransigence.

"Sadly, the employer has refused to negotiate on these two very important demands. The employer body has indicated that they are not willing to talk on these issues since they have monetary implications."