CAPE TOWN – The National Union of Metalworkers of South Africa (Numsa) has reached a new three-year inflation-beating wage deal with the vehicle manufacturing sector body, the Automotive Manufacturers Employers’ Association (Ameo), setting the tone for further talks in the industry.

Ameo represents the automobile manufacturers based in South Africa: including BMW, Mercedes-Benz, Ford, Isuzu, Nissan, Toyota and VW.

The last three-year agreement had run out by the end of June 2019, and formal negotiations had started in July.

Numsa has some 300 000 members in the automotive industries,

In the final agreement, workers will get a 9 percent increase in year one, and then 7 percent in years two and 3 percent, or increases equal to inflation, whichever is greater. Inflation in July was at 4 percent.

National Association of Automobile Manufacturers of South Africa's Mike Mabasa said they were “very pleased” the talks were resolved and a strike had been averted, because the industry now stood a good chance of meeting its production targets for the year.

“Remember that we are 40 000 units ahead of where were were last year,” due to stronger export vehicle sales offsetting the lower sales in South Africa due to the weak economy, he said,

National Association of Automotive Component & Allied Manufacturers (Naacam) executive director Rene Moothilal said the conclusion of the talks was important for the continued stability of the vehicle manufacturing industry, because the sector was the biggest customer of Naacam members,

In addition, the talks would serve as a benchmark and set the tone for vehicle component manufacturing sector wage negotiations, which were just starting, he said.

Numsa started the talks initially demanding a 20 percent wage increase for one year; with other demands including morning, afternoon and night allowances of 10 percent, 20 percent and 30 percent respectively, six months maternity leave and transport allowances of R5 000 per month.

Bosses started negotiations with a 4.5 percent wage increase offer.

In the final agreement the transport allowance has been increased from R1 540 to R2 500 and by 7 percent in years two and three, or in line with inflation, whichever is greater.

An increase in the amount to be paid to workers during times of temporary lay-off was also agreed.

The parties also agreed to establish two focus groups to develop an industry medical aid, and a skills-ased grading framework.

BUSINESS REPORT