Labour drives firm’s move to Le­sotho

Lesotho Times - - Business -

JO­HAN­NES­BURG — John­son Con­trols, a global leader in au­to­mo­tive seat­ing, over­head sys­tems, floor con­soles, door pan­els and in­stru­ment pan­els, re­lo­cated part of its op­er­a­tions in South Africa to Le­sotho be­cause of its need to achieve a more com­pet­i­tive man­u­fac­tur­ing foot­print.

This is the first time John­son Con­trols has pub­licly ex­plained the rea­sons for re­lo­cat­ing its au­to­mo­tive trim op­er­a­tions to Le­sotho last year. The re­lo­ca­tion is be­lieved to have re­sulted in the loss of hun­dreds of South African jobs. Last year, the Au­to­mo­tive Leather Com­pany also re­lo­cated from Ross­lyn in Pre­to­ria to Le­sotho, while wiring har­ness pro­ducer Kromberg & Schu­bert re­lo­cated to Botswana.

Th­ese firms ap­par­ently re­lo­cated to take ad­van­tage of cheaper labour costs in those coun­tries.

Lars Boelke, the com­mu­ni­ca­tions manager for au­to­mo­tive seat­ing in Europe and Africa for John­son Con­trols, stressed in re­sponse foot­print (in Le­sotho) to se­cure the com­pany’s trim busi­ness in the south­ern African re­gion,” he said.

Boelke said the re­lo­cated trim op­er­a­tions still sup­plied the com­pany’s cus­tomers in South Africa and re­mained an in­te­gral part of the South African au­to­mo­tive in­dus­try. He de­clined to quan­tify how many jobs had been lost in John­son Con­trols’ South African-based op­er­a­tions be­cause of the re­lo­ca­tion or com­ment on what in­vest­ment the com­pany had made in Le­sotho.

But he con­firmed that John­son Con­trols’ Le­sotho plant op­er­a­tions em­ployed about 650 peo­ple.

“Re­lo­cat­ing busi­ness ob­vi­ously al­ways also means re­lo­cat­ing jobs. In to­tal we cre­ated more jobs in Le­sotho than we had to ter­mi­nate in South Africa,” he said.

Boelke con­firmed that John­son Con­trols’ in­te­ri­ors and seat as­sem­bly busi­nesses in South Africa now pro­vided em­ploy­ment to about 1 000 peo­ple.

How­ever, John­son Con­trols said in Oc­to­ber in a state­ment, when the com­pany cel­e­brated 20 years of do­ing busi­ness in South Africa, that it es­ti­mated it would cre­ate 250 to 300 jobs when it started its op­er­a­tions in the coun­try in 1994, but now em­ployed more than 2 000 peo­ple and gen­er­ated more than R2.5 bil­lion in rev­enues.

The state­ment did not men­tion the re­lo­ca­tion of the com­pany’s trim op­er­a­tions.

Robert Houdet, the ex­ec­u­tive direc­tor of the Na­tional As­so­ci­a­tion of Au­to­mo­bile Com­po­nent and Al­lied Man­u­fac­tur­ers, warned of the dan­ger fac­ing the au­to­mo­tive in­dus­try if South Africa con­tin­ued to ex­pe­ri­ence labour in­sta­bil­ity.

Houdet told Busi­ness Re­port that labour sta­bil­ity could still lead to com­pa­nies dis­in­vest­ing or re­lo­cat­ing from the coun­try.

“This is a warn­ing to South Africa that should there be labour in­sta­bil­ity, coun­tries that pro­vide labour sta­bil­ity will be­come more at­trac­tive,” he said.

— In­de­pen­dent.

AU­TO­MO­TIVE firm, John­son Con­trols, has been us­ing this Tikoe fac­tory since Philips Light­ing closed shop last year.

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