Max Auto Updates - 12/08/2009

'Strike season' hits carmakers

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A strike is looming at the Ford Motor Company of Southern Africa, the National Union of Metalworkers of SA (Numsa) said on Tuesday.

In a statement, Numsa said it had declared a dispute at Ford's operations in Silverton and had referred this to the Commission for Conciliation, Mediation and Arbitration (CCMA) for intervention.

On August 6 the CCMA awarded the union a certificate to embark on protected strike action.

"This came after a lengthy process in which the union engaged and tried to convince the intransigent Ford management to realise that brutalisation of work, undermining agreements, destroying jobs and eroding worker benefits is a highly dangerous deed," Numsa said.

Outsourcing

The union alleged that Ford had identified "non-core" areas and had embarked on outsourcing.

"The company destroyed quality jobs which it replaced with atypical forms of employment such as fixed-term contracts and labour brokers," the union stated.

It added that affected workers lost their benefits and jobs were placed on the line.

According to Numsa, Ford was guilty of "poor planning and incompetent management."

Numsa said that workers were sent home on numerous occasions on short-time and temporary lay-offs simply because of the shortage of
parts.

Engine plant

The union was now demanding the termination of all labour brokers and subcontractors and an investigation into "incompetence and poor planning" that had led to financial loss on the part of workers after they were unduly laid-off.

Numsa said Ford workers were still on a two weeks short-time/temporary lay-off break.

"Upon returning the union will democratically consult them about the strike."

Numsa said its members in Ford's Port Elizabeth-based engine plant were also disgruntled about short-time and lay-offs and this could lead to a strike there as well.

The Ford Motor Company could not be reached for comment.

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New car market bleeds jobs

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The number of people employed in South Africa's new vehicle manufacturing industry fell in the second quarter of 2009 to a level last seen 22 years ago, the National Association of Automobile Manufacturers (Naamsa) said on Tuesday.

In its quarterly review submitted to the director-general in the department of trade and industry, Naamsa said compared to the 32 392 positions at the end of the first quarter 2009, aggregate industry employment declined by 1 925 jobs during the second quarter
of 2009 to 30 467 jobs.

The magnitude of the extremely difficult operating environment, both characterised by sharply lower domestic new vehicle sales and lower export sales, was illustrated by the decline in headcount of 4 496 jobs during the first half of 2009, compared to a decline for 2008 as a whole of 2 566 jobs, Naamsa said.

"Currently, total industry employment is at levels last witnessed 22 years ago," it said.

Single shift production

Naamsa said manufacturers currently operated predominantly on a single production shift basis, while some operated double shifts in selected areas such as machining, press shops, paint shop operations and body shop.

"During the quarter, most vehicle assembly operations were characterised by a shortened production week," it said.

On a quarterly basis, sales of new cars and light, medium and heavy commercial vehicles registered further sharp declines in the second quarter of 2009 compared to the corresponding three months of 2008.

"The depth and severity of the year-on-year quarterly falls in domestic new vehicle sales remain without precedent in the history of the South African automotive industry and underline the extent of the crisis facing the entire value chain," Naamsa said.

Turning to exports, it said the impact of the global financial and economic crisis and the resulting reduced demand in South Africa's major export markets was reflected in the sharply lower industry new vehicle export sales which, during the first half of 2009, declined by 36.0% in aggregate volume terms.

Extremely difficult year

Looking ahead, Naamsa said 2009 was turning out to be an extremely difficult year for the entire South African automotive industry.

"All sectors of the South African automotive industry - retail, auto parts manufacturing and vehicle production - continue to experience severe and unprecedented viability challenges."

Naamsa said the operating environment in all three sectors of the industry, during the first half of 2009, had deteriorated substantially and was only expected to show modest improvement, domestically, during the second half of the current year and, internationally, once the severe global financial and economic crisis dissipated.

"Improvement in the domestic environment is dependent on a revival in consumer expenditure, lower inflation, aggressive interest rate reductions and fiscal stimulation.

"Internationally, any improvement is dependent on a return of confidence and the stabilisation of financial institutions and markets... this is only likely to occur in 2010," Naamsa said.