Toyota halts popular car production

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ToyotaDurban Reuters People walk near Toyota Motor Corp's Durban car factory.

Durban - The strike by 220 000 National Union of Metalworkers of SA (Numsa) members has forced Toyota to halt three of its popular vehicle lines at the Durban assembly plant from today.

And even as Toyota joined four of seven local vehicle plants to be seriously affected, the statistician-general warned that strikes had already cost South Africa 188 000 manufacturing sector jobs in the first quarter of this year alone.

The wave of strikes in the mining and manufacturing sectors had led to the steepest economic decline since 1967, said Statistician-General Pali Lehohla.

Toyota spokeswoman, Mary Willemse, said the production of Corollas, Hilux bakkies and Fortuners would stop from today at the automotive giant’s Prospecton plant because companies supplying car components were on strike.

“Toyota will close two production lines from today at our Durban plant,” Willemse said.

Numsa members in the automotive components manufacturing industry, which produce parts for vehicle manufacturers, downed tools two weeks ago.

Willemse said the production of Quantum minibuses and trucks lines would continue and due to availability of stock, vehicles would still be available for sale.

She would not be drawn on the financial impact of the partial shutdown, nor whether this jeopardised the Japanese investment in South Africa.

Last year, Toyota incurred losses caused by a three-week strike by component manufacturers. This was preceded by a four-week strike by Toyota employees themselves.

Durban Chamber of Commerce chief executive, Andrew Layman, said companies like Toyota, might end up reconsidering their investments in the country.

He said the crippling of Toyota’s ability to deliver, could have a devastating effect on the economy.

Ford had also temporarily suspended production at its Silverton, Pretoria, plant.

Ford spokeswoman, Alicia Chetty, said that only Ford’s Pretoria plant was affected and its other plant in Port Elizabeth was operating normally.

General Motors halted production at its assembly plant in Port Elizabeth more than a week ago because of supply chain problems.

Last week BMW SA cut output by a third from three to two shifts. Production at VW, Mercedes-Benz and Nissan was normal, although company officials said they were monitoring the situation closely.

Other companies affected are construction companies Murray & Roberts and Aveng Ltd, which are working on the construction of two major power plants for Eskom.

Numsa rejected the latest pay offer from employers in the steel and engineering sector on Sunday and called on its striking members to intensify industrial action.

Employers have offered pay rises of 10 percent in the first year, 9.5 percent in the second year and 9 percent in the third year.

But unions also have grievances about the role of labour brokers in the industry and do not want to be bound to a multi-year agreement, preferring a one-year deal instead.

The union’s national strike committee was due to meet today to plot out a detailed programme of action to intensify the strike as it entered its third week.

Numsa general secretary, Irvin Jim, said they had no option but to intensify their activities.

Deputy general secretary, Karl Cloete, said upping the ante could include a re-run of the regional marches that took place at the beginning of this month in KwaZulu-Natal and the Eastern Cape.

Reduced

A second option, however, would be to extend the strike to “key and strategic companies” which were not in the engineering bargaining council but that do work with engineering companies, Cloete said.

These would include targeting auto-manufacturing companies, some of which have already reduced their hours of production because of parts shortages.

While Numsa awaits feedback from Steel and Engineering Industries Federation of South Africa (Seifsa), Numsa spokesman, Castro Ngobese, said the strike in the engineering industry would “continue indefinitely”.

 

Lehohla suggested that the government, through the National Economic Development and Labour Council (Nedlac), use the data when discussing labour matters.

At one stage in about 2006, South Africa’s economic growth peaked at 7.5 percent, which Lehohla described as the “good times”, before it saw a major decline caused by the recession in 2009.

“That recession was followed by the first contraction in the first quarter of this year,” he said.

“The main drivers of this contraction are manufacturing – coming in at -4.4 percent – and mining at -24.7 percent. This has been the steepest decline since 1967,” said Lehohla. During the first quarter the “main drag” was manufacturing and mining.

Lehohla said the strike of 2012 – the Marikana strike – and the latest Association of Mineworkers and Construction Union strike, which lasted from January until last month, played a major role in the decline.

“Strikes had a negative impact on the manufacturing sector, notably in terms of motor vehicle production in September last year,” said Lehohla.

Regarding what the government should do with the data, he said the “purpose in life is to enlighten and respond using evidence of matters of public concerns. It (data) should feed into the discussions going on currently in society”.

Discussion

“So, releasing these numbers in the context of a restive industrial environment helps to energise the discussion that society needs to have.

“The question is what must the government do? The government must engage these numbers and look at them, analyse them and feed them into Nedlac so that there are more peaceful industrial relations,” said Lehohla.

DA spokesman for trade and industry, Geordin Hill-Lewis, said the government’s “muddling” and “contradictory approach” to the National Development Plan contributed to the decline.

“South Africa has the potential to do much better. With decisive leadership, the right policy mix and a government committed to job-creating inclusive economic growth, we can grow manufacturing employment and turn the economy around,” said Hill-Lewis. - Daily News



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