Stock Groups

South African union starts indefinite strike, auto industry fears impact By Reuters


© Reuters. As they gather, members of the National Union of Metalworkers of South Africa hold placards in preparation for an indefinite strike. This threatens to stop supplies of parts needed to build new cars. REUT

CAPE TOWN, (Reuters) – South Africa’s largest metalworkers union launched Tuesday an indefinite strike to demand pay increases and block supply of parts for new cars. Officials from the union and industry said that they were threatening to stop supplies of spare parts.

After talks between employers and wage-seekers fell through, the National Union of Metalworkers of South Africa has demanded a complete shutdown of the engineering sector.

NUMSA released a statement saying that they have no other choice than to strike, and withhold labour indefinitely until our legitimate demands are met.

On Tuesday the union organized marches and rallies throughout the country. Thousands attended a march through downtown Johannesburg, where demonstrators wearing NUMSA red washed up signs that included “An Injury to One is an Injury to All”.

NUMSA requested an 8% all-over wage increase for the first year in a contract, followed by a 2% inflation rate plus 2% rise over the next two years. At the moment, annual inflation hovers at 5%.

Steel and Engineering Industries Federation of Southern Africa, an industry body, had proposed 4.4% in 2021 and inflation plus 0.5% for 2022. Inflation plus 1% was offered in the third.

South Africa’s economy was badly hit by the COVID-19 epidemic, which made it difficult for employers to agree to raise their salaries above inflation.

Last year, car sales dropped by around 30% in both the domestic market and abroad. This was a blow to major brands like Ford, BMW, and Nissan, which have all local facilities.

Renai Moothilal (executive director, National Association of Automotive Component and Allied Manufacturers), told Reuters that she urged parties to quickly resolve the impasse and avoid long-term damage and possibly line stops to vehicles being built in SA and elsewhere.

Mark Roberts is a Retail Motor Industry Association lead convenor. He stated that if NUMSA strikes lasted longer than one week, supplies might be disrupted.

Separately, the largest union federation in the country called for its members not to work Thursday.

COSATU is aligned to the ruling African National Congress party, but criticizes its policies sometimes. It accuses government of economic mismanagement in the coronavirus crisis.

It is trying to force policymakers into adopting a less restrictive fiscal stance for the mid-term budget next month.

Disclaimer Fusion MediaThis website does not provide accurate and current data. CFDs are stocks, indexes or futures. The prices of Forex and CFDs are not supplied by exchanges. They are instead provided by market makers. As such, the prices might not reflect market values and could be incorrect. Fusion Media is not responsible for trading losses that may be incurred as a consequence of the use of this data.

Fusion MediaFusion Media or any other person involved in the website will not be held responsible for any loss or damage resulting from reliance on this information, including charts, buy/sell signals, and data. You should be aware of all the potential risks and expenses associated with trading in the financial market. It is among the most dangerous investment types.