Union unrest has undone BMW South Africa’s hopes of winning the assembly contract for a new model.
The loss of almost 16% of its annual vehicle production at BMW’s plant in Pretoria this year following almost eight week of strikes has killed off any chances for a new model, the company has told trade and industry minister Rob Davies.
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Strikes by the National Union of Metalworkers of SA (Numsa) in the manufacturing and components sector has seen BMW report an “irrecoverable” loss of production of 13,000 3-series cars at its plant in Rosslyn.
BMW SA warned that a continued commitment to existing investment would require that manufacturers, the state and organised labour tackle fundamental issues facing the motor sector. South Africa’s current labour relations environment is costing the country jobs and has sparked fears of reputational damage in the automotive sector that accounts for 30% of manufacturing output.
Similar fears on competitiveness have been raised following Nissan’s announcement that it will produce vehicles in Nigeria following a vigorous drive by that country to attract manufacturing investment.
A crisis meeting between the Department of Trade and Industry and the CEOs of major car manufacturers is expected to take place on the sidelines of the Johannesburg International Motor Show.
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By GlobalDataBMW emphasised that it was “in no way, shape or form” planning to disinvest in South Africa, but a statement said that lengthy strike action “had cost BMW SA an opportunity to compete for a potential second model”. The Rosslyn factory assembles 3-series cars.
Numsa dismissed BMW’s decision as “blackmail”, accusing the car manufacturers of going into this year’s wage negotiations in bad faith. In an open letter to the carmaker, deputy general secretary Karl Cloete said: “We must from the outset reaffirm our statement that BMW’s public posture with respect to no further investments in South Africa amounts to political and economic blackmail.”
Cloete said the union took decisions in the interests of jobs and sustainability, and dealt with “facts, not emotions”.
He added: “South African citizens have handsomely contributed to the profits that these multinational corporations have raked in through our taxes that have gone into the Motor Industry Development Programme (MIDP) and the introduction of the Automotive Production Development Programme (APDP), along with the introduction of the highly lucrative Automotive Incentive Scheme (AIS).”
