BMW Cancel South Africa Expansion Plan After Car Strike Causes Drop In Sales

BMW Cancel South Africa Expansion Plan After Car Strike Causes Drop In Sales

From BBC News

BMW has stopped “all future plans” to expand in South Africa after a four-week strike in the car manufacturing industry caused export sales to drop by 75 percent.

It cost the economy $2 billion (£1.2bn), according to the South African Chamber of Commerce and Industry.

BMW told the BBC all plans to increase capacity at its Rosslyn plant had been called to a halt.

A separate strike by car component manufacturing workers is ongoing.

‘Not panicking’

Seven major car manufacturers in South Africa, including Nissan, Ford, General Motors and Mercedes Benz were affected by the protest.

Reports suggest between 30,000 and 40,000 people took part in the strike, with workers demanding a 14 percent pay rise.

But instead car manufacturers offered a 11.5 percent rise, which would decrease to 10 percent in the following two years, which the workers accepted, said a spokesperson for the National Union of Metalworkers for South Africa (NUMSA).

The car manufacturers’ strike finished on 9 September, but the car component industry’s strike is in its seventh week.

Meanwhile, the car component industry workers have been offered a 10% rise followed by an 8% rise in each of the following two years, but the negotiations are ongoing, said NUMSA’s spokesperson.

Bodo Donauer, managing director at BMW South Africa, said the company had been unable to produce 11,000 cars while its workers were striking.

“But more important than these 11,000 cars is the sustainable damage which this [the strike] has made,” Donauer said.

He said the German car maker had been in South Africa for 40 years so had seen “a lot happening”, adding it was “not panicking.”

“But on a very serious note we have stopped all of our future plans to increase capacity in our plant in Rosslyn,” he said.

Read more at BBC News.