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No plans to reverse expansion freeze - BMW

Cape Town - BMW said on Monday the labour situation in remained "inherently unstable" and it had no plans to reverse a freeze on expansion, even after car parts makers ended a four-week strike.

Car makers told Reuters they were hoping to return to full production later this week, after parts manufacturers agreed to a three-year wage deal with the of (Numsa) on Sunday.

The deal gave a breathing space to an industry that accounts for 6% of gross domestic product.

But prolonged labour turmoil has left some firms considering how much to invest in and BMW said last week it was no longer considering expanding production there because of the labour unrest.

"The fact that the strike went on for four weeks is proof-perfect that the labour environment in in inherently unstable," BMW spokesperson told Reuters.

"And that's a perception - certainly in our parent company's mind - that won't change overnight, and certainly not by a strike ending that should have ended weeks ago," he added.

Numsa leaders have already dismissed BMW's comments on freezing expansion as brinkmanship, saying the German car maker must seek the union's approval before making any major changes to its operations.

The car parts strike hit as the industry was recovering from three weeks of industrial action by more than 30 000 workers at major auto makers including BMW, Ford, Toyota and General Motors.

Strike costs

Makers estimated that earlier strike cost them $2bn in lost output while it was too early to estimate the impact of the latest action.

"The extent and the duration of the industrial action this year has been the worst and longest on record," said the executive director of the , .

Toyota Motor Corp lost production of 14 889 vehicles during the nearly two months of strikes, said spokesperson .

"We restart production with today's night shift and hope to be up to full production later this week," he added.

German automaker BMW aimed to be back to full production by Friday, after losing production of about 13 000 vehicles during the strikes, spokesperson Kilfoil said.

The has protected the auto sector to provide relatively well-paying manufacturing jobs in a country where unemployment has been stuck at around 25% for years.

But some car makers have long complained that wage hikes have not been met by higher productivity and labour relations are ranked as among the world's worst in the 's Global Competitiveness Report.

Economists have said the long-standing alliance between the ANC and unions has led to labour-friendly legislation which has made the jobs market overly rigid and is eroding the country's competitive edge.

The Reserve Bank has been worried about the damage caused by labour strife that has slowed production in mines and factories, especially after 's trade shortfall unexpectedly widened to R19.05bn in August, the biggest gap in seven months.

Workers at Anglo American Platinum, the world's top platinum producer, have been on strike for more than a week in protest against planned job cuts the company says it needs to return its operations to profit.

Amplats has said it is losing an average of 3 100 ounces of production a day from the strike. Gold producers and unions agreed to wage hikes of up to 8% last month, ending a three-day strike.

 
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