Furthermore, it has had a negative cascade effect throughout the automotive manufacturing supply chain in South Africa.
Outside of the automotive industry, the strike action, now entering its third week, will affect the country as a whole. About 30% of South Africa’s manufacturing output, and 4.5% of the GDP, is accounted for by the vehicle and automotive component manufacturing industry. If you include retail and after sales, that figure jumps to GDP.
According to Van Zyl, this means lower economic growth, lower domestic and export production and sales, reduced industry profitability, substantial loss of income to workers, loss of revenue to the fiscus, lower foreign direct investment into South Africa and ultimately less employment. ‘There are no winners in a strike situation in the vehicle manufacturing industry which prodies stable employment with, but South African standards, attractive and high-quality employment conditions, remuneration levels and benefits,’ said Van Zyl.
He also went on to say that the double-digit offer from employers was highly competitive compared to other sectors and in relation to inflation. Including extra benefits, Van Zyl had this to say of the offer: ‘This offer from the automotive industry employers amounts to a total increase of more than 30% over the three-year period and is the best ever offered in the history of collective bargaining in the industry.’