EXPERTS have warned that the latest round of industrial action in the auto industry will have a ripple effect on the economy, including a possible hike in interest rates. Eastern Cape vehicle plants are to grind to another halt tomorrow as supplies dry up because of a crippling strike in the components manufacturing sector.
RGT Smart economist Neal Bruton said: "The strike season holds some serious consequences for the country and will reduce [its GDP] ..."
National Association of Automobile Manufacturers of South Africa president Dr Johan van Zyl yesterday said unless a settlement was reached in the component industry in the next few days, "the damage to ... the automotive industry and on foreign investment sentiment would be immeasurable and would take years to re-address".
Van Zyl said the National Union of Metalworkers of South Africa (Numsa) would have to accept responsibility "for any lasting negative consequences" from the prolonged strike.
"[The] turbulent industrial relations environment is undermining the interests of the country. The vehicle and automotive component manufacturing sectors account for [nearly] 30% of South Africa's manufacturing output.
"The strike would inevitably result in lower economic growth, [among other factors]," he said.
Vehicle manufacturers are still reeling from a three-week strike in the sector. They face an additional loss of income because of short time being implemented at their factories.
The Numsa-led strike in the component sector, which began on Monday, will add to losses incurred by the automotive industry during the three-week strike. Manufacturers lost the production of 45000 vehicles, or R20-billion, for the entire value chain during the three-week strike.
Mercedes-Benz South Africa (MBSA) on Monday sent most its workforce home because of the component sector strike, but some production was still taking place at the company's plant in East London.
Volkswagen Group South Africa in Uitenhage and General Motors South Africa in Port Elizabeth yesterday confirmed that they only had enough components to continue production until tomorrow.
MBSA communications manager Lynette Skriker said: "The domino effect of back-to-back strikes is creating an untenable situation ..."
Numsa said its strike marches did not only signal "our firm stance in taking the fight to the greedy bosses' doorsteps, but formed part of our strategy to exert pressure [for] wage demands ..."
Numsa members, led by deputy general secretary Karl Cloete, will today march from New Brighton to Govan Mbeki Avenue from 9am.