Johannesburg - Metair, the listed automotive components manufacturer, prevented its export contracts being affected by the strike in the sector by pre-building and pre-shipping components to its global vehicle manufacturing customers.
Theo Loock, Metair’s managing director, said on Friday that this meant that none of its export contracts were in jeopardy because of the industrial action.
Loock added that the company knew the three-year motor industry wage agreements were coming to an end and made provision to build up the necessary stocks and sustain its export levels.
“We were fortunate in that with our direct export contracts we were able to steer through the labour unrest,” he said.
Loock said the local market was different because nobody was delivering to the vehicle manufacturers when a strike in the sector stopped them producing.
Metair, a first tier supplier to all seven local vehicle manufacturers, had experienced a revenue delay and loss because it lost three weeks of production because of the strike in the motor manufacturing industry and the strike in the automotive component sector, he said.
Loock said Metair knew on a daily basis the exact impact on its revenue of the strike but was unable at this stage to comment or predict the final impact of the industrial action.
He stressed this was dependent on how much of the lost production vehicle manufacturers tried to make up once the strike ended and how they ran their output levels once production resumed.
Loock said Metair had 5 500 employees in South Africa but the strike had not affected its battery or brake pad businesses.
He said attendance by about 1 800 workers employed by these businesses was normal throughout the strike and the company had continued to operate.
Loock did not believe the strike would have a longer-term negative impact on Metair’s ability to secure export contracts because its ability to sustain and support its existing export contracts showed strength and was positive for the company.
He said there had been a lot of focus on the negative aspects of the strike but there was also a positive aspect, which was that once the industry had reached an agreement and the strike had ended, it introduced some certainty and stability in the labour environment for the next three years. “The big focus is the outcome, which secures labour stability for at least the next three years. That is more important than the crisis we are in now.”
Loock added that there was a structural misalignment in the motor industry because the expiry of the agreements in the motor manufacturing and automotive component manufacturing sectors were not aligned.
He said the alignment of the wage agreement cycles of two sectors was desirable because it would minimise the negative disruptive impact of back-to-back strikes.
Loock said the alignment of these wage agreement cycles should be a focal point in the next negotiations, adding that this had not been a major focus of the current negotiations because there were bigger and many other issues to sort out.
Metair’s shares lost 0.18 percent to R32.79 on Friday. - Business Report