It is difficult to imagine East London without Mercedes-Benz; it is the brand that now defines the city. But how is it that a global motor giant came to be located in this small, little-known South African city?
What made the internationally renowned company choose this city in a poor region to make its cars? And, why does it stay here, when other locations might seem to be more attractive?
The answer to the last question is easy enough and relates largely to the huge effort and endeavour of the East London based auto-motor working class and technicians, who continue to deliver world class service on the shop floor, producing cars that have very few faults, that are delivered on time and in the volumes the company requires for export. The achievement of the MBSA East London plant is an extraordinary collective effort of which the city and the company can rightly be proud. Let us hope there will be many new export contracts to come.
The other set of questions are less often raised, but are equally interesting and important especially in the context of the city and the region’s current difficulty in attracting new investment.
Mercedes-Benz did not invest in East London by accident. It deliberately chose the city. It’s worth reflecting on what these reasons were when thinking about harnessing the city’s economic and investment potential.
In my reading of East London’s history, the roots of MBSA lie in the collective efforts of group of motor enthusiasts led by “Bud” Bishop in amateur local motor clubs in East London in the 1930s. They put money and energy into developing a competitive racing circuit, called the “Prince George circuit”, in the city. They then approached the Royal Automobile Club (RAC) to secure the rights for South Africa to host a grand prix in the late 1930s and ran four South African Grands Prix from 1936 to 1939.
When World War 2 broke out, the grand prix circuit closed down. After the war the RAC again looked to South Africa to host an event but there were no circuits that met their new exacting standards. The industrial expansion of East London had engulfed the old Prince George circuit.
In the meantime, a group of motor distributors in the city, clubbed together in 1949 to form a local production company, Car Assembly Distributors (CDA) in the belief that it was cheaper to assemble cars for the local market than import them as finished products.
From 1947 to 1954, East London became the fastest growing industrial city in South Africa, with an overall industrial growth index of 260, compared to 220 of the southern Transvaal and 198 of Port Elizabeth.
It was during this industrial expansion in the city, largely driven by new British investment interest that Exide batteries followed up on the CDA investment with a new production facility worth more than £1-million.
Early motor sport and motoring enthusiasm was thus converted into an assembly plan that started with the production of Nash vehicles and Renaults and later moved on to luxury cars, such as Alpha Romeo and Jaguar that were coming off the production line by the late 1950s. It was indeed cheaper to assemble and distribute vehicles into SA than to import them.
The East London Technical College responded by offering a range of new courses to train motor mechanics and electricians. It was at this time that Mercedes-Benz joined the queue to assemble its cars here.
But Mercedes was initially no more committed to the city than any of the other luxury car manufacturers. It was simply another assembly plant.
The real commitment from Mercedes to the city came later when it first took a stake in CDA around 1960 and then bought out the plant and industrial site in 1967, which is where it is still located today.
So why did Mercedes take this step?
One factor was the region’s association with the German settlers of the 1860s, some of whom played a critical role in building towns and infrastructure in the Border region.
On October 10 1960, East London held a special centenary celebration for the 1860 German settlers and unveiled an impressive monument in their honour on the beachfront. But ethnic nostalgia alone was not a compelling enough reason for investment, especially in a city which had a British colonial feel and was anti-republican and aligned with the British Commonwealth.
The reason Mercedes-Benz saw East London as an investment opportunity lay elsewhere, in the reconstruction of the city as South Africa’s premier motor sport city.
After being turned down for post war grand prix events motor sport enthusiasts once again began to rebuild the sport. They introduced new events in the 1950s, notably the popular East London Winter Handicap, modelled on the Monaco Grand Prix that ran through the city’s streets on the Esplanade. It attracted thousands of winter tourists and most of South Africa’s leading racing drivers.
After several years and growing success, the city-based South African Grand Prix Committee (SAGPC) under the leadership of Clive Vice asked the local motor clubs to approach the American oil company, Caltex (Africa) Pty Ltd, to sponsor a winter rally event that would run on dirt roads from East London up the Border corridor and through the southern Transkei and back to East London.
This event developed modestly, but became a joint attraction with the Winter Handicap by the late 1950s.
The city also hosted other motor shows and events. In the summer months in the mid-1950s motor sports enthusiasts started a Vespa scooter rally through the city as part of the Christmas festivities. They also introduced a Concours d’Elegance motor show on the beachfront which later in March moved the East London Agricultural Show, where those who attended could also watch motor racing newsreels from grand prix events around the globe.
In 1957 all this energy was threatened by the death of a driver during the Winter Handicap. Motor enthusiasts and the city faced their moment of truth: give up on a 20-year dream of re-establishing themselves as hosts of the SA Grand Prix, or let all the momentum they had accumulated in auto-motive productive and sport fade away.
In a visionary move in 1958, following impassioned argument and debate, the city council decided to back the grand prix committee by providing the assurance that the city and its ratepayers would fund, to the tune of £35000, a state of the art race track, which could be leased to the grand prix committee.
It was a huge investment for a small city and a risky endeavour, given that getting a grand prix would only be confirmed once the track was in place.
Once the city council was committed to the track, motor sports clubs and officials went out into the region seeking additional funding and received support from the divisional council and Cape provincial administration. But it was ultimately Caltex that became their guarantor by offering to sponsor the South Africa Grand Prix and cover any losses the organisers incurred.
In 1960, with the full support again of the Royal Automobile Club, East London held the first globally recognised SA Grand Prix in nearly two decades. About 50000 spectators came to view the event, then held in December during the peak tourism season.
All eyes were focused on legendary British driver Stirling Moss who won the inaugural event and returned every subsequent year until he retired.
Between 1960 and 1968, before business in Johannesburg managed to pry the premier South African motoring calendar event away, East London was the undisputed king of motor sport in South Africa, with three major annual events – the international Grand Prix, the Winter Handicap (now held at the West Bank circuit) and the Caltex Amatola Rally.
Little wonder that the city was the obvious choice for the global automotive giant, Mercedes-Benz. The rest, as they say, is history. There are other similarly uplifting examples in the city’s history of potential being realised, such as the rise of surfing East London in the 1970s, the Gunston 500 and the establishment of Nahoon Reef as a surfing destination on the international circuit.
There is also, of course, the extraordinary story of the “Mdantsane phenomenon” that produced a crop of world champion boxers in the 1980s and 1990s.
In motor racing, it was Jody Scheckter, the son of Jewish East London car dealers and a child spawned by the history of motor sport that I have described, that remains South Africa’s one and only Formula One champion.
Cities make their own luck, and also make their own history. They are built on passion, enterprise and innovation of precisely the kind that brought Mercedes-Benz to East London. Successful cities cannot be created through national government policies and laws. They cannot simply be legislated. They have to be built from below, by citizens and enthusiasts, with a vision and commitment to place-making.
In its current phase of industrial decline, East London would do well to look carefully at its own history and reflect on where it succeeded and failed in the past.
If there is anything to learn from its remarkable success stories, it is that good leadership, sound strategy, dogged tenacity, a willingness to take risks and the formation of solid private and public partnerships are critical aspects of city building.
Leslie Bank is adjunct professor at the University of Fort Hare and deputy director of the economic performance and development unit at the HSRC