The National Union of Metalworkers of SA (Numsa) has signed a three-year above-inflation wage deal with the country’s car manufacturers that saw the union squeezing out a further R10,000 in one-off taxable cash gratuity from their employers.
The union, SA's biggest with a membership of over 400,000, and the Automobile Manufacturers Employers Organisation (Ameo), which represents Toyota Motors SA, Nissan, Isuzu, Ford, VW SA, BMW SA and Mercedes-Benz, signed a pay deal that will see workers getting rises of 8.5% in the first year backdated to July 1.
In the outer years of the deal, workers will get increases of 7% or consumer price inflation, whichever is greater. Ameo spokesperson Andile Dlamini said on Sunday an agreement has been signed.
The increase is above the 6.5% headline inflation rate the Reserve Bank has forecast for 2022, and comes as unions had been demanding inflation-beating increases to cope with the rising cost of living that has seen food, fuel, electricity and transport costs shoot through the roof.
Unions recently marched to the Union Buildings to demand government intervention in the cost of living and socioeconomic challenges facing the working class and the poor.
Numsa general secretary Irvin Jim said in a statement: “It is progressive in that we secured an 8.5% increase in the first year which is an above inflation increase. In the last round (2019 wage negotiations) we secured ATB [across the board], the total quantum of 23% [increase] for three years.”
“Now in 2022, the union managed to secure 22.5% in the post Covid-19 era, and against the poor economic outlook. It is significant that we have maintained the standard for the sake of workers and their families’, when other unions are encouraging members to sign agreements and settle [for] 3%.”
The Numsa-Ameo wage deal, signed at the National Bargaining Forum on Friday afternoon, is valid from July 1 to June 2025 and comes after employers previously offered workers increases of 6.2% in the first year, 5.6% in year two and 4.7% in the final year, but Numsa rejected the offer.
The union argued at the time that the sector could absorb its demand for a one-year 20% wage increase as the sector 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.
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).
Jim said the R10,000 cash gratuity would be paid to employees in the bargaining unit in the next payroll cycle.
The wage deal also focuses on other aspects such as an improving housing subsidy and job grading. “We want to thank our officials at all levels for working extremely hard to negotiate this agreement, particularly because we did not have to resort to strike action to achieve this,” Jim said.
“Numsa keeps demonstrating that it puts workers first and that it is able to negotiate meaningful improvements in wages, benefits and conditions of workers in all sectors. We call on all workers to join Numsa in their numbers, because Numsa puts workers first.”
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