Industrial action threatens auto industry

There are fresh warnings that the South African motor manufacturing industry could move offshore if unions continue to use the workplace as a battleground for their fights against the ruling party, or if government does not provide the necessary support. It is often pointed out that South Africa accounts for less than one per cent of global auto production – in a scenario where global capacity is around 28 million more units a year than the industry can sell. Two paragraphs in an evaluation of BMW’s global turnaround strategy by SupplierBusiness bring this starkly into focus. Interestingly, in the case of BMW, South Africa is put in the same category as China. The report says BMW’s expansion of its Rosslyn plant in the face of global belt tightening in 2008/2009 “happened because South Africa’s exports are subject to no import tariff to the US, thus allowing BMW interesting savings when shipping vehicles produced in South Africa to the US. “On the other hand Chinese operations, currently running under a joint venture with Brilliance China, will receive greater attention from BMW as it considers making its local plant an export hub for the region. Production output will rise from 37 000 vehicles in 2008 to 64 000 in 2012 for the 3 Series and 5 Series,” it says. And concludes: “The Chinese and South African plants are expected to account for not more than 6.5% of the car maker’s total production by 2013, which, notwithstanding the increased interest by BMW, outlines their minor role in the overall manufacturing plans of the car maker.” This “minor role” status will be of concern to all those shippers and transporters who rely on the motor industry for the bulk of their business.