THE Eastern Cape motor industry ground to a halt on the first day of a national strike that is expected to cost the industry R600-million in losses a day.
More than 20000 workers across the country stayed away yesterday, almost half of them in the Eastern Cape.
Motor manufacturers in the province – Volkswagen SA in Uitenhage, General Motors SA and Ford SA in Port Elizabeth and Mercedes-Benz SA in East London – reported a 20-30% turnout of employees yesterday, all of them administrative staff.
Production lines were at a standstill.
Wage negotiations between employers and the National Union of Metalworkers of SA (Numsa) deadlocked last week.
In Nelson Mandela Bay yesterday, about 450 GMSA workers picketed in front of the factory.
About 500 Ford engine plant workers in Struandale did the same, while about 1000 VWSA workers picketed in Uitenhage.
No incidents of violence were reported. Despite production continuing in the tyre manufacturing industry, concern is growing about the knock-on effect the strike may have on component manufacturers and suppliers to the auto industry.
VWSA communications manager Matt Gennrich said the company was unable to produce vehicles yesterday.
"Wage negotiations including the possibility of strikes is a part of doing business internationally," he said.
"Therefore, a strike that is resolved in a reasonable timeframe and without violence will have little impact on investor confidence.
"However, a protracted strike would have a potential impact, as would a sympathy strike for other sectors," Gennrich said.
GMSA communications manager Denise van Huyssteen said it was a challenge for the motor industry in South Africa to remain competitive against the growing number of high-volume and low-cost countries. The lack of labour stability was a major deterrent to investment and growth in the country.
"We were not able to continue with normal production today.
"At this stage, we are only proceeding with non-production operations in support of dealers and customers," she said.
Ford SA communications manager Alisea Chetty said production had been halted at its Silverton assembly plant and Struandale engine plant, which employed a total of 2090 workers.
"Leading up to the strike, we worked very closely with our suppliers in both plants to put contingency measures in place. There is a plan in place to recover as many lost units as possible," Chetty said.
Mercedes-Benz SA group corporate affairs divisional manager Mayur Bhana said the company, where 1700 hourly paid employees were on strike, hoped the negotiations would quickly lead to a comprehensive agreement.
"There is no production taking place in our plant. However, in terms of our contingency plans, MBSA continues to uphold its production planning for the current C-Class at this point in time.
"We expect to recover units lost due to this strike in the course of the next weeks and months," Bhana said
The negotiations started in April, with Numsa initially demanding a 20% wage increase across the board, but dropping it to 14% after a series of meetings with company bosses.
Employers initially offered 10% but after the negotiations hit a deadlock last week, they went back to their original offer of 5.6%.
Last week, employers reportedly asked for more time to consider the demands.
The Automobile Manufacturers Employers' Organisation (Ameo), which is negotiating on behalf of the employers, was optimistic the strike would end soon.
Ameo spokesman Thapelo Molapo said progress had been made since April.
"Initially, Numsa submitted a list of 24 demands and a lot of ground has been covered already. It is not a case of us waiting until the strike, but negotiating is a very long process. We are quite optimistic that we will reach an agreement within the next few days," he said.
Bay Numsa regional chairman Vusumzi Petshwa said they were planning on marching to employers this week to hand over their demands again.
"We have families and extended families that we need to support, so this does not only affect us but society in general," he said.
"We compromised when we went down from 20% to 14% and are still willing to listen to the employers' revised offer. We don't want anything less than a double digit increase. The ball is in their court now.
"When we will go back to work depends on the employers. The workers are very clear – they are not turning back until their demands are met."
National Association of Automobile Manufacturers of SA (Naamsa) director Nico Vermeulen said the R600-million a day loss was an estimate of the entire value chain of the motor industry.
"It includes the automotive component manufacturers who supply the motor manufacturers with tyres, gearboxes, etc.
"The strike will also have an indirect impact on these manufacturers in terms of loss of income and other downstream opportunities.
"Once the strike has run its course, the manufacturers will have to recover their losses. The longer the strike continues, the more difficult this will become," Vermeulen said.
He said the strike action also undermined South Africa's track record as a reliable supplier.
Tyre manufacturers Continental Tyre SA and Goodyear SA said production had not been affected by the strike yet.
Nelson Mandela Bay Business Chamber chief executive Kevin Hustler said because the automotive trade was the anchor industry in the metro, the longer the strike continued, the more detrimental it would be to business and the economy at local and national levels.
"It will affect the confidence of our foreign investors once again.
"We are already facing low levels of business and consumer confidence in the country, and this will have a knock-on effect through the rest of the economy," he said.