Seven percent of South Africa’s economy will soon stall along with the temporary closing of the country’s Ford Motor Co. and Toyota Motor Corp. production plants. The halt in manufacturing is due to a now three-week metalworkers strike that began in early July.The Ford plant expects a setback of at least 350 completed vehicles per day.
“Auto manufacturer employees aren’t on strike but workers at auto part producers are, and that has had a knock-on effect for the car makers. Ford said has stopped production at its Silverton plant which makes the Ford Ranger and is then distributed to markets in other parts of the world. Toyota said it is stopping output at two of its biggest production lines because it has exhausted stockpiles of its car parts,” according to the Wall Street Journal.
The strike, which was organized by the National Union of Metalworkers of South Africa, is not the first of its kind; however, it is one of the largest. It follows the recent example of the country’s platinum industry – an explosive five month shutdown that fragmented the South African economy.
The metalworkers strike previously crushed production rates for one of South Africa’s major beverage can suppliers, Nampak.
After initial offers made by both Ford and Toyota were rejected, about 200,000 metal and engineering manufacturing staff banded together to combat low salaries. The workers are seeking more than a 10 percent raise and more relaxed one-year contract agreements.
Bloomberg notes, “The value of exports from the automotive industry in South Africa rose 8.2 percent to 103 billion rand ($9.6 billion) in 2013, according to the National Association of Automobile Manufacturers of South Africa. Passenger cars and light commercial vehicles were shipped to 87 destinations, with Germany and the U.S the biggest markets.”
The strike impacts not only Ford and Toyota, but around 12,000 other companies, as well.