Employers in the automotive sector have offered unions a multiterm wage agreement for increases of up to 6.2% in the multibillion rand industry, but a pay-hike deal is yet to be hammered out, with more talks scheduled between parties for next week.
The Automobile Manufacturers Employers Organisation (Ameo), the employer body representing the seven original equipment manufacturers (OEMs) of Toyota Motors SA, Nissan, Isuzu, Ford, VW SA, BMW SA and Mercedes-Benz, has proposed increases of 6.2% in the first year, 5.6% in year two and 4.7% in the final year, according to Irvin Jim, general secretary of the National Union of Metalworkers of SA (Numsa).
Ameo confirmed “parties will meet again this month to continue with the negotiations”.
Justified demands
Jim was adamant the sector could absorb the union’s “justified” demand for a one-year 20% wage increase, which is above the 6.5% headline inflation rate the SA Reserve Bank (Sarb) has forecast for 2022.
This was because the sector had received billions of rand in government incentives in 2021 and had performed “extremely well”.
The automotive sector receives financial support from the state for initiatives such as the Automotive Production and Development Programme (APDP), a government incentive scheme aimed at promoting production volumes in the auto sector. Jim said Numsa’s estimate was that in the past year alone, the seven OEMs received a minimum of R30bn in APDP funds.
The automotive industry’s contribution to GDP was 4.9% in 2020, down from 6.4% in 2019, “reflecting the severe impact of Covid-19” on automotive manufacturing and retail as a consequence of lockdown restrictions, according to the National Association of Automobile Manufacturers of SA (Naamsa).
When asked about the exact figure allocated to the OEMs in APDP funds in 2021, Naamsa CEO Mikel Mabasa said, “That information is not made available to us, go to National Treasury.” The Treasury did not respond immediately to a request for comment.
Not asking for much
The demand for inflation-beating increases comes as workers struggle to keep up with the rising cost of living, with increases in the prices of fuel, food, transport and electricity.
“Our demands are motivated by the rising cost of living and the poor socioeconomic conditions that workers find themselves in. In the automotive industry, workers are faced with unprecedented challenges brought about by new technologies and companies imposing challenging working conditions,” said Jim.
“It is important to note that one worker supports a household of approximately five to six extended family members due to the high rate of unemployment. At the same time, the rising cost of fuel and electricity has added to the financial burden of the working class.”
It is outrageous that employers are given inflation-based increases when workers are responsible for making executives extremely wealthy.
— Irvin Jim, general secretary of Numsa
Workers in the sector had not earned an increase in the last two years due to Covid-19 and the shortage of semiconductors, said Jim. “Therefore, when you include all this and the extremely high cost of living, our demands are entirely justified.”
Numsa’s demands come as Toyota SA tries to ramp up production at its Prospecton, Durban, vehicle-assembly plant after catastrophic floods in KwaZulu-Natal submerged parts of the plant in April, affecting the production of high-volume vehicles including the Hilux bakkie, HiAce taxi and Quest and Corolla cars.
About 50% of the Prospecton plant’s total production is exported to 74 countries, including all of Western Europe, the rest of Sub-Saharan Africa and Central America.
Jim said: “It is outrageous that employers are given inflation-based increases when workers are responsible for making executives extremely wealthy. Our members are not asking for much. They went for two years without any increase, and supported the sector with their sweat.”
Numsa spokesperson Phakamile Hlubi-Majola said on Monday that parties had not “moved much” from their positions.
“There are engagements that are happening between ourselves and auto employers. We will be meeting again on August 15, 16 and 17. We will engage in the national bargaining forum. We would prefer to comment after that engagement,” she said.
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