Johannesburg - South Africa’s vehicle manufacturing industry is hopeful of concluding a new three-year wage agreement with the National Union of Metalworkers of SA (Numsa) within the next 10 days.
Mike Whitfield, the president of the National Association of Automobile Manufacturers of SA (Naamsa) and managing director of Nissan Africa, yesterday commended Numsa for the role it had played up to now in ensuring that the current round of wage negotiations had been amicable.
“The important thing is that we are still in discussion. We believe that there is an opportunity to conclude an agreement. However, we still need a bit more time and it is critical we look forward as an industry to the next three years of stability and productivity that we both need,” he said at the CAR Conference at the Festival of Motoring at Kyalami.
“We hope to be in a position in the next 10 days that we will have reached a conclusion in the negotiations and obviously from a Naamsa perspective we (hope) that the conclusion is a positive outcome,” he said.
Demands agreed earlier this year at Numsa’s national bargaining conference to be put forward in different sectors included a 20 percent wage increase, a one-year agreement, a R5 000-a-month housing allowance and medical benefits to be paid on the basis of 80 percent by employers and 20 percent by employees.
Wage agreements
In 2013, the production of 58 000 vehicles worth a total of about R11.6 billion was lost by the motor industry.
The vehicle manufacturing industry was brought to a virtual standstill by almost eight weeks of back-to-back strikes linked to negotiations of new wage agreements for the vehicle manufacturing and retail motor industries, including the automotive component manufacturers and the new tyre manufacturing sector.
Whitfield said yesterday that this round of negotiations found the industry in a very different position compared with three years ago.
He said the industry faced far greater competition from its global counterparts.
The previous and current industrial development programmes of the Department of Trade and Industry had transformed the industry into what was essentially an export-dependent industry, with much higher production volumes than would be possible if the industry only focused on the domestic market, he said.
But Whitfield stressed that being a major vehicle exporter meant the local industry had very demanding global customers, not only in terms of quality but also reliability.
He said the local industry was also competing against production facilities abroad that were also constantly trying to increase their production, with many of these production facilities much closer to the end customer than South Africa.
“With this in mind, it has become truly critical for the future of the South African automotive manufacturing industry that we offer stable and high quality production, with the least possible disruption through industrial action.”
Whitfield added that the industry was of paramount importance to the economy.
He said the industry’s output of 616 000 vehicles last year contributed 7.5 percent to gross domestic product and output this year was expected to rise to 630 000 units.
Whitfield stressed that exports remained a key manufacturing driver for the industry and the automotive industry accounted for more than 12 percent of South Africa’s total exports.
“Long term we will see production levels rising as we aim to grow South Africa’s vehicle production, mainly through exports, to at least 1 percent of global production by 2020,” Whitfield said.
BUSINESS REPORT