Johannesburg - The ownership component of the new broad based black economic empowerment (BBBEE) codes was a challenge and difficult for multinational companies, Ford Motor Company of Southern African (FMCSA) chief executive Jeff Nemeth said yesterday.
Multinationals did not like to dilute their brands and found the ownership component in the new codes “very onerous”, said Nemeth, who is also the president of Ford sub-Saharan Africa.
Nemeth was speaking at an Automotive Industry Development Centre (AIDC) inaugural graduation ceremony of the first incubatee from the AIDC incubation centre, which is located at FMCSA’s plant in Silverton in Pretoria.
He said it was onerous for multinationals to have a joint venture or a partnership from an administrative and consolidation standpoint because of the number of countries in which they operated.
“We never do it and most multinationals never do it,” he said. However, Nemeth stressed everybody in the Ford Motor Company supported four of the five BBBEE pillars and only had difficulty with the ownerships pillar.
“Moving forward we need to figure out how to break the code on that particular item, because with the new codes it’s particularly punitive.”
Nemeth said if Ford was unable to “break the code” on the ownership pillar, it might prevent Ford from being involved in initiatives like the AIDC incubation centre in the future. “We don’t want that to happen. We want to continue to contribute to the economic growth of entrepreneurs in South Africa and beyond,” he said.
The incubation programme was established by the Gauteng provincial government in conjunction with the AIDC, a subsidiary of the Gauteng Growth and Development Agency. Its aim is to provide manufacturing opportunities for small and medium enterprises to enter the automotive industry.
Nemeth said the incubation centre was the only one of its kind in the Ford Motor Company.
“This was a joint venture between the government, Ford and our tier one suppliers. Without all three of us working together very closely and taking really huge leaps of faith, this would never have happened,” he said.
Nemeth said the incubation centre made sense because the components built in the centre were large and bulky and some, like the front and rear bumpers, were painted and could not have any scratches when they were installed on a vehicle.
Ford was getting these components from Kempton Park and Rosslyn and shipping them to the plant, but it was expensive to protect them and putting the centre close to Ford’s production line meant it could eliminate transport and damage costs.
Nemeth said they were able to do that, establish the centre and pay for the incubatee businesses and still deliver a cost saving to their manufacturing plant, which made this initiative sustainable.
The first graduate from the centre was Caiphus Mokotedi, who heads up Zig Enterprises, which has been awarded a tender for Ford’s new vehicle personalisation centre located adjacent to the plant.
The facility will give customers of the South African built Ford Ranger the opportunity to equip their vehicles at factory level with a wide range of supplier branded accessories, including wheel nut locks, spare wheel locks, heavy duty seat covers and heavy duty bull bars.
Mokotedi said the project had been an extremely valuable stepping stone for him. “The training and support have given me a solid grounding to start my own new business, which will now be an integral part of Ford’s manufacturing operations,” he said.