Ed Richardson
THE STRIKE in the motor industry has highlighted the need for diversification in the Eastern Cape economy in particular.
DaimlerChrysler sent shockwaves through East London when it warned that it might be forced to move its production of the C-Class Mercedes Benz elsewhere.
The company lost export production of 1000 export units and 1200 vehicles for the local market during the first nine days of the strike.
Spokesperson Annelise van der Laan said "in respect of the recovery of export units, that lost production may have to be shifted elsewhere in the world.
"DCSA is part of DaimlerChrysler's global production network. When a manufacturing plant cannot produce, the global company will try to recover the shortfall at one of its other plants, such as those in Germany or the United States."
Business
boom would
be reversed
The seriousness of the situation has led to DaimlerChrysler taking out full-page advertisements in the local newspapers urging workers and their families to end the strike. However, Van der Laan said any production switch would be temporary and would not signal the end of the export production programme, or DCSA's presence.
This will be good news for the port of East London and for the large number of freight and shipping companies which have set up shop in the city.
Port Authority spokesperson Terry Taylor said the port had managed to cope with a backlog of containers which were being offloaded. A similar, but smaller backlog was being experienced in Port Elizabeth, which handles component imports for Volkswagen South Africa and Gauteng-based manufacturers.
East London was particularly hard hit because of the area's reliance on DaimlerChrysler. There was talk of closing down the port before DaimlerChrysler South Africa won the contract to provide right-hand-drive C-class Mercedes cars to the world market.
However, the new business boom in the city would be reversed if DaimlerChrysler were to scale down operations. Millions have already been lost in unpaid wages and bonuses - the DaimlerChrysler workforce has sacrificed one of the industry's most generous bonus schemes.
East London business people say this has once again highlighted the need for diversification through the development of the West Bank Industrial Development Zone.
Although Port Elizabeth has not been as hard hit by the strike because production has continued at both VWSA and the Delta Motor Corporation, the strike will have created fresh urgency for the Coega development to go ahead and provide a platform for diversification.
National government gave its strongest public support yet for the project during the 50th anniversary celebrations of the Volkswagen Beetle.
Trade and Industry minister Alec Erwin told guests that "government is fully committed and convinced that the Eastern Cape will be the heartland of South Africa's future economy.
Some say we should not build Coega, but we have to have confidence and faith in the future of this region, which has a huge and suitable geological configuration for the type of project envisaged at Coega."
