GM suspends South African output as striking union spurns offer

JOHANNESBURG/CAPE TOWN Fri Jul 4, 2014 2:26pm EDT

Members of the National Union of Metal Workers of South Africa (NUMSA) protest on the streets of Durban July 1, 2014. REUTERS/Rogan Ward

Members of the National Union of Metal Workers of South Africa (NUMSA) protest on the streets of Durban July 1, 2014.

Credit: Reuters/Rogan Ward

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JOHANNESBURG/CAPE TOWN (Reuters) - General Motors (GM.N) suspended production at its main South African plant after a strike hit parts supplies, the U.S. automaker said on Friday, becoming the latest victim of relentless labor unrest in Africa's most advanced economy.

Violence erupted on some picket lines, as the wage strike by the National Union of Metalworkers of South Africa (NUMSA) dealt a further blow to an economy damaged by a five-month walkout in the platinum industry that only ended last week.

It will also further unnerve investors, increasingly frustrated by the unremitting labor strife and perceptions that Pretoria is unable, or unwilling, to rein in militant unions.

About 2,000 workers affiliated with the National Union of Mineworkers went on strike at Impala Platinum's IMPJ.J Marula mine on Friday demanding higher wages, in apparent response to the deal secured by rival union AMCU last week.

GM's suspension of output at its plant in the coastal city of Port Elizabeth showed the escalating impact of the walkout, after NUMSA rejected an increased wage offer from the Steel and Engineering Industry Federation of Southern Africa (SEIFSA).

"The plant has been shut since yesterday because of the parts supplier issues," spokeswoman Denise van Huyssteen said.

NUMSA's more than 200,000 members went on strike on Tuesday, a move employers say will cost the economy more than $28 million a day in lost output.

SEIFSA said it offered wage increases of up to 10 percent late on Thursday, revised from 8 percent. The union wants hikes of 12 to 15 percent, more than double the inflation rate.

"Regrettably, it would appear that we continue to be miles apart with the union," SEIFSA chief executive Kaizer Nyatsumba said in a statement.

In contrast, NUMSA boss Irvin Jim said on Friday he believed the two sides were "not very far from each other". Issues like a youth wage subsidy and the removal of labor brokers were key to a settlement, he told Reuters.

Other sticking points have been NUMSA's insistence that any agreement should apply for one year, while employers want to lock down a three-year deal.

GOVT MEETS UNIONS, EMPLOYERS

South Africa's labor minister was meeting the union after earlier talking to employers on Friday, a spokesman told Reuters, adding the government was hopeful of a deal soon.

Credit ratings agency Moody's said this week the labor unrest would consign South Africa to a third consecutive year of sub-par growth and posed risks for its rating.

"I think we've become prisoners of the ratings agencies ... I think our sovereignty is completely lost," NUMSA's Jim said.

In one industrial area east of Johannesburg, mobs of strikers smashed car windshields and attacked workers who crossed picket lines, a witness said.

"They are breaking factory windows," said James, who declined to give his surname. "They are attacking people".

President Jacob Zuma's government said it was concerned about the reports of vandalism and intimidation. It appealed for dialogue.

Around 26 strikers were arrested in Gauteng province, which includes Johannesburg, on charges of public violence and malicious damage to property, police said.

SEIFSA said many employers represented by the federation had reported "serious incidents of violence" by strikers, including damage to property and assaults on those reporting for work.

"People fear for their safety in their workplaces, where windows have been stoned, entrance gates broken and workers intimidated on site," said Marius Croucamp, head of the metals and engineering sector at the Solidarity union, which has not joined the NUMSA-led strike.

Some automakers said they had not yet been affected.

Japan's Toyota Motor Corp (7203.T) said it was "business as usual" despite the strike. "We still have full production capacity," spokeswoman Mary Willemse told Reuters.

The local unit of Mercedes Benz, an arm of Germany's Daimler AG DIAGn.DE, said it did not expect an immediate impact.

Police on Thursday said officers had fired rubber bullets to disperse workers blocking the entrance to the construction site of state power utility Eskom's [ESCJ.UL] Medupi power station.

The stoppage will further dent investor confidence already hurt by the platinum strike that dragged the economy into contraction in the first quarter.

(Additional reporting by Zandi Shabalala, Ed Cropley, Tiisetso Motsoeneng, Joe Brock and Stella Mapenzauswa in Johannesburg; Writing by Ed Stoddard and David Dolan; Editing by Pascal Fletcher and Mark Trevelyan)

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Comments (4)
Kahnie wrote:
Gee, militant unions wanting decent wages and conditions. Investors want cheap labor working in slave conditions. That’s capitalism for you.

Jul 04, 2014 1:36pm EDT  --  Report as abuse
Mikon wrote:
Unions are destructive cancers. If the members do not like the terms on which they initially agreed and got hired, they should quit and look for something better.
OH!!! There is NOT anything better? Too bad… maybe they should be thankful of even HAVING a job.

The current militant union actions are equivalent to an Amerrican IT Engineer going to his boss and demanding an immediate 10% raise, plus five extra vacation days per year, plus a company paid matching fund to his IRA or 401K retirement plan. AND, if he doesn’t get satisfaction, he will plant a Trojan Horse Virus in the company’s servers to severely damage their business. Further, he promises he will slash other employee’s vehicle tires and smash a few windshields to disrupt any normal operations. AND, if fully complied with, the IT Engineer will expect (nay, DEMAND) similar treatment next year… not two to four years down the road.

