Wage talks to end a four-day strike that started July 1 by more than 220,000 metalworkers in South Africa has failed as protests turned violent.
General Motors (GM) and Bayerische Motoren Werke AG halted production.
The National Union of Metalworkers of South Africa rejected an improved offer from the Steel and Engineering Industries Federation of Southern Africa, the employer group said in an e-mailed statement today. The strike prompted Moody’s Investors Service to warn yesterday that the country’s credit rating may be at risk.
Seifsa, as the employers’ group is known, said its offer to raise wages for the lowest-paid workers by 10 percent this year was the best it could make. No further talks are planned with Numsa, which is demanding a 12 percent pay increase and a ban on labor brokers.
General Motors shut its plant in the eastern coastal city of Port Elizabeth as “the strike in the metal and engineering sector has impacted upon supply of components to our production line, ” Gishma Johnson, the company’s spokeswoman, said in an e-mailed statement.
GM, which has a target to build 50,000 vehicles a year in South Africa, said its assembly of light commercial autos such as Isuzu trucks and Chevrolet utility vehicles is affected by the stoppage.
Meanwhile, BMW brought forward a week of planned maintenance at its plant outside Pretoria, halting production this past Tuesday. The factory will reopen July 8 with two shifts instead of the normal three if the strike continues. That may result in the loss of 120 vehicles a day.
“If the strike goes beyond two weeks, the risks to vehicle manufacturers and production plants will increase substantially,” Nico Vermeulen, director of the National Association of Automobile Manufacturers of South Africa.
A Numsa strike over pay at carmakers between August and October last year cost the industry at least 20 billion rand ($1.8 billion) in revenue, according to Naamsa.
The current stoppage follows a five-month strike by more than 70,000 platinum miners that caused South Africa’s economy to contract in the first quarter of the year. Finance Minister Nhlanhla Nene said this week the government’s economic growth target of 2.7 percent this year will probably be missed.
Labor Minister Mildred Oliphant is meeting with employers to seek a resolution to the strike and will hold talks with union leaders later, Mokgadi Pela, her spokesman, said by phone.
