General Motors South Africa (GMSA), with local component manufacturer Tenneco South Africa, has been awarded a ZAR6bn (US$598m) contract to export catalytic converters to North America.
The catalytic converters, which will be manufactured at Tenneco’s Clean Air Plant in Port Elizabeth, will be supplied for GM’s new V6 engines which will be used for vehicles built and sold in North America from 2015 through 2022.
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“The decision to award this contract to South Africa is a great show of support by our parent company, as it comes ahead of a clear legislative framework by the South African government to support the strategic growth of exports,” said Mario Spangenberg, president and managing director, GM Africa.
GM said the this programme is a major boost to the Eastern Cape economy and will create and retain employment through manufacturing, supply and support services. In addition, the mining sector will benefit from a projected requirement of 10 tons of platinum group metals during the programme.
GMSA and Tenneco South Africa have worked together for over 12 years to produce catalytic converters and related components for North America. GMSA’s current exports total 2.6m cats a year for use on 17% of vehicles produced by GM globally.
GM’s global purchasing and supply chain chief Johnny Saldanha said: “Supplier operations in South Africa are competing with other operations around the globe. In order to attract business, suppliers need to be globally competitive in the critical areas of both cost and productivity. In parallel to this, business needs to operate in an enabling economic environment supported by a stable labour force.”
He added, “A key characteristic of vehicle manufacturing is that we often have to plan as far as five years in advance for the next vehicle programmes. We need to have a predictable and clearly defined legislative framework in order to accurately predict future trends and make realistic business plans.”
