South African carmakers and a union representing thousands of their workers have reached a deal on wages, ending a costly eight-day strike, employers’ body AMEO said.
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The Automobile Manufacturers Employers Organisation (AMEO) said it and union Numsa signed a wage agreement on Friday, Reuters reported. The three-year deal will see workers receive a 10% increase this year, and 9% a year in the next two years.
Numsa was seeking 15% wage hikes, more than triple the country’s inflation rate. Car component workers’ unions were also threatening to join the action.
The strike led to lost production of about 17,000 vehicles, the group said. South Africa’s auto industry, which the industry said accounts for about 6% to 7% of the country’s gross domestic product (GDP), produces about 420,000 vehicles a year.
About half of South Africa’s auto production is exported to other African states, Europe and North America.
Strike-hit automakers include Toyota, Ford, Volkswagen, General Motors, Nissan, BMW and Daimler.
“The strike and resultant loss of volume has caused significant reputational damage to the automobile manufacturing industry in South Africa as a stable production location,” the auto group said in a statement.
But the South African action did not stand out in the global context because workers in major markets sought wage hikes, feeling they had leverage after carmakers slashed personnel during the global financial crisis and then scrambled to man assembly floors as demand picked up, analysts told Reuters.
A prolonged action could have hurt car exports out of South African with global carmakers filling the void of lost production from the country with vehicles from low-cost production centres, they added.
