* Workers reached three-year wage deal on Sunday
* Toyota, BMW see full production this week
* Financial impact on automakers still unknown
By Wendell Roelf
CAPE TOWN, Oct 7 BMW said on Monday
the labour situation in South Africa remained "inherently
unstable" and it had no plans to reverse a freeze on expansion,
even after car parts makers ended a four-week strike.
Car makers told Reuters they were hoping to return to full
production later this week, after parts manufacturers agreed to
a three-year wage deal with the National Union of Metalworkers
of South Africa (NUMSA) on Sunday.
The deal gave a breathing space to an industry that accounts
for 6 percent of GDP.
But prolonged labour turmoil has left some firms considering
how much to invest in South Africa and BMW said last week it was
no longer considering expanding production there because of the
"The fact that the strike went on for four weeks is
proof-perfect that the labour environment in South Africa in
inherently unstable," BMW spokesman Guy Kilfoil told Reuters.
"And that's a perception - certainly in our parent company's
mind - that won't change overnight, and certainly not by a
strike ending that should have ended weeks ago," he added.
NUMSA leaders have already dismissed BMW's comments on
freezing expansion as brinkmanship, saying the German car maker
must seek the union's approval before making any major changes
to its operations.
The car parts strike hit as the industry was recovering from
three weeks of industrial action by more than 30,000 workers at
major auto makers including BMW, Ford, Toyota and
Makers estimated that earlier strike cost them $2 billion in
lost output while it was too early to estimate the impact of the
"The extent and the duration of the industrial action this
year has been the worst and longest on record," said the
executive director of the National Association of Automobile
Manufacturers, Nico Vermeulen.
Toyota Motor Corp lost production of 14,889
vehicles during the nearly two months of strikes, said spokesman
"We restart production with today's night shift and hope to
be up to full production later this week," he added.
German automaker BMW aimed to be back to full production by
Friday, after losing production of about 13,000 vehicles during
the strikes, spokesman Kilfoil said.
The ruling African National Congress (ANC) has protected the
auto sector to 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 long complained that 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 Competitiveness Report.
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.
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.
Workers at Anglo American Platinum, the world's top
platinum producer, have been on strike for more than a week in
protest against 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
(Additional reporting by Jon Herskovitz; Writing by David
Dolan; Editing by Andrew Heavens)