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Cape Town - The auto manufacturing industry in South Africa came to a near standstill on Monday when about 30 000 workers downed tools, adding to the labour woes of the economy which has been hit by violent unrest at its mines.
The stoppage would cost the industry about R600m ($60m) a day in lost production, the National Association Automobile Manufacturers of South Africa (Naamsa) said.
"The strike affects the entire value chain of the industry," Naamsa director Nico Vermeulen said.
Five of the seven companies operating in the auto sector, including Toyota, Ford and General Motors, said production had been halted or affected.
Underpinned by government incentives, the industry contributes at least 6% to gross domestic product and accounts for 12% of exports.
A fresh round of labour unrest will be a political headache for President Jacob Zuma and the ruling African National Congress (ANC) ahead of elections next year.
The strike was called last week by the National Union of Metalworkers of South Africa (Numsa), its largest manufacturing union, which wants pay hikes of 20% for its members, compared with inflation at 5.5%. Companies have offered 6%.
The central bank has warned about the inflationary impact of high wage settlements on consumer prices. But workers are stretched financially and often have several dependents, with the unemployment rate officially at 25%, and at 40%, according to most analysts.
Strikes also loom in the mining sector with unions seeking pay rises of up to 150%, which companies say they can ill afford as metal prices slump.
Mining strikes over the last 18 months have killed more than 60 people, slowed economic growth, hit the rand currency and led to sovereign credit downgrades.
Labour headache for Zuma
Zuma and the ANC have faced heavy criticism for their handling of last year's wave of wildcat strikes in the mines, which also dented growth and alarmed foreign investors.
Elias Kubeka, national motor sector coordinator for Numsa, said the auto industry strike was "very well supported and all of the factories, 100%, are shut down". Meetings between the two sides were scheduled for later on Monday.
Toyota said 80% of its 8 000-strong local workforce had not turned up for work.
Guy Kilfoil, a spokesperson for BMW in South Africa, said the strike was costing it 345 cars a day.
"We work 24 hours, seven days a week. There is no production and there is no plan to make it up," he said.
Wages in the auto sector range from about $850 a month for basic workers to $1 800 a month for qualified technicians.
In the United States, according to the US Bureau of Labour Statistics, the annual average hourly wage in 2012 in vehicle manufacturing was $28.08. Assuming a 40-hour week, this would be close to $4 500 a month.
But worker productivity is constrained by low skills and training, industry experts say.
