South Africa Car Strike Ends After Workers Accept Revised Offer

South African carworkers will end a three-week strike and return to work tomorrow after accepting a revised wage offer from employers including Volkswagen AG (VOW), Ford Motor Co. (F) and Toyota Motor Corp. (7203)

“We are officially announcing the end of the nationwide strike and hope our members will go back to work tomorrow,” National Union of Metalworkers of South Africa, or Numsa, Secretary General Irvin Jim told reporters in Johannesburg today. “At Toyota in Durban and BMW in Pretoria there are some specific issues, which make our membership unhappy to accept the offer. We are working to resolve these issues.”

A wage increase of 11.5 percent for this year, 10 percent next year and 10 percent in 2015 was agreed upon. Night shift and transport allowance was also part of the settlement. Numsa and the Automobile Manufacturers Employers Association, or AMEO, agreed to study an industry medical aid and housing program.

The strike is costing the industry as much as 700 million rand ($68.66 million) each day, Thapelo Molapo, chairman of AMEO, said Sept. 4. The carmakers won’t be able to recover the losses, according to AMEO. Automotive accounts for about 7 percent of South Africa’s gross domestic product, the Department of Trade and Industry said.

South Africa has been plagued by strikes as unions representing workers from construction to gold mining have asked for wage increases. More than 60,000 of the country’s gold miners began returning to work Sept. 6 following a 48-hour walkout after they accepted an 8 percent pay increase.

The motor industry will now face strikes by gas station attendants, panelbeaters, car and spare parts dealers and fitment workshops starting tomorrow, Jim said. The union is demanding “double digit” wage increases for these workers, while employers are offering 5.6%, Numsa Deputy Secretary General Karl Cloete told reporters today.

Consumer prices rose 6.3 percent in July, exceeding the central bank’s 3 percent to 6 percent target for the first time in 15 months. Africa’s biggest economy is forecast to expand by 2 percent this year, its slowest pace since 2009.

To contact the reporter on this story: Janice Kew in Johannesburg at jkew4@bloomberg.net

To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net

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