SOUTH Africa’s automotive sector, already reeling from poor sales, now seems set to suffer a further blow – as carworkers threaten to take strike action should their wage demands not be met.
The National Union of Metalworkers of SA (Numsa), which represents the bulk of the workers in the sector, and the Automobile Manufacturers Employers Organisation (AMEO), are set to resume talks in Pretoria next week after talks in Port Elizabeth last week failed to yield fruit.
Among other things, Numsa is demanding a 20% wage increase across the board. It wants morning, afternoon and night allowances of 10%, 20% and 30%, respectively.
Numsa, the largest member of new confederation, the SA Federation of Trade Unions (Saftu), is also demanding an annual bonus increase from 8.33% to 12%; six months paid maternity leave and 10 days paid paternity leave; as well as a transport allowance of R5,000 a month.
And it wants clerks, welders, spray painters and metal-finish workers too to be paid a 20% allowance.
Numsa’s demand is almost five times what the employers are offering. And AMEO has tabled a 4.5% wage increase in line with current inflation. Economists expect the rate to moderate – but only to 4.4%.
Numsa auto and tyre co-ordinator, Vusumzi Mkhungo, also said that the parties are scheduled to meet again in Pretoria from August 12 to August 14.
He explained that the Port Elizabeth talks, which took place from July 30 to August 2, had done little to help the union and employers agree with one another on Numsa’s demands for higher wages.
The upcoming meeting was expected to shed a ‘clearer picture of where we are going’, explained Mkhungo. But he had to add: ‘There are no areas where we have reached consensus as yet.’
AMEO spokesperson Andile Dlamini confirmed for his part that the wage talks were continuing. ‘We are still in negotiations, we shall resume our negotiations next week,’ he said. ‘We don’t have anything to report as yet because the negotiations are still ongoing.’
The automotive sector is one of the key pillars of the SA economy, contributing 6.8% to GDP. GDP contracted 3.2% in the first quarter of 2019.
In June, President Cyril Ramaphosa said that South Africa had to revitalise and expand its productive sectors if it was to meet its GDP growth targets of 1.3% in 2019 and 1.7% in 2020.
In 2018, the export of vehicles and automotive components accounted for R178.8bn, equating to 14.3% of SA’s total exports.
The automotive sector has been struggling to grow sales faster in recent months – as debt-laden consumers battling job losses put off buying cars and other big-ticket items.
And data released by the National Association of Automobile Manufacturers of SA (Naamsa) last week showed too that the declining trend of new vehicle sales continued into July.
The new passenger car market has, meanwhile, registered a decline of 2,617 cars, or a fall of 8.2% to 29,477 units, compared with the 32,094 new cars sold in July last year.
Naamsa said that out of the total reported industry sales of 46,077 vehicles, an estimated 36,974 units or 80.2% represented dealer sales, an estimated 14% represented sales to the vehicle rental industry, 3.6% to industry corporate fleets, and 2.2% to government.
And at the same time the finance union, Sasbo, has threatened a ‘total shutdown’ of the banking industry next month if its members’ demands for minimal retrenchments in the sector are not heeded.
Sasbo general secretary Joe Kokela said the union planned to strike over two days next month against job losses in the private sector.
He added that Standard Bank planned to retrench 6,000 employees, Nedbank 3,000 employees, and Absa 878 employees.
However, Standard Bank poured cold water on the claim, and Nedbank told BusinessLIVE that it did not have plans to cut 3,000 jobs. It claimed that after the reorganisation process at the bank, fewer than 100 employees remained unplaced.
Kokela however has insisted that his figures are correct.
For its part, Sasbo said it could not continue to be an innocent bystander in seeing its members losing their jobs and contributing to high unemployment and then expect them to survive in a wilting economy. The union said there had been an increase of notices served on Sasbo to attend to retrenchment process consultations.
But Kokela said talking to the banks on the issue of job losses was like ‘flogging a dead horse’.
‘In our history,’ he said, ‘the last strike we had was in 1920, and it was not about job losses. We are looking at a total shutdown.’
Kokela added that the planned two-day strike, on a date in September still to be determined, would be held under Section 77 of the Labour Relations Act.
Furthermore, it has emerged that households are now employing some 49,000 fewer people – just as overall unemployment rises to 29%.
There are 49,000 fewer people employed in domestic environments while the beleaguered mining sector is also among the industries to have shed thousands of posts. This section gives workers the right to take part in protest action to promote or defend their socio-economic interest and be protected against dismissal and other disciplinary action.
Kokela said the union wanted the banks to consider options other than retrenchments, and to re-skill employees whose positions were at risk.
He said Standard Bank knew five years ago that it wanted to reduce its branch network but only started helping employees facing retrenchment to acquire new skills just a few months ago.
‘All that should happen is for the banks to show they have empathy and show that they are genuine. That they want to sit down and discuss how they want to save jobs,’ he said.
Standard Bank on Tuesday said it had announced in March that it would close 91 branches as it realigned its retail and business banking model to the ‘changing needs of customers’ amid rapid adoption of digital banking products and services.
This would affect some 1,200 employees.
‘Standard Bank refutes that it will retrench 6,000 employees. Standard Bank has made strides to ensure that impacted employees are absorbed into the other roles within the bank,’ spokesperson Ross Linstrom said.
The bank added that where this had not been possible, or where employees had opted not to apply for other positions within the network, it had also set aside funds to help employees acquire new skills to improve their competitiveness in the labour market, as well as entrepreneurial training.
- Meanwhile, in neighbouring Zimbabwe, more than two million people are reportedly facing starvation after a severe drought which affected food harvests, the World Food Programme has warned in a report.
The UN food agency has launched a humanitarian appeal for US$331 million to assist those affected in the southern African nation.
‘We are talking about people who truly are marching towards starvation if we are not here to help them. We are facing a drought unlike any that we have seen in a long time,’ David Beasley said while launching an aid programme in the Zimbabwean capital Harare last Tuesday.
And nearly 5.5 million people – a third of Zimbabwe’s population – will need food assistance by 2020: i.e., by next year, according to a UNICEF crisis report released as long ago as June.
Zimbabwe is battling the impact of droughts that occurred between October and May, and the effect of a powerful cyclone that ripped through the eastern parts of the country.
The drought has also depleted water sources, leaving more than two million unable to access clean water in the country. Zimbabwe is also facing a crippling economic crisis that has taken a toll on the welfare of its citizens.
Roseline Marenyi, 30, a mother of two who lives in the Harare neighbourhood of Mbare told CNN she has had to cut down on daily food consumption due to rising prices.
‘Life is really getting tough. We can only afford two meals a day and this is not good for my children’s nutrition. I think we are poorer this year than any other year,’ Marenyi said.
‘Drought’ means that residents are only allowed to use the tap once a week.
And Eddie Rowe, the World Food Programme’s national director, told CNN on Tuesday that climate change challenges had worsened the food crisis.
‘The food security situation in the country has been compounded by the economic situation. This year we have more hungry Zimbabweans than ever before,’ Rowe said.
Zimbabwe declared the drought an emergency in July, and government officials warned local media that millions could go hungry across the country.
Harare resident 40-year-old firewood trader Never Mapako told reporters that he had registered his family with a local NGO giving food items.
‘I recently registered myself and my family for monthly food allowance because I can’t continue like this,’ he said. ‘It’s a desperate situation, especially for us in the urban areas,’ Mapako said.
The Zimbabwe Congress of Trade Unions have announced that, having received a mandate from members, it intends to call a two-day general strike.