* Workers to return to posts on Monday, union says
* BMW says labour woes mean it will not expand in country
* Rigid labour market hurting economy, analysts say
By Jon Herskovitz
JOHANNESBURG, Oct 6 South African trade union
NUMSA said it had reached a deal to end a four-week strike in
the auto components sector that has crippled production
It said workers will return to factory floors on Monday.
Union officials told a news conference on Sunday that
workers would receive a 10 percent pay increase in the first
year of the accord and wage hikes of eight percent in the second
and third years covered by the agreement.
The strike in an industry that accounts for 6 percent of GDP
is one several this year threatening to hamper growth and
further dent investor confidence in Africa's largest economy.
"The strike was very hard for us," Irvin Jim, the general
secretary of the National Union of Metalworkers of South Africa
(NUMSA), told the news conference.
A four-week strike by more than 30,000 workers at major auto
makers including BMW, Ford, Nissan and General
Motors ended last month and cost the industry $2 billion
in lost output.
But as workers on the assembly lines came back to work, tens
of thousands of those at suppliers walked out.
The auto sector has been a bright spot for the ruling
African National Congress (ANC), facing national elections next
It has used protectionism to grow the sector and provide
relatively well-paying manufacturing jobs in a country where
unemployment has been stuck at around 25 percent for years.
But some car makers have been considering how much to invest
in South Africa, where wage hikes have not been met by higher
productivity and labour relations are ranked as among the
world's worst in the World Economic Forum's Global
Germany's BMW said last week it was no longer
considering expanding production in South Africa because of the
NUMSA leadership dismissed the move as brinkmanship and said
the German car maker must seek the union's approval before
trying to increase the size of its operations.
"The blackmail by BMW is rejected with the contempt it
deserves," Jim said.
Simmering labour unrest in mining and manufacturing has been
sited as a factor by major credit global ratings in the past
year when they downgraded South Africa's rating.
Economists have said a long-standing governing alliance
between the ANC and unions has led to labour-friendly
legislation which has made the jobs market overly rigid and is
eroding the country's competitive edge.
Since 2000, real, after-inflation wages have risen 53
percent, while productivity has fallen by 41 percent, according
to South African government data.
The central bank has been worried about the damage caused by
labour strife that has slowed production in mines and factories,
especially after South Africa's trade shortfall unexpectedly
widened to 19.05 billion rand ($1.90 billion) in August, the
biggest gap in seven months.
The rand has also suffered, losing nearly 19 percent
Workers at Anglo American Platinum, the world's top
platinum producer, have been on strike for more than a week in
protest to planned job cuts the company says it needs to return
its operations to profit.
Amplats has said it is losing an average of 3,100 ounces of
production a day from the strike. Gold producers and unions
agreed to wage hikes of up to 8 percent last month, ending a
A wave a violent strikes in the platinum belt that started
last year slowed production of the major export commodity and
led to the deadliest security incident in the post-apartheid era
when police shot dead 34 strikers last year at Lonmin's Marikana