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Cape Town – General Motors’ (GM) decision to exit South Africa was a fait accompli and there was nothing government could do to reverse the decision, said Trade and Industry Minister Rob Davies on Tuesday.
Briefing the media ahead of his department’s budget vote speech in Parliament, Davies said GM is repositioning itself and the vehicle manufacturing company is looking at entering the driverless car space and the South African market has become insignificant to them.
GM, which initially started vehicle production in South Africa in 1926, announced plans to sell its manufacturing plant in South Africa to Japanese truckmaker Isuzu Motors as part of a worldwide re-organisation to focus on more profitable businesses.
“We’re of the view that it’s not a generalised trend and GM’s decision takes place against the background of increased investment in the local automotive sector,” Davies said.
READ: Job loss fears as GM pulls out of SA
Davies named a number of “notable investment initiatives” in the last financial year, including a R6.1bn assembly line to produce the Fortuner and Hilux models, as well as multi-billion rand investment from the Beijing Automobile International Corporation in a vehicle manufacturing plant in Coega in the Eastern Cape.
Davies said he is aware of job losses that will follow in light of GM’s exit, which is estimated to be around 500. “But we believe people will be well placed to apply for other jobs following the investment of the Beijing Automobile International Corporation’s investment.”
Black Industrialists Programme gaining momentum
The Department’s Black Industrialist Programme, which seeks to support 100 black industrialists, have already yielded 46 successful projects.
“Our support has allowed these black industrialists to undertake investment projects of R3.7bn and is projected to create more than 8 000 direct jobs and close to 12 000 indirect jobs,” Davies said.
READ: Black industrialists to earn R27bn in construction partnerships
The Department of Trade and Industry brought forward its target of reaching 100 industrialists and expects to reach its milestone by the end of the current financial year.
Progress with broad-based black economic empowerment (B-BBEE)
Davies said the implementation of broad-based black economic empowerment (B-BBEE), including the “trumping clause” will go a long way in addressing economic transformation in the country.
(The trumping clause stipulates that should there be conflict between the B-BBEE Act and any other law the B-BBEE Act will prevail.)
The B-BBEE Commission is now up and running, which will among other things help eradicate fronting,” Davies said.
In the debate on Davies’ budget speech later on Tuesday afternoon Geordin Hill-Lewis, Democratic Alliance spokesperson on trade and industry said black economic empowerment that simply enriches a small group of “well-connected cronies” is harmful because it breeds resentment among black and white South Africans alike.
READ: Mining Charter, BEE a failure - report
He said Davies “has folded to pressure” from powerful lobbyists in the Department of Trade and Industry and those close to President Jacob Zuma, led by Mzwanele Manyi, from the Progressive Professionals Forum. “[These people say] BEE must constantly be tweaked to make it more concentrated in the hands of a few, well-connected cronies,” Hill-Lewis said.
“This is evidenced by the bizarre move to limit the ability of companies to offer shares to the black employees that work in the business,” he added. “If ever there was a perversion of BEE, that was it.”
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