Johannesburg - As the strike by 220 000 workers in the steel and engineering sectors enters its fourth week, a prominent economist has warned that South Africa might be witnessing the start of a worker revolt against the capitalist structure of the economy.
Azar Jammine, a director and chief economist of Econometrix, said on Friday the duration of the strikes in the platinum sector and now by the National Union of Metalworkers of SA (Numsa) in the steel and engineering industry was a litmus test and provided a clue that these strikes were ideological battles first and foremost and only secondly economic battles.
“I’ve been scared of this over a number of years and am wondering if it is now happening before our own eyes,” Jammine said.
He added that the frequency of work stoppages because of strikes was far worse in South Africa than any other country. “The ramifications of the Numsa strike for the economy are severe and will almost certainly plunge the economy into recession for several months.
“I have never been as concerned about the South African economy and its outlook as I am now.”
He said it appeared the union movement virtually wanted to bring down the existing capitalist order and the white imperialist and colonial economic structure to its knees and replace it with a new structure where labour would be able to dictate the terms in the future.
The strike has disrupted or halted production at five of the seven motor manufacturing plants because of a shortage of components and is also disrupting supplies of construction materials to the building industry, which is threatening to delay the completion of major projects.
Only Mercedes-Benz South Africa (MBSA) and Volkswagen South Africa (VWSA) were able to produce vehicles normally at their plants last week.
Jeanette Clarke, an MBSA spokeswoman, said that the vehicle manufacturers’s plant was still producing normally but supply levels of some components were critical.
Matt Gennrich, a VWSA spokesman, said that the company’s plant produced normally last week and normal production was scheduled for today.
Jammine said that the ability of South African motor companies to take advantage of opportunities that might arise because of the focus of their parent companies on Africa was definitely threatened by South Africa’s labour environment.
Ford unveiled aggressive plans last week to expand its business in Africa and announced it would be launching 25 new vehicles into the Middle East and Africa region by 2016, with 17 of these models launched into sub-Saharan Africa.
Jim Benintende, the president of Ford Middle East and Africa, a fifth business unit established within Ford earlier this year, said the new region comprised 67 markets and represented “the final frontier for growth within the global automotive industry” with sales expected to grow by 40 percent to 5.5 million units by 2020.
However, Benintende admitted there was a possibility the Ford Motor Company could place a moratorium on further investment in its manufacturing capacity in South Africa because of the labour instability.
Benintende also confirmed his team was in “exploratory mode” for opportunities in other African countries, including manufacturing opportunities, and stressed. He stressed that labour and labour peace was an important factor in any decision about expansion and new investment.
The Renault-Nissan alliance and west African conglomerate Stallion Group announced their intention last year to jointly launch vehicle assembly in Nigeria and indicated there was potential to develop the plant into a major manufacturing hub for Nissan in Africa.
However, Nissan South Africa managing director Mike Whitfield, who is responsible for sub-Saharan Africa, including South Africa and Nigeria, stressed at the time this did not pose any threat to the local motor industry, was an opportunity for co-operation and complementation and was seen as being very beneficial to Nissan’s local operations.
Trade and Industry Minister Rob Davies echoed this view and indicated the launch of vehicle assembly in Nigeria was not something the South African government feared but welcomed.
Jammine does not believe the labour environment has deteriorated to such an extent that vehicle manufacturers would consider divesting from the country.
But Jammine also does not believe the parent companies of domestic vehicle manufacturers have fully comprehended the gravity of the situation in South Africa.
“That is why the Numsa strike is a litmus test. If it continues for much longer you will get a fundamental sea change to investment in South Africa,” he warned.
Jammine admitted South Africa’s superior infrastructure to other African countries and its more established and extensive automotive component supplier base might buy the country some time from any possible disinvestment decisions.