A strike in South Africa that started on Wednesday will lead to the production loss of over 2,100 vehicles a day, according to a statement from the Automobile Manufacturers Employers Organization. The affected automakers include BMW AG, General Motors Co., Toyota Motor Corp., among others.
It's estimated that about half of this output is intended for export markets. Toyota and BMW shut down their plants in South Africa after workers, who demand a 15% pay increase, went on strike. In an e-mailed statement, GM said that it had halted its main assembly lines at the Port Elizabeth plant and that it has limited operations on Thursday.
The employers organization described the union demands to be unrealistic and fails to consider the highly competitive nature of the global auto industry, as well as its relative lack of competitiveness when costs are compare to carmakers in other countries.
South Africa's car and car-parts industry is the country's biggest manufacturing exporter and stands for about for about 6% of gross domestic product. Carmakers have made an offer to increase pay by 7% in a three-year wage agreement.
On the other hand, the National Union of Metalworkers of South Africa is demanding a one-year agreement and increases in bonuses and sick-leave pay. Employers said that the NUMSA demands have total cost implications that exceed 30%. The employers group stated that it continues to be open to engaging NUMSA on an urgent basis to ensure that a balanced agreement is achieved.