The National Union of Metalworkers of SA (Numsa), the country’s largest union with more than 400,000 members, has threatened to embark on a strike after reaching a wage deadlock with the country’s seven car manufacturers, which contributed about 5.2% of the country’s GDP in 2024.
It described the above-inflation, multiterm wage offer as an “insult” and a “serious provocation” to its members.
The employers have proposed an increase of 6.5% for the first year and 5% for the following two years, which has been rejected by Numsa. The inflation rate is 3.4%.
The auto sector, which is a significant driver of exports, is facing economic headwinds amid cheaper imports from China and import tariffs imposed by the US.
The original equipment manufacturers (OEMs) including Toyota Motors SA, Nissan, Isuzu, Ford, VW SA, BMW SA and Mercedes-Benz, which are represented by the Automobile Manufacturers Employers Organisation (Ameo), employ more than 30,000 workers.
“At the centre of the deadlock between the parties, where they failed to reach an agreement this past weekend, is the percentage increase that employers must offer to settle this round of negotiations for a period of three years,” Numsa general secretary Irvin Jim said.
“This offer on the table constitutes a serious provocation; it is an insult given that the auto sector is the leading sector in both the auto industry and the manufacturing sector in terms of backward and forward linkages.”
Reasonable and fair increase
Jim said the sector was capable of providing workers with a “reasonable and fair wage increase, even under the current challenges facing the sector. Workers still need to be able to afford transport, electricity, medical aid and a basket of food, he said.
“Employers cannot expect workers to bear the brunt of current socioeconomic conditions. It is a firm Numsa stance that employers in the auto industry must be prepared to provide support for workers whose lives are negatively impacted by inflationary socio-economic conditions.”
Given what he described as the employers’ “intransigent stance” for refusing to revise their offers, Jim said the union now wanted the OEMs to be prepared to open their books so as to compare apples with apples.
Failure by sector bosses to give workers a “a fair and meaningful offer, will leave the union with no choice but to consider signing a one-year agreement with employers. This would mean that the union and employers in the sector would need to negotiate each year”.
“Unfortunately, the unintended consequences of such an arrangement could lead to unnecessary instability in the industry, given that until recently, parties within the sector have not been driven by selfish interests. They used to listen to each other and reach agreements on wages and substantive demands that take care of the interests of both parties, without the employers or the union bargaining in bad faith because of the status of the CPI, whether it is low or high.
“The union might have no choice but to go on strike as a last resort, considering the gravity of such action and its negative effects on the industry, both in the short and long term. The union leadership was very clear ... that a meeting of CEOs and Numsa’s national leadership must be arranged urgently, no later than Tuesday. Such a meeting should do everything possible, with parties willing to move from their positions, to break the current deadlock in the industry and prevent a possible strike,” Jim said.
Vehicle industry at risk
Ameo said the SA auto industry was at a critical crossroads, with global production growth having remained flat over the past decade, and internal combustion engine (ICE) volumes declining as the world transitions “towards new energy vehicles (NEVs)”.
“For SA, where over 60% of vehicle production is exported, this transformation presents both an opportunity and an existential challenge … SA OEMs were currently operating below optimal capacity, with declining domestic sales and fierce competition from imported vehicles, particularly from China and India,” Ameo said in a statement.
It noted that the industry faced tariff risks, supply chain disruptions and the urgent need to transition towards NEV manufacturing to retain export markets and safeguard jobs: “The current offer (6.5% in Year 1, 5% in Year 2, and 5% in Year 3, with a R10,000 once-off gratuity) is both responsible and sustainable. It exceeds inflation projections and reflects our commitment to protecting both jobs and the long-term sustainability of the auto manufacturing sector.”
“[The wage offer] balances competitiveness, affordability and job preservation, avoiding a scenario where excessive wage escalation could trigger retrenchments or reduced investment from global parent companies.”
Ameo remained committed to a fair and sustainable wage settlement that balanced the wellbeing of workers with the long-term survival of the industry. “We urge all stakeholders to act in good faith and avoid outcomes that could jeopardise the livelihoods we all seek to protect.”
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