* Strike costs economy 300 mln rand a day
* Employer body: pressure on car firm to leave S.Africa
* Union reverts to 15 pct demand, more than double inflation
* Former ANC ally has fallen out with ruling party
* Strike follows 5-month platinum stoppage
(Adds employers' group saying risk U.S. firm may move out)
By Tiisetso Motsoeneng and Stella Mapenzauswa
JOHANNESBURG, July 1 A U.S. car manufacturer was
putting pressure on its South African unit to close due to
labour troubles, an employers' body said on Tuesday as more than
220,000 engineering and metal workers launched a wage strike.
The boycott by NUMSA union, hot on the heels of a crippling
five-month platinum stoppage, will cost the economy more than
300 million rand ($28 million) a day, the Steel and Engineering
Industries Federation of Southern Africa (SEIFSA) said.
As members of the National Union of Metalworkers of South
Africa (NUMSA), the country's largest union, marched in major
cities, its leaders withdrew a compromise 12 percent demand,
upping it to an original 15 percent.
"Since the negotiations have collapsed we must revert back
to our initial demand," spokesman Castro Ngobese said. Employers
had 48 hours to respond and resume talks or face a prolonged
boycott, he added.
South Africa is still catching its breath after the platinum
strike that ended last week, but not before dragging the economy
into a first quarter contraction.
Steel and metals manufacturing directly accounts for a fifth
of the factory sector, and the economic impact of NUMSA's action
will be heavier than the platinum strike, Barclays Africa said.
Each day that NUMSA members were away from work would cost
South Africa the equivalent of 0.014 percent of its daily gross
domestic product, SEIFSA chief executive Kaizer Nyatsumba said
in a statement.
The chief of a major car maker based in South Africa had
told Nyatsumba he was under "considerable pressure" from the
firm's U.S. head office to move operations to a country with a
more stable labour environment, SEIFSA said.
The latest strike is likely to hit the likes of construction
and engineering firms Murray & Roberts and Aveng Ltd
, both involved in building two crucial power stations
for state-owned utility Eskom.
Murray & Roberts, which is helping build steam generators
for both power stations, said no work was taking place at parts
of the Kusile plant and only minimal work was being done at
parts of the Medupi station.
South Africa's Labour Court had issued an order barring
NUMSA from striking at Eskom's plants, spokesman Andrew Etzinger
AUTO PARTS MAKERS IN FIRING LINE
The utility expects to get the first unit of Medupi
operating early next year but the strike could delay that.
Auto parts makers such as Dorbyl are also in the
firing line, raising fears that a prolonged stoppage could
affect production in the automotive sector.
As many as 20 companies supplying Toyota Motor Corp
, Ford Motor, and General Motors are
affected, said Ken Manners, vice president of the South African
national automobile components industry body NAACAM.
"We have taken contingency plans, looking at stocking up on
parts and there has been greater inter-company cooperation to
try and create a buffer from the strike. The impact will really
be felt if the strike is prolonged," he told Reuters.
A four-week strike in 2013 by more than 30,000 NUMSA members
at major auto makers cost the industry around $2 billion.
NUMSA will also picket Eskom headquarters on Wednesday to
press for wage increases. Eskom supplies almost all the
electricity for Africa's most developed economy and is deemed an
essential service, making strikes illegal.
But NUMSA General Secretary Irvin Jim hinted at the weekend
that workers might defy the ban, saying the union might have "no
option but to allow our members to liberate themselves".
Other companies that could be affected include Africa's
biggest packaging firm, Nampak, electrical cables maker
Reunert and unlisted steel maker Scaw Metals.
Scaw, one of South Africa's biggest steel makers, said no
production was taking place at its plants.
"We are talking about probably 80 percent of employees not
reporting for work," said head of human resources Bheka Khumalo.
The strike could result in revenue losses of about 33
million rand ($3.1 million) a week and 20,000 tonnes of output
losses, Khumalo added.
The rand was slightly weaker while the share prices
of companies affected had moved little in afternoon trade.
NUMSA, once a political ally of the ruling African National
Congress, fell out with President Jacob Zuma's government over
policy last year, limiting its ability to mediate.
($1 = 10.6645 South African Rand)
(Additional reporting by Wendell Roelf in Cape Town; Editing by