NATURALLY, the end of the three-week strike in the automotive manufacturing sector is welcome. However, beyond the simplistic measure of production lost, far more profound and lasting damage has been done to the industry that will take a generation of business people to recover.
It is worth contemplating the numbers, because they are truly chilling when seen from an economic perspective. The National Union of Metalworkers of South Africa (Numsa) strike cost the South African motor industry about 45,000 vehicles, or up to R20bn in potential revenue. This will certainly have a negative effect on South Africa’s gross domestic product (GDP), tax receipts by the fiscus, workers’ pay and, ultimately, industry employment numbers.
However, more lasting damage has been done to South Africa’s image as a destination for investment by foreign automotive firms. For instance, BMW South Africa said on Friday that any proposed expansion at its Rosslyn factory had been "put on hold". It is unclear precisely what BMW meant, and the firm did not comment any further, but given that the 3-Series production operation already runs around the clock, it is not unreasonable to assume that the company was contemplating an entirely new line. That is thousands of jobs that will never materialise.
As Ford Motor Company of South Africa president and CEO Jeff Nemeth noted on Sunday, a strike in such an export-heavy industry is "very, very visible", and it appears possible that BMW — and its putative workers — have already paid the price. South Africa’s motor industry accounts for about 30% of our industrial output and a little less than 5% of GDP. In that context, it is therefore even more alarming that its woes are not over. As Numsa general secretary Irvin Jim announced workers’ return to work, he declared in the same breath that workers in the automotive component manufacturing industry have now downed tools.
Given the global requirements of "just-in-time" operations at automotive factories, South African motor manufacturers will not have large inventories of components. It is therefore unlikely that they will be able to keep their factories running at full capacity much beyond the end of the week if component manufacturers remain on strike.
Caught up in it all here in South Africa, it is easy to forget that, for a foreign principal or customer, the details are not terribly interesting. To them, all that matters is that a BMW 3-Series ordered by a US dealer, for example, and already sold to an excited customer, has not been built, let alone put on a boat bound for the US.
Given the opportunities the strike has robbed us of, it is crucial that the country’s elected representatives step up to the task of governing for the benefit of the nation as a whole, especially as it is clear that Numsa’s militancy is motivated as much by ructions within the ruling alliance — specifically its stand against the National Development Plan (NDP) and anger over the suspension of Congress of South African Trade Unions general secretary Zwelinzima Vavi — as by shop-floor issues. It is indisputable that the working class in South Africa faces serious challenges, but without investment into the economy, that working class will remain a minority of the population.
Political paralysis is hardly unique to South Africa, as our friends in the US and the UK have recently demonstrated. But even if we are to resign ourselves to being considered collateral damage in a grubby political skirmish, it is critical to our future prosperity as a nation that we insist that the political class stand up to the entitlement culture of the already-employed minority, and hold the ground for those who do not enjoy the privilege of jobs.
If the government can hold its ground on the NDP, despite such damaging labour militancy, then perhaps it will all have been worth it.