A body representing the interests of SA’s automotive industry has called on the country’s biggest trade union to promote the sector’s stability and future sustainability as it prepares to table its wage demands in the multibillion-rand industry.
Andrew Kirby, president of the National Association of Automobile Manufacturers of SA (Naamsa), told delegates attending the national bargaining conference of the National Union of Metalworkers of SA (Numsa), that all stakeholders needed to act in a manner that is “good for the industry” to ensure its sustainability.
The three-day conference by Numsa, with a membership of over 400,000, is aimed at preparing and consolidating wage demands in various economic sectors including automotive, aviation, bus, tyre, motor, Eskom, Road Accident Fund, and infrastructure, among others.
Kirby, who is also president and CEO of Toyota SA, told the conference that the automotive industry had a “mountain to climb”, which he said could be overcome, if parties worked together.
“We are in a high-risk environment at the moment, the danger signs are present [as we] emerge from the long shadow of the pandemic. But there are some solid opportunities for growth and development,” Kirby said.
Naamsa has said the automotive industry’s contribution to GDP was 4.9% in 2020, down from 6.4% achieved in 2019, “reflecting the severe impact of Covid-19” on automotive manufacturing and retail as a consequence of the lockdown restrictions.
Original equipment manufacturers (OEMs) including BMW, Ford, Isuzu, Mercedes-Benz, Nissan, Toyota and Volkswagen (VW) invested R9.2bn into the sector in 2020.
Kirby said the industry experienced one of the “most disruptive periods in our history” due to instability in global supply-chain processes. These pertained to a global shortage of semiconductors caused by Covid-19 and consumer needs for gaming devices.
Kirby said general parts supplies were improving, while semiconductor supplies were expected to improve during the third quarter of 2022, with shipping delays forecast to normalise in 2023.
In vehicle manufacturing semiconductor chips play crucial functions pertaining to sensing, electrification, communication, and safety features.
Kirby said the disruptions over the last two years hurt the economy and 2021 was especially challenging as OEMs lost 20 days of production due to the various levels of lockdown.
“We had a tough environment,” he said. “We need to work together to promote stability and agility for the industry to recover... as we have done in the past.”
The challenges the automotive sector faced in the country, said Kirby, included logistics, infrastructure, reliable energy supply, and civil unrest. “This risk makes it challenges to conduct business in SA. It becomes more expensive to borrow money to fund new investments. If a new company had a choice, they may choose a country where it is easy to do business,” he said.
In July 2021, the civil unrest that swept through Gauteng and KwaZulu-Natal, following former president Jacob Zuma’s incarceration, saw warehouses, vehicle carriers and shopping malls set alight, in a mayhem that cost the economy an estimated R50bn.
Kirby said industry stakeholders needed to work together to attract new technology investments in new energy vehicles (NEVs), hybrid cars and electric batteries. He said the UK, SA’s largest export market, would ban the sales of internal combustion engines from 2030.
The SA outlook, however, was better than expected. “The market is stronger than it was in 2019. It has recovered from the impact of Covid-19. We are forecasting moderate growth over the next three years,” Kirby said.
“The key strategy is to position ourselves to adapt and respond in an agile way. We need to be comfortable with an environment that changes quickly. The SA market is growing, the outlook is positive.”
Industry stakeholders have a “huge responsibility here to create a stable environment for the sustainable future of our sector. Stakeholders need to act in a manner that is good for the industry, and ensure the future is sustainable”.
Parties needed to demonstrate good leadership and take responsibility for long-term benefit of the industry, said Kirby.
“We are at a crossroads. We need to become fit for purpose. We are witnessing the biggest shift in technology. Numsa has a key role to play here... Let’s continue to collaborate and ensure the sustainability of the industry.”
In his opening address, Numsa president Andrew Chirwa said the conference was an important platform to “sharpen our tools as we look set to confront employers in this round of negotiations”.
“We need to relook our strategy to see if it is still fit for the challenge ahead because capital continues to innovate itself.”
Numsa is expected to present its consolidated wage demands in the affected sectors on Tuesday. “Collective bargaining is the lifeblood of any organisation, especially a trade union. It's our core business and it can't be outsourced,” Chirwa said.
“We are not here to prepare for a strike, but for collective bargaining. But if we reach a point where bosses refuse to make an offer to address the plight of workers, we will have no other choice but to mobilise and take bosses on.”
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