Vehicle makers gear up to resume work

PRODUCTION at two of the seven vehicle manufacturing plants in the country did not resume yesterday despite an agreement with major unions to end the month-long steel and engineering sector strike.

Production did not resume at the Ford Motor Company of Southern Africa (FMCSA) and General Motors South Africa (GMSA), while BMW South Africa (BMWSA) was still operating on two instead of three shifts. Alisea Chetty, a Ford spokeswoman, said FMCSA would start normal production from today, adding that suppliers needed to build up stock.

Chetty confirmed that about 4 000 units had been lost but said Ford planned to increase its production over the next few months to recoup these. The company therefore did not foresee this having any permanent impact on its export sales.

Denise van Huyssteen, a GMSA spokeswoman, said it had gone through start-up procedures at its plant yesterday but only planned to resume normal production from today.

She said the plant had lost 18 days of production but this did not have any impact on its export business because it had sufficient inventory to continue supplying its export customers.

Guy Kilfoil, a BMWSA spokesman, said its plant would only be able to move back to three shifts later this week because of a shortage of component supplies.

Nico Vermeulen, the director of the National Association of Automobile Manufacturers of SA, said the industry was grateful the strike was over but stressed that it had severely dented its track record as a reliable supplier.

Vermeulen said the vehicle manufacturing industry had lost 465 jobs in the second quarter, which could partly be attributed to the loss of export business by some manufacturers and lower levels of demand in the domestic market.

Mary Willemse, a Toyota South Africa Motors spokeswoman, said its plant was back to normal production levels from yesterday but declined to comment on the number of units of production lost during the strike.

Willemse said Toyota would make every effort to recover lost production as soon as possible, which could be achieved through overtime production.

Nissan SA closed its plant from July 14 until last Tuesday during the strike to rebalance its inventory. Thabo Smouse, a spokesman, said it had resumed full production as planned.

Production at Mercedes-Benz South Africa and Volkswagen South Africa was largely unaffected.

Tumi Dlamini, the chief executive of Master Builders South Africa, said construction firms had reported significant delays in projects because of a lack of building material supplies and it would take time for these supplies to normalise, which would delay the completion of projects.

Azar Jammine, the chief economist at Econometrix, said it would take steel and engineering sector workers the full duration of the three-year agreement to get back what they had forfeited in wages during the strike.

Jammine said the strike had had negative impacts. In the short term it had disrupted production that would be difficult to catch up and in the longer term it had caused collateral damage by dissuading businesses from committing to investments.

Jammine said the agreement reached was “way beyond” what most businesses in the manufacturing sector could afford and would result in an increase in retrenchments.