JOHANNESBURG: South African trade union NUMSA said it had reached a deal to end a four-week strike in the auto components sector that has crippled production
It said workers will return to factory floors on Monday.
Union officials told a news conference on Sunday that workers would receive a 10 percent pay increase in the first year of the accord and wage hikes of eight percent in the second and third years covered by the agreement.
The strike in an industry that accounts for 6 percent of GDP is one several this year threatening to hamper growth and further dent investor confidence in Africa’s largest economy.
“The strike was very hard for us,” Irvin Jim, the general secretary of the National Union of Metalworkers of South Africa (NUMSA), told the news conference.
A four-week strike by more than 30,000 workers at major auto makers including BMW, Ford, Nissan and General Motors ended last month and cost the industry $2 billion in lost output.
But as workers on the assembly lines came back to work, tens of thousands of those at suppliers walked out. The auto sector has been a bright spot for the ruling African National Congress (ANC), facing national elections next year.
It has used protectionism to grow the sector and provide relatively well-paying manufacturing jobs in a country where unemployment has been stuck at around 25 percent for years.
But some car makers have been considering how much to invest in South Africa, where wage hikes have not been met by higher productivity and labour relations are ranked as among the world’s worst in the World Economic Forum’s Global Competitiveness Report
Germany’s BMW said last week it was no longer considering expanding production in South Africa because of the labour unrest.
NUMSA leadership dismissed the move as brinkmanship and said the German car maker must seek the union’s approval before trying to increase the size of its operations.