Is SA set to lose a car manufacturer?

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Johannesburg - One of the two US-based vehicle manufacturers with production facilities in South Africa is under pressure from its head office to close its local operations because of the labour environment, claims the Steel and Engineering Industries Federation of SA (Seifsa).

Ford and General Motors are the only two vehicle manufacturers in South Africa whose parent companies are based in the US.

However, both Ford and GM denied their chief executives had made such a statement to Seifsa.

Denise van Huyssteen, the communications manager for GM sub-Saharan Africa, said yesterday that she had spoken to Mario Spangenberg, the president of GM Africa, who confirmed that he did not make these comments to Seifsa and that GM remained committed to growing its business in South Africa.

Rella Bernardes, the communications general manager for the Ford SA, said its president and chief executive, Jeff Nemeth, denied making any such statement to Seifsa.

In a press statement issued on Tuesday by Seifsa, the federation’s chief executive, Kaizer Nyatsumba, said he had received a call from an unnamed chief executive of a major car manufacturing company based in South Africa, who expressed concern about the impact of the strike on his company.

He said that the CEO had informed him that he was under “considerable pressure” from his head office in the US to close operations in South Africa and to move them to a country with a more stable labour dispensation.

On Tuesday more than 220 000 engineering and metal workers launched a wage strike. The boycott by NUMSA union, hot on the heels of a crippling five-month platinum stoppage, will cost the economy more than R300 million a day, SEIFSA said

STRIKE TO HIT CAR PRODUCTION

Vehicle parts makers such as Dorbyl are directly in the firing line, raising fears that a prolonged stoppage could affect production in the car manufacturing sector.

As many as 20 companies supplying Toyota, Ford and General Motors are affected, said NAACAM vice president Ken Manners.

“We have taken contingency plans, looking at stocking up on parts and there has been greater inter-company cooperation to try and create a buffer from the strike. The impact will really be felt if the strike is prolonged,” he told Reuters.

Business Report, Reuters & IOL


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