Car wage talks move up a gear Don’t hide behind economy – Numsa

THE battle lines have been drawn in the automotive industry as employers square up against labour for what is expected to be robust wage negotiations. With the Eastern Cape being home to four of the major manufacturers in South Africa – Volkswagen, General Motors, Ford and Mercedes-Benz – and scores of automotive suppliers, thousands of workers in the province will be among the more than 31 000 across the country who will be affected by the outcome of the talks.

Key elements in this year’s negotiations are National Union of Metalworkers of SA (Numsa) demands for a one-year agreement, a 20% pay hike and the creation of a “mega” bargaining forum through the inclusion of employees in related sectors, such as refineries.

Negotiations between the parties got under way at the Motor Industry Bargaining Council on Tuesday.

Today, the parties are expected to thrash out the finer details of what each wants.

The main role-players include the Automobile Manufacturers’ Employers Organisation (Ameo), which represents employers at all the major original equipment manufacturers, and labour representative Numsa.

Union general secretary Irvin Jim said workers should not have to pay for the global economic crisis.

“While we appreciate that the economy is bad, employers cannot hide behind the economic crisis,” he said.

Jim said in addition to its base demands, the organisation had a number of other demands that would be tabled as part of the negotiations, including that manufacturers would not shift production to neighbouring countries.

He said Numsa was seeking constructive negotiations which were not at the expense of workers.

“We will stick to our demand for a one-year agreement,” he said.

“If there are counter-offers on the agreement duration or any of the other issues, we will listen.

“While it is still early days, indications are that the negotiations will be a very robust process.”

On the contentious issue of strike action, Jim said the option remained on the table for Numsa.

“The possibility of any strike action will depend on the cooperation by the employers,” he said.

“Strike action is always a last resort.”

The start of the bargaining comes amid challenging conditions in the economy and the automotive industry and ahead of the expiry of the existing three-year labour agreements at the end of August.

Ameo chief negotiator Thapelo Molapo said while the parties had exchanged official demands and proposals on Tuesday, both sides had now also concluded the process of clarifying and motivating the demands and proposals.

“The negotiations are expected to be concluded efficiently,” Molapo said.

“Both parties are guided by, and follow, a clear and robust set of rules.”

He would not comment on Numsa’s demand for a one-year agreement.

“The industry has negotiated multi-year agreements for the past two decades,” Molapo said.

“The duration of the agreement is an outcome of negotiations and is based on consensus between the parties.”

He said Ameo anticipated that the negotiations would be concluded without any instability or disruption to production.

Asked about fears raised by manufacturers that any strike action may be compounded by secondary strikes in downstream businesses, Molapo said: “Given the intercon-

nectedness of our industry to global auto manufacturing, the significance of the negotiations cannot be overstated.”

Motor Industry Bargaining Council general secretary Tom Mkhwanazi said he believed employers and unions would find common ground and avoid a strike this year.

When Numsa declared a dispute over wage negotiations in 2013, the industry contended with more than eight weeks of back-to-back strikes, resulting in the loss of R11.6-billion in production.

Volkswagen South Africa managing director Thomas Schafer warned last month that the industry was at a crossroads and any labour instability – such as that in 2010 and in 2013 – would damage its international reputation and could be devastating for the industry.

“Production is going very well here in Uitenhage, but hangs in the balance, particularly with regard to import and export costs,” Schafer said.

“It is very important to maintain the balance and avoid instability.”

The start of the negotiations coincides with a General Motors SA (GMSA) announcement that it is revising its production schedule for this year.

It said last week it was in discussions with staff over voluntary separation and early retirement to reduce its 1 800-strong workforce.

GMSA spokeswoman for the company’s Africa and Middle East regions, Denise van Huyssteen, cited the economic weakness in key sub-Saharan African markets, which had led to a significant decline in new vehicle volumes in those markets and in South Africa.

“As a result, we have no option but to revise our production schedule,” she said.

“We are therefore working with key stakeholders to consider all alternatives.”

While upbeat about prospects for vehicle exports from South Africa, the National Association of Automobile Manufacturers of SA (Naamsa) noted that the overall outlook for this year was unfavourable.

This was because of the difficult economic environment, low growth prospects, the likelihood of new vehicle price increases being above inflation, and possible further interest rate hikes.

Naamsa said it expected demand in the new car market to decline by about 9% in volume terms and new commercial vehicles by about 5%.

“Domestic economic growth is set to remain constrained in 2016 and into 2017,” it said.

Nelson Mandela Bay Business Chamber chief executive Kevin Hustler said members trusted that the parties involved in the automotive wage negotiations would reach a speedy agreement.