As to GM being “… the latest victim of relentless labor unrest in Africa’s MOST ADVANCED economy.” REALLY??? If that’s TRUE, then let’s check just how good that status really is.

South Africa was a progressive, thriving country with an expanding economy BEFORE Apartheid. How has South Africa performed since then? Read the following, then YOU decide! NOTE: SA petitions to the United Nations clearly document that the situation has DECLINED since this data was published.

Ethnic groups: Black African 79%, white 9.6%, colored 8.9%, Indian/Asian 2.5% (2001 census)
Death Rate: 16.99 deaths/1,000 population (July 2009 est.) Eighth highest in the world.
Life expectancy at birth: 48.98 years, one of the world’s worst, 212th country in the world.
HIV/AIDS – adult prevalence rate: 18.1% (2007 est.), 4th worst inthe world.
HIV/AIDS – deaths: 350,000 (2007 est.) (NOTE: NUMBER ONE IN THE WORLD.)
ECONOMY: GDP – real growth rate -1.8% (2009 est.), Number 141 inthe world and contracting.
Unemployment rate: 24% (2009 est.), 173rd in the world.
Population BELOW poverty line: 50% (2000 est.)
Distribution of family income – Gini index: 65 (2005), SECOND WORST in the World.
Budget: revenues: $74.92 billion, expenditures: $86.26 billion (2009 est.) That is, they are bankrupt.
Inflation rate (consumer prices): 7.2% (2009 est.), 166th highest in the world.
15.13% (31 December 2008, but only to their most credit-worthy customers.
Industrial production growth rate: -7% (2009 est.), 122nd in the world. This condition in spite of being one of the World’s countries with the MOST resources.)
Illicit drugs: Transshipment center for heroin, hashish, and cocaine, as well as a major cultivator of marijuana in its own right; cocaine and heroin consumption on the rise; world’s largest market for illicit methaqualone, usually imported illegally from India through various east African countries, but increasingly producing its own synthetic drugs for domestic consumption; attractive venue for money launderers given the increasing level of organized criminal and narcotics activity in the region and the size of the South African economy
Airports – with paved runways: total: 148, but only 10 with over 3,000 meters length needed for modern jets.
Heliports: 1 (2009) NOTE: ONLY one in the entire country.
Railways: total: 20,872 km, ALL built before Apartheid and now in dire need of repair.

Jul 04, 2014 4:14pm EDT  --  Report as abuse
Mikon wrote:
Unions are destructive cancers. If the members do not like the terms on which they initially agreed and got hired, they should quit and look for something better.
OH!!! There is NOT anything better? Too bad… maybe they should be thankful of even HAVING a job.

The current militant union actions are equivalent to an Amerrican IT Engineer going to his boss and demanding an immediate 10% raise, plus five extra vacation days per year, plus a company paid matching fund to his IRA or 401K retirement plan. AND, if he doesn’t get satisfaction, he will plant a Trojan Horse Virus in the company’s servers to severely damage their business. Further, he promises he will slash other employee’s vehicle tires and smash a few windshields to disrupt any normal operations. AND, if fully complied with, the IT Engineer will expect (nay, DEMAND) similar treatment next year… not two to four years down the road.

As to GM being “… the latest victim of relentless labor unrest in Africa’s MOST ADVANCED economy.” REALLY??? If that’s TRUE, then let’s check just how good that status really is.

South Africa was a progressive, thriving country with an expanding economy BEFORE Apartheid. How has South Africa performed since then? Read the following, then YOU decide! NOTE: SA petitions to the United Nations clearly document that the situation has DECLINED since this data was published.

Ethnic groups: Black African 79%, white 9.6%, colored 8.9%, Indian/Asian 2.5% (2001 census)
Death Rate: 16.99 deaths/1,000 population (July 2009 est.) Eighth highest in the world.
Life expectancy at birth: 48.98 years, one of the world’s worst, 212th country in the world.
HIV/AIDS – adult prevalence rate: 18.1% (2007 est.), 4th worst inthe world.
HIV/AIDS – deaths: 350,000 (2007 est.) (NOTE: NUMBER ONE IN THE WORLD.)
ECONOMY: GDP – real growth rate -1.8% (2009 est.), Number 141 inthe world and contracting.
Unemployment rate: 24% (2009 est.), 173rd in the world.
Population BELOW poverty line: 50% (2000 est.)
Distribution of family income – Gini index: 65 (2005), SECOND WORST in the World.
Budget: revenues: $74.92 billion, expenditures: $86.26 billion (2009 est.) That is, they are bankrupt.
Inflation rate (consumer prices): 7.2% (2009 est.), 166th highest in the world.
15.13% (31 December 2008, but only to their most credit-worthy customers.
Industrial production growth rate: -7% (2009 est.), 122nd in the world. This condition in spite of being one of the World’s countries with the MOST resources.)
Illicit drugs: Transshipment center for heroin, hashish, and cocaine, as well as a major cultivator of marijuana in its own right; cocaine and heroin consumption on the rise; world’s largest market for illicit methaqualone, usually imported illegally from India through various east African countries, but increasingly producing its own synthetic drugs for domestic consumption; attractive venue for money launderers given the increasing level of organized criminal and narcotics activity in the region and the size of the South African economy
Airports – with paved runways: total: 148, but only 10 with over 3,000 meters length needed for modern jets.
Heliports: 1 (2009) NOTE: ONLY one in the entire country.
Railways: total: 20,872 km, ALL built before Apartheid and now in dire need of repair.

Jul 04, 2014 4:14pm EDT  --  Report as abuse
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