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South Africa Auto Production Hit As Strike Curbs Parts Supply
A worker inspects cars at BMW's manufacturing plant in Rosslyn, outside Pretoria, September 13, 2010. PHOTO BY REUTERS/Siphiwe Sibeko.
By Wendell Roelf
18/09/2013
CAPE TOWN (Reuters) - South Africa's auto makers are struggling to build cars because a strike in components manufacturing has choked off the supply of parts, industry officials said on Wednesday, adding to the woes of a sector badly hit by earlier labour unrest.
More than 30,000 workers at major auto makers including Ford, Nissan and General Motors returned to work this month after a strike for higher wages that cost the industry $2 billion in lost output revenue over four weeks.
But workers in the automotive parts and retail industry represented by the main manufacturing union, NUMSA, are on strike, shutting down the supply of key parts and components used to assemble autos. The industry accounts for 6 percent of GDP in Africa's largest economy and 12 percent of its exports.
"The impact has been huge, massive. We are only producing 85 cars instead of the normal 345 cars a day," said Guy Kilfoil, a spokesman for German automaker BMW.
The BMW plant would not be able to make up the lost prodution, he said. It lost 7,900 vehicles from the autoworkers' strike and expects to lose another 2,300 by the end of this week because of the shortage of parts.
NUMSA has been pushing for double-digit wage hikes and better shift allowances, demands the Retail Motor Industry Organisation has said it would struggle to meet.
The situation was similar at a plant producing Daimler AG's Mercedes-Benz line.
"We haven't been producing our passenger vehicle line since last week. Our commercial line for trucks and buses has been going, but could stop producing next week if the strike continues," spokeswoman Lynette Skriker said.
She said most of the plant's 2,500 workers have been at home on short time due to the parts shortage.
Nevertheless, apart from the auto sector, strikes in South Africa this year have been relatively short-lived and less violent than some analysts had feared. South Africa's economy is recovering from a wave of violent mines strikes last year.
Workers in the gold industry went back to work this month after a three-day stoppage, although wage settlements are likely to cost bullion producers an extra $150 million over the next 12 months.
It is unclear whether the hardline AMCU mining union, which is still pressing for wage hikes, intends to strike.
Last year, AMCU helped organise a wave of wildcat strikes that brought the mining industry to a standstill and dented investor confidence. More than 50 people were killed during the mines unrest, including 34 strikers shot by police.
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