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numsa angered by threatened relocation of export pogrammes to the East bloc

28 November 2005, Posted in Press Releases

Numsa angered by threatened relocation of export programmes to the East Bloc

South Africa’s top eight car manufacturers have reported the highest export growth, a new record vehicle sales and best production performance levels ever, but took the first steps in their restructuring plans to outsource and shed more jobs.

“For example, Daimler Chrysler in Germany, BMW and VW in Germany have successfully influenced auto labour unions in Germany to agree on reduction of certain workers’ rights in exchange for relocation of some production programmes, currently performed in South Africa back to Germany to save their jobs,” Numsa general secretary Silumko Nondwangu said.

The National Union of Metalworkers of South Africa (Numsa) is concerned that part of the car manufacturing multinationals’ plan include reduction of some assembly plant operations, closure and outsourcing of other unit operations in favour of relocating manufacturing contracts to East European bloc and Chinese plants. This is intended to cut labour costs.

The Motor Industry Development Programme (MIDP), which represented government support to the car manufacturing industry, has meanwhile, pumped more than R55 billion in subsidizing car plants assembly’s export costs, but jobs fell by 17% and later increased marginally in the past three years. This is despite the fact that the extremely beneficial MIDP incentives did not include the cost of the local produced and sold vehicles.

Nondwangu said car manufacturers went ahead with their plans to force employees to work short time because certain car models were being phased out and workers were consequently threatened with lay offs.

The National Association of Automobile Manufacturers of South Africa (Naamsa) executive director Nico Vermeulen has, in the third quarterly business review for the industry, painted a colourful picture on industry employment levels, saying the industry had achieved the highest aggregate levels in the past seven years.

“Over the past 21 months, 3 241new jobs have been created in the industry. Two major companies recruited the majority new personnel, and a combination of strong economic fundamentals should serve to support the positive momentum in the country’s economy and demand for new vehicles,” he said..Turning to exports of locally produced vehicles, Vermeulen reported that exports would continue to be boosted by the various new export programmes in addition to the established export projects.

Numsa’s dissatisfaction with auto industry’s restructuring plans was that it threatened not to comply with the South African legislative measures where labour, business and government were consulted, but followed international phenomenon which undermined the workers’ working conditions. “New conditions which applied in the countries of origin were exported into the South African situation,” Nondwangu said.The union is also miffed that the high increase in the turnover and profitability of the firms has not been translated into more benefits for the employees in terms of increased employment and wage benefits.

Mziwakhe Hlangani, Numsa information officerContact for further enquiries:- 011-6891700 or 0837293374