The National Union of Metalworkers of SA (Numsa), the country’s largest union, says it will soon write to Swedish car manufacturer Volvo Car SA, demanding that it formalise a planned restructuring process that could see the number of dealerships in the country reduced.
Dealerfloor, a motor industry news outfit, quoted Volvo as saying recently: “While we have plans to resize our dealer network locally, Volvo remains fully committed to the SA market. This commitment is evident in the continued investment in electrified mobility and the introduction of new models.”
The local automotive industry, which employs about 120,000 people directly and hundreds of thousands more throughout the SA economy, has been experiencing financial headwinds due to the growing market share of imported brands, particularly Chinese.
With the aid of government subsidies in their own country, these brands are able to undercut, often substantially, the prices of SA-made vehicles. Officially, the industry accounts for about 5% of GDP. About 60% of that comes from vehicle and components manufacturing and 40% from vehicle retail.
Phakamile Hlubi-Majola, national spokesperson for Numsa, which has a membership of more than 450,000, told Business Day on Monday: “All we can say is that we were not formally informed. We will be writing to them to demand that they formalise this process by serving us with section 189 (a Labour Relations Act process dealing with retrenchments). Everything we know right now is based on media reports.”
She said the union was dismayed the restructuring process may result in the “closure of some of its dealerships. Numsa is a recognised union, but it has not been officially notified of Volvo’s plans”.
“In terms of the Labour Relations Act, if a company intends to restructure it must officially notify the unions, by issuing a section 189 notice. This has not happened. Instead, Numsa found out about the plans to restructure in the media.
“Numsa condemns the management of Volvo SA for not respecting the process and causing widespread panic to workers at dealerships. Numsa is demanding that a formal process be followed in order to ensure that the rights of workers are not violated in this process.”
Hlubi-Majola said the union was ready to defend workers and their livelihoods and “we will do whatever is necessary to defend jobs”.
A week ago, Business Day reported that SA carmakers would approach the government to allow local motor companies to convert billions of rand in unused import-duty credits into the cash equivalent to reduce production costs and slash retail prices. This will also counter the flood of low-priced new vehicles entering SA.
There were also talks for trade, industry and competition minister Park Tau to revise SA’s automotive policy. The SA Automotive Masterplan 2021-35 is significantly behind schedule due to Covid-19 and global economic and geopolitical challenges.
Its goals include doubling vehicle production and employment, increasing localisation by 50%, growing the new-vehicle market and deepening industry participation by black-owned companies.
Volvo and Mike Mabasa, CEO of automotive umbrella body, Naamsa, did not immediately respond to requests for comment.
With David Furlonger
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