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South Africa Carmakers Stick to Wage Offer Amid Walkout

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Aug. 30 (Bloomberg) -- South Africa’s carmakers, including Toyota Motor Corp. and Volkswagen AG, said their most recent wage offer that outpaces inflation should be attractive enough for workers to end a 10-day strike crippling the industry.

The employers’ pay-raise proposal is “reasonable and highly competitive” versus other sectors, National Association of Automobile Manufacturers of South Africa President Johan van Zyl said today in an e-mailed statement.

The carmakers’ plan “amounts to a total increase of more than 30 percent over the three-year period and is best ever offered in the history of collective bargaining in the industry,” Van Zyl said.

The manufacturers offered a 10 percent raise as part of a three-year deal, National Union of Metalworkers of South Africa Treasurer Mphumzi Maqungo said on Aug. 26. The carmakers association and Numsa called today for an end to the walkout, which started Aug. 19 with about 30,000 workers participating. The union has recommended the offer to members while asking the companies for improvements, Numsa Secretary General Irvin Jim said today.

The proposed wage increase compares with South African inflation of 6.3 percent in July, the highest rate in 15 months. Africa’s biggest economy is coping with slowing economic growth. Labor unrest has also halted work in the construction industry and is threatening gold mines and gasoline stations, contributing to the rand’s drop to its lowest level since March 2009.

Other carmakers affected by the work stoppages include Nissan Motor Co., Daimler AG’s Mercedes-Benz unit, Bayerische Motoren Werke AG, Ford Motor Co. and General Motors Co.

Weekend Talks

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

The deadlock is costing as much as 700 million rand ($68 million) a day, according to Nico Vermeulen, director of Naamsa. The industry, including car dealerships, servicing and repair, accounts for about 7.5 percent of gross domestic product, the carmakers group said today.

A separate work stoppage involving about 72,000 workers at service stations and dealerships scheduled for Sept. 2 has been postponed until Sept. 9, Jim said.

The planned walkout stemmed 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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