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Fresh workers Strike in South Africa could hurt car manufacturers

Fresh workers Strike in South Africa could hurt car manufacturers

Car manufacturers BMW, Volkswagen AG, Nissan and Mercedes-Benz came into fresh a workers strike that paralyzed the auto industry in South Africa and could hurt the leading car manufacturers operating in a country bedeviled with a series of crippling industrial actions.

Business Standard reported thousands of workers went on strike Thursday in a fresh round of labour unrest that has affected the auto industry in Africa’s leading economy over the past few months.

More than 3,000 transport workers were reported to have taken place in the strike organised by the South African Transport and Allied Workers Union (SATAWU), demanding wage hike of 12 percent over a two-year period.

SATAWU said they took the industrial action after employers rejected the workers’ demand, offering only a 10 percent increase for the next year and eight percent for 2015. The strike has brought the transport to ports to nearly a standstill.

Local vehicle distribution operations at major auto manufacturers were affected by the strike including BMW, Volkswagen AG, Nissan and Mercedes-Benz. Imports of vehicles into the local market were also hurt.

South Africa’s auto industry was hard hit by a persistent strike in August and September. Auto manufacturers suffered a revenue loss of about $2 billion due to the strikes, according to the National Association of Automobile Manufacturers of South Africa.

With the vehicle and automotive component manufacturing sectors accounting for approximately 30 percent of South Africa’s manufacturing output, the strike would inevitably result in a lower economic growth and lower domestic and export production and sales, the association said.