Strike ends in car industry

"Following ratification by employees at plant level yesterday (Thursday), an agreement detailing the terms of the settlement was signed in Port Elizabeth to this effect earlier today (Friday)," Ameo said in a statement.

The industrial action at automotive companies with vehicle manufacturing operations in South Africa began on August 11.

The three-year agreement provided for an across-the-board wage increase of 10% in 2010 and a 9% increase in both
2011 and 2012.

Most of the provisions contained within the prior agreement signed in 2007 had been carried over.

Ameo said the parties had agreed that the use of labour brokers would be discontinued with effect from January 1 2011 in respect of the bargaining unit, with the sole exception of pre-existing labour broker contracts which would be allowed to run their course.

The parties also committed to the establishment of a statutory bargaining council.

"Both the immediate and longer-term impact of the strike is cause for concern," Ameo said.

"In the short term, the loss of approximately 17 000 units will be difficult to recover and has undoubtedly had a negative impact on the local manufacturers' ability to meet the needs of both domestic and overseas customers."

In the domestic market this loss of locally produced units would in all likelihood create an opportunity for importers to make
further inroads in the South African market, Ameo said.

"The strike and resultant loss of volume has caused significant reputational damage to the automobile manufacturing industry in South Africa as a stable production location, and this could have repercussions in terms of our ability to attract future investments going forward."

Ameo said that as the parties moved into the implementation phase of the new agreement, the challenge remained to improve competitiveness against ever-increasing global competition.

Numsa spokesperson Castro Ngobese would not confirm the deal immediately, as he said a press conference on the issue would be taking place on Friday noon in Port Elizabeth.