South Africa Car Strike Would End With Sweeter Deal, Union Says

South Africa’s automotive industry strike could end next week if manufacturers including Toyota Motor Corp. (7203) and Volkswagen AG (VOW) sweeten their wage offer, the National Union of Metalworkers of South Africa said.

“We hope that before this weekend ends, employers will tell us they are willing to agree to those improvements,” General Secretary Irvin Jim told reporters in Johannesburg today. “We believe we’re on the brink of coming to an agreement.”

The strike, which started on Aug. 19, will continue until improvements are agreed on, Jim said. Manufacturers made an offer of 10 percent as part of a three-year deal, Numsa’s Treasurer Mphumzi Maqungo said on Aug. 26. The union’s leaders had recommended the deal, while members want an increase to the proposal, Jim said.

The deadlock is costing as much as 700 million rand ($68 million) a day, according to Nico Vermeulen, director of the National Association of Automobile Manufacturers of South Africa. The industry accounts for about 7 percent of gross domestic product, the Department of Trade and Industry has said. Africa’s biggest economy has been plagued by labor strikes that have spread from the mining industry to other parts of the economy.

Talks Continue

Talks will continue with the aim of trying to resolve the impasse, Vermeulen said by phone today.

Inflation in South Africa accelerated to 6.3 percent in July, breaching the central bank’s 6 percent upper limit for the first time in 15 months.

A separate work stoppage involving about 72,000 workers at gas stations and dealerships scheduled for Sept. 2 has been postponed until Sept. 9, Jim said. The planned walkout resulted from a stalemate on wage negotiations between Numsa, the Fuel Retailers Association and the Retail Motor Industry Organization. Employers are offering 6.5 percent while the union is asking for “double-digit” increases, according to Jim.

To contact the reporters on this story: Kamlesh Bhuckory in Johannesburg at kbhuckory@bloomberg.net; Amogelang Mbatha in Johannesburg at ambatha@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net

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