NUMSA commemorates the 100 year anniversary of the Russian Revolution

Last chance for car employers after a shameful 5,5% wage offer.

3 June 2004, Posted in Press Releases

DATE: 03 June 2004

Johannesburg Press release – for immediate release


The National Union of Metalworkers of South Africa (NUMSA) and the Automobile Manufacturers Employers Organisation (AMEO) will meet tomorrow 04/06/2004 in the last round of wage talks. The negotiations are to determine the wage increases of 21 000 workers in the car manufacturing industry. Last week, the employer organisation offered a shameful CPIX 5,5 percent wage increase to all workers and rejected all the other union demands. The union has revised its demands in the following manner:

Numsa”˜s Demands.

-A guaranteed wage increase of 10 percent across the board;

– 3-year wage agreement;

-Training should take place during working hours;

-100% payment of maternity leave;

-For every artisan there must be four apprentices;

-Workers working under the labour brokers should be employed permanently after 3 months;

-Any bonus should be calculated at 11%;

-Provide anti-retroviral drugs to HIVAIDS sufferers and must be given 30 days sick leave circle;

-Negotiate additional categories of workers for level 5;

-5 days per occurrence for family responsibility leave.

We are giving the employers a last chance to respond favourably and any failure to do so will result into the union declaring a dispute and mobilize workers for a huge battle. The current wage increase of 5,5% is unrealistic. This is like throwing darts at a board with a blindfold on. The economic impact of low wage increases is brutal to the workers who are looking after the unemployed poor. AMEO failed to give a decent wage offer in the previous wage talks and ultimately broke away from their promises to negotiate in good faith this year. The current 5,5% wage offer has made many workers in the industry to be angry and the union to doubt the honesty of employers to negotiate in responsible manner.

The employer organization is advancing pathetic reasons that the current wage offer is above the current inflation rate. The fact of the matter is that employers want to force workers towards impossible outcomes.

The reality is that the petrol price has risen by 26% so far this year which has contributed to costs on commuting and increase in food prices. The price of petrol has increased by another 30c a litre this month. The increases in fuel prices and food prices will have a severe effect on the workers living standards. Consumer goods will be expensive for ordinary workers. Inflation eats on the pockets of workers and it always reveals uncertainties. Workers have expectations. Inanimate objects do not have expectations. Workers behaviour depends entirely on what they expect to happen tomorrow not on what is happening today. Therefore our well intentioned demands address the future and the employers responses turned out to be incompatible with the reality of the future situation.

The inflation targeting policy may work for some, it is unlikely that it will work for poor paid workers. Workers cannot be victims of inflation targeting because it does not provide anything tangible for the working people. Workers worry about broad-based increase in prices of locally manufactured goods. Our members will and are already paying dearly for inflation targeting. The obvious experience is that things are not always equal. Therefore workers deserve a high increase to cushion the effects of inflation. So far, the employer organisation has not acted brilliantly with great appreciation of economic realities. Avoiding conflict should be at the heart of this year’s negotiations.

We are not encouraged by lack of coherent thinking on the part of the employer organisation. AMEO has been obsessed with wage cuts and moderation of salaries. There has been a disturbing decline in wages coupled with lack of savings because of overburden of workers resulting in lack of social spending. The employer body should know by now that inflation is unpredictable and unstable. Inflation has significantly contributed to lack of growth and gradual erosion of their purchasing power.

The wages of car workers in the past two years have fallen below zero whiles profits rose substantially. That is the reason, we argue strongly for a high wage increase that will cushion the effects of inflation, high interest rate, unemployment and poverty. What has been disappointing is the fact that the profit performance of the eight car manufacturers has increased considerable far above the wage increases. Information provided by TISA a DTI department, showed that their combined profits improved to R4, 1billion – 10, 4% in 2002 following the significant profit increase of 189, 3% in 2001. New vehicle revenues in the SA market increased 18, 9% from R38,7 billion in 2001 to R46 billion in 2002. Further more vehicle sales last month soared by almost 27%. Productivity gains have not been transformed, compensated and shared even amongst workers.

The 5,5% wage offer runs in the face of upward labour productivity and downward trend in the remuneration of workers in the industry. Under such circumstances there are no significant improvements in real terms on the wages of the workers. The style and attitude of employer federation will undermine the sustained commitment of workers to an improved labour productivity. The industry is vulnerable to serious risk of job losses, outsourcing and workplace restructuring of which some of these factors result into serious wage constraints for workers. Therefore by giving 5,5% wage increase is to further undermine and limit the growth prospects of the industry.

The wages of workers over the past years were affected by large increases in prices of water, medical, transport and education services. The purchasing power of workers has diminished to unacceptable levels as a result of increases in commodity prices. There are a lot of inflationary pressures on workers wages. The employer body has not considered real wage increases in the context of economic growth prospects in the industry. There are serious wage constraints caused by job losses, outsourcing and workplace restructuring. Employment has declined considerably in the industry despite all the car companies having exports contracts. The situation in the industry is not rosy.

For more information contact Dumisa Ntuli @ (011) 689 1700 or cell 0829737282