Publications
Partners
Johannesburg - Four days after the Volkswagen emission scandal broke in the US, Nelson Mandela Bay metro mayor Danny Jordaan visited the global car giant’s Eastern Cape plant and was assured that its more than 4 000 local jobs were safe and that plans for expansion would go ahead.
On Friday, local authorities added their voices to the worldwide scandal and said they would conduct an investigation to assess the compliance of VW vehicles with emissions regulations.
VW SA spokesperson Matt Gennrich told City Press its intended investment of R4.5bn for the Uitenhage plant to build new products would not be affected by the scandal.
Rory Riordan, head of budget and treasury at the metro, said Jordaan visited the plant on Tuesday and was reassured by VW’s management that jobs were safe and it was making things right as far as the scandal was concerned.
“VW is talking about increasing the size of the plant enormously in the short term. While what is happening is not clear, and there are more allegations made than proved, it would seem they have admitted to wrongdoing and are going to patch it up. We have a huge expansion programme in the Eastern Cape and have no fear of losing that.
“We have no fear of losing jobs because VW has told us very clearly we are not going to lose jobs – we’re going to get more. VW is diverting more of its product line to the Eastern Cape, not less of it, which is fantastic,” Riordan said.
On Friday, the National Regulator for Compulsory Specifications (NRCS), a unit of the trade and industry department, said it would work with the departments of environmental affairs and transport to assess any transgressions.
“If vehicles are found to be noncompliant, the NRCS will apply a sanctioning process, which will lead to a recall of the relevant vehicles for correction,” it said.
The NRCS said it would compare implicated vehicle models against those that were approved in the country to determine if there was any manipulation of pollution data. This will be followed by sampling and testing emissions requirements against relevant local standards.
VW admitted to rigging engines to circumvent pollution controls in the US. The crisis wiped about $22bn (R305bn) off its market value, forcing chief executive Martin Winterkorn to resign on Wednesday.
Metalworkers’ union Numsa said the scandal should not affect jobs or the company’s proposed investments in the country.
“We have not received anything from VW that it will be retrenching workers. From where we stand, VW has just announced an investment and remains very firm that it will execute and implement the investment. We will not accept any form of retrenchments at the current moment,” said Numsa general secretary Irvin Jim.
But on the emissions scandal, Jim said: “[VW] has been making money and if it is found that it flouted the rules or the laws, it must pay.
Kobus Gerber of the Nelson Mandela Bay Ratepayers’ Association said it was very concerned about any possible backlash, which could result in job losses or disinvestment in the metro.
“We already know our metro is cash-strapped, and if it was to happen that VW withdraws its planned investment and more jobs are lost, it’s going to be very difficult for the already vulnerable economic situation of the metro.
“This is a concern. I have heard about the scandal, although I have little information, but I am sure VW will handle this with professionalism and dignity,” said Gerber.
Shortly after announcing the R4.5bn investment earlier this month, VW SA managing director Thomas Schäfer told City Press that a drop in demand in new car sales would be compensated for with exports.
“Our great advantage is that we [have] our factory here in Uitenhage. We are [making] 115 000 cars this year. If the domestic demand goes down in total numbers, we will make it up with exports. So we will produce more export cars and send them to the UK, Japan, Australia and other places where the market might be running well.
“We are lucky we don’t have to send people home or make them work fewer hours. Actually, we [are] working overtime at the moment.”
The current Polo range was also being produced for export. About 66 000 four-door Polos are scheduled to be exported to mostly right-hand-drive markets this year – a 21% increase from last year.
“South Africa is not a logical production country for the motor industry, because only 0.6% of the world’s vehicle production is situated here.
“However, due to the strategic location and the potential of Africa as a future market for exports … ongoing investment in our vehicle manufacturing base makes sense,” said Schäfer.
