BMW plant. Picture: SUPPLIED
BMW plant. Picture: SUPPLIED

The SA’s automotive sector, already reeling from poor sales, could take a further knock with workers threatening to go on strike if their wage demands are not 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 similar 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.

It also wants clerks, welders, spray painters and metal-finish workers to be paid a 20% allowance.

Numsa’s demand is almost five times what the employers are offering. AMEO has tabled a 4.5% wage increase in line with the country’s inflation rate.

Economists expect the rate to moderate to 4.4%.

Numsa auto and tyre co-ordinator Vusumzi Mkhungo said the parties are scheduled to meet again in Pretoria from August 12 to August 14.

He said the Port Elizabeth talks that were held from July 30 to August 2 did little to help the union and employers find each other on Numsa’s demands for higher wages.

The upcoming meeting was expected to shed a “clearer picture of where we are going”, said Mkhungo, adding: “There are no areas where we have reached consensus on as yet.”

AMEO spokesperson Andile Dlamini confirmed that the wage talks were continuing. “We are still in negotiations, we shall resume our negotiations next week. 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 SA 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.

Data released by the National Association of Automobile Manufacturers of SA (Naamsa) last week showed that the new vehicle sales declining trend continued into July.

The new passenger car market had 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.

mkentanel@businesslive.co.za