NOT one vehicle has come out of the Mercedes-Benz plant for four weeks.
One boss has called the rolling strikes that brought production to a halt in East London a “tragedy”.
As one of the city’s largest employers and a fulcrum of the local economy, losses to the car giant are felt far beyond production lines.
“This is a tragedy irrespective of your perspective – there are no winners,” said Mercedes-Benz South Africa (MBSA) vice-president of manufacturing Arno van der Merwe. “It is imperative that the process of strikes comes under the spotlight in weeks to come, as the country continues to count losses from this ‘strike season’.”
The company declined to comment on its actual losses and financial implications. The Daily Dispatch earlier reported MBSA builds about 250 vehicles a day but a source yesterday said the number was up to about 260 units a day now.
That translates to lost production of over 5700 units since August 19 – an estimated R2.3-billion in retail terms, said economist Chris Hart.
The production losses began when workers at all original equipment manufacturers downed tools for three weeks, after which car parts workers embarked on mass action that has lasted a week so far.
It is no secret the local plant is being watched carefully from afar in Germany, and any decision to shut the operation would substantially gut the city’s economy.
MBSA’s bottom line is not the only casualty. Suppliers to the German carmaker also lose out, as does Buffalo City Metro’s revenue through tariffs – money that should service residents.
Metro spokesman Thandy Matebese declined to comment.
“We are not in a position to respond on the economic impact, economic analysts can respond better.”
Questions to the province’s economic development department were not responded to at the time of going to print. EC Socio-Economic Consultative Council CEO Andrew Murray was also unavailable.
The Dispatch reported this week MBSA workers had to be sent home after one shift on Monday amid a second round of labour action by car component workers led by National Union of Metalworkers of South Africa. During the first strike, an estimated R20-billion – or R700-million per day – was lost to the South African economy.
Hart said it would be difficult to make up from the losses.
“People have to borrow money and go to unsecured lending, pushing themselves into debt.”
Hart warned unions that investors like MBSA’s parent company Daimler watch labour behaviour closely and persistent unrest affects their investment decisions.
“In an economy like East London the automotive industry is central to the private sector. The fact those workers are not earning impacts on other local business because there will be less money in circulation.”
Citing Ford Australia, which closed its plant earlier this year after labour unrest, and BMW South Africa, which said it would put expansion plans on hold after the strike, Hart said investors were getting impatient with labour unrest.
“If they so wish they are in a strong position to close the plant, leaving no jobs. For investors to dispense with the trouble it is easier to scale back enormously or shut down completely.”
Border-Kei Chamber of Business executive director Les Holbrook lambasted government’s apathy.
“It’s amazing premier Noxolo Kiviet hasn’t said anything. Labour minister Mildred Oliphant has also said nothing throughout this crisis.
“Don’t be surprised if investors pull out. We need to look at why SA can’t create jobs,” he said.
MBSA employs more than 2000 people. — siyam@dispatch.co.za
Merc count cost of BIG cash meltdown
One boss has called the rolling strikes that brought production to a halt in East London a “tragedy”.
As one of the city’s largest employers and a fulcrum of the local economy, losses to the car giant are felt far beyond production lines.
“This is a tragedy irrespective of your perspective – there are no winners,” said Mercedes-Benz South Africa (MBSA) vice-president of manufacturing Arno van der Merwe. “It is imperative that the process of strikes comes under the spotlight in weeks to come, as the country continues to count losses from this ‘strike season’.”
The company declined to comment on its actual losses and financial implications. The Daily Dispatch earlier reported MBSA builds about 250 vehicles a day but a source yesterday said the number was up to about 260 units a day now.
That translates to lost production of over 5700 units since August 19 – an estimated R2.3-billion in retail terms, said economist Chris Hart.
The production losses began when workers at all original equipment manufacturers downed tools for three weeks, after which car parts workers embarked on mass action that has lasted a week so far.
It is no secret the local plant is being watched carefully from afar in Germany, and any decision to shut the operation would substantially gut the city’s economy.
MBSA’s bottom line is not the only casualty. Suppliers to the German carmaker also lose out, as does Buffalo City Metro’s revenue through tariffs – money that should service residents.
Metro spokesman Thandy Matebese declined to comment.
“We are not in a position to respond on the economic impact, economic analysts can respond better.”
Questions to the province’s economic development department were not responded to at the time of going to print. EC Socio-Economic Consultative Council CEO Andrew Murray was also unavailable.
The Dispatch reported this week MBSA workers had to be sent home after one shift on Monday amid a second round of labour action by car component workers led by National Union of Metalworkers of South Africa. During the first strike, an estimated R20-billion – or R700-million per day – was lost to the South African economy.
Hart said it would be difficult to make up from the losses.
“People have to borrow money and go to unsecured lending, pushing themselves into debt.”
Hart warned unions that investors like MBSA’s parent company Daimler watch labour behaviour closely and persistent unrest affects their investment decisions.
“In an economy like East London the automotive industry is central to the private sector. The fact those workers are not earning impacts on other local business because there will be less money in circulation.”
Citing Ford Australia, which closed its plant earlier this year after labour unrest, and BMW South Africa, which said it would put expansion plans on hold after the strike, Hart said investors were getting impatient with labour unrest.
“If they so wish they are in a strong position to close the plant, leaving no jobs. For investors to dispense with the trouble it is easier to scale back enormously or shut down completely.”
Border-Kei Chamber of Business executive director Les Holbrook lambasted government’s apathy.
“It’s amazing premier Noxolo Kiviet hasn’t said anything. Labour minister Mildred Oliphant has also said nothing throughout this crisis.
“Don’t be surprised if investors pull out. We need to look at why SA can’t create jobs,” he said.
MBSA employs more than 2000 people. — siyam@dispatch.co.za
Would you like to comment on this article?
Register (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Trending Now
Latest Videos