adminJohannesburg – Nissan Motor joined carmakers including Toyota Motor Corp and Ford Motor in halting production in South Africa as a strike by metalworkers cut auto-component supplies.
Nissan has temporarily closed its production plant in Rosslyn, near the capital Pretoria, from July 14 to July 21, the company’s South African unit said in an e-mailed response to questions today. If the strike that began on July 1 continues “into the following week, Nissan South Africa may have to reconsider its production schedule,” it said.
The stoppage by more than 220 000 members of the National Union of Metalworkers of South Africa, the nation’s largest labour union, has disrupted manufacturing output, threatening an economy still reeling from a five-month strike by platinum mineworkers that ended in June.
“On top of our normal challenges with labour, there are some industries which are affected by strikes every single year, whether directly or indirectly,” Christie Viljoen, an economist at NKC Independent Economists in Paarl, outside Cape Town, said by phone today. The production stoppage sends a very negative message to investors, he said.
The rand strengthened 0,1 percent to 10,6976 per dollar by 11:39 am in Johannesburg.
“We are hoping for a speedy resolution to the strike as a prolonged strike affects our reputation as a supplier as well as our competitiveness,” Nissan said. The carmaker produces about 225 vehicles a day at its Rosslyn plant.
Eskom Holdings SOC Ltd’s Medupi and Kusile construction sites have been attended by about 70 percent of contract workers since the start of the strike, Andrew Etzinger, a spokesman for the utility, said by e-mail.
The state-owned company, which supplies 95 percent of power in the country, is building the facilities to relieve power shortages that have constricted the economy. Each will have the capacity to generate about 4 800 megawatts of electricity.
The Steel and Engineering Industries Federation of Southern Africa yesterday withdrew its offer to raise pay by 10 percent in the first year, 9,5 percent in the second and 9 percent in the third. Numsa rejected the offer on July 13.
The union plans to intensify its strike by calling on 140 000 members in other industries to also down tools, Stephen Nhlapo, head of bargaining at Numsa, said by phone today.
The strike is costing the metals and engineering industry about R300 million ($28 million) a day, according to Kaizer Nyatsumba, chief executive officer of Seifsa, as the employers’ lobby is known.
As the strike enters it’s third week, Seifsa is reverting back to collective bargaining after talks with Numsa failed.
The federation is relying on discussions with all stakeholders within the Metal and Engineering Industries Bargaining Council, according to an e-mailed statement today.
“Regrettably, our genuine efforts to bring the strike to an end as soon as possible were not successful,” Seifsa’s Nyatsumba said.
“We welcome the fact that the MEIBC has scheduled a facilitated plenary session to take place this week.”
South Africa’s second-biggest labour group, the National Union of Mineworkers, is meeting with Eskom at the Commission of Conciliation, Mediation and Arbitration today following a deadlock in wage talks. The union is asking for a 12 percent increase while the power utility is offering 5,6 percent. Inflation accelerated to 6,6 percent in May.
“We are warning them that our members are angry and depressed,” Livhuwani Mammburu, spokesman for NUM, said by phone. “We feel Eskom rushed to CCMA; as the NUM we feel that Eskom should have given negotiations a chance.” NUM said it has more than 16 000 members at the utility, about a third of Eskom’s workforce.
South Africa’s gross domestic product declined 0,6 percent in the first quarter, compared with an expansion of 3,8 percent in the final three months of last year. The contraction, partly caused by the mining strike, was the first since a 2009 recession.
“If you want to make an investment in these industries you have to include in your planning the fact that there will be a number of weeks every year during which you can’t produce,” NKC’s Viljoen said. “There really is nothing good in this for investors.” – Bloomberg.
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