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Labour will pose hurdles to South Africa auto sector

Monday, March 9, 2015

Subject

South Africa's automobile sector.

Significance

The automotive sector is one of South Africa's largest industries, generating 7% of GDP and 11% of exports -- and is thus a critical foreign exchange earner. The government and vehicle manufacturers aim to increase production to 1.2 million units per year by 2020 (from around 566,000) through an industrial policy initiative, the Automotive Production and Development Programme (APDP).

Impacts

  • A final decision on metalworkers union NUMSA's expulsion from union federation COSATU is likely to be made at a special meeting in July.
  • If this happens, COSATU's role in the auto industry could be maintained by a new affiliate -- the Liberated Metalworkers Union (LIMUSA).
  • However, competition between LIMUSA and NUMSA for members could drive higher wage demands and militant strike action.
  • The fuel levy hike announced in the February budget speech is likely to offset the effect of lower global oil prices on the petrol price.
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