Time to look within for job creation

The announcement by US company General Motors (GM) that it was pulling out of South Africa could not have come at a worse time for the country, already facing massive unemployment and bleak economic prospects.

GM’s announcement comes in the wake of South Africa having been downgraded by two international ratings agencies, Fitch and S&P Global, to subinvestment grade, as well as the looming decision by a third, Moody’s, who are almost certain to downgrade South Africa’s investment status soon.

The company’s decision – it said it is selling its light commercial vehicle manufacturing operations in Port Elizabeth to Isuzu, and will cease operations at the end of the year – will mean job losses in a region of the country that can illafford it because of its depressed economy and high unemployment.

It is cold comfort that we are not the only country affected and are not entirely to blame for the decision. Sales had been poor and GM had to make a tough business decision.

For context, GM is also pulling out of India, has already announced it is leaving Europe, and has ceased operations in Indonesia and Australia.

But it still rankles, in part because we are desperate for foreign investment and jobs, and in part because GM has been in this country for decades. It started manufacturing products in South Africa in 1926, pulled out of the country in the 1980s because of the policy of apartheid, and then returned in the 1990s under the new dispensation.

What is to be done?

The National Union of Metalworkers of South Africa, which claims to represent most of the more than 1 500 workers at GM, has threatened legal action to challenge the decision. It will not succeed.

South Africans – that is government, labour and business – need to stop politicking and work together to build a robust, local economy that creates employment and a more equal society.

Foreign investment will come and stay in the country when there is labour peace, political and policy certainty, and there is a shared vision among all three social partners about the future we want.

Sadly, the current government does not seem to grasp the depth of the gravity of our crisis.