Job losses rise on GMSA exit | Fin24
  • Ferial Haffajee

    Why Minister of Public Enterprises Pravin Gordhan’s patriotism call to fly SAA flopped.

  • Solly Moeng

    State capture is meant to be over, but we aren't free if its beneficiaries go unpunished.

  • South African Airways

    A business rescue practitioner has been appointed to try and save the struggling flag carrier.


Job losses rise on GMSA exit

Oct 29 2017 06:00
Max Matavire

Johannesburg - The National Union of Metalworkers of South Africa (Numsa) said the effect of the pull-out by General Motors (GM) from South Africa was much more devastating than earlier expected, with close to a thousand workers affected.

Some time after GM announced its exit from the South African market, Numsa, the union which represents workers in the motor industry, carried out a study in the Eastern Cape to find out how workers would be affected. GM South Africa (GMSA) has the biggest operations in that province.

“We can confirm that 550 workers have been retrenched from GM since July. A few retrenchments will be finalised by December, but the majority of workers have already been removed from the production line and are no longer working,” Numsa spokesperson Phakamile Hlubi told City Press in an interview.

“The actual impact is far higher because there are job losses along the value chain as well, so in fact the impact of GM’s decision to disinvest had a far greater impact than on the 550 workers at the plant who were laid off.”

Of those which directly or indirectly did business with GMSA, about 961 workers have already been retrenched. This figure is expected to increase as GMSA winds up business at the end of December.

Numsa’s report makes reference to the name of the company, the product it supplied to GMSA, the number of job losses and the reasons behind these losses.

Some companies retrenched because most of their business was with GMSA, while others retrenched because their business orders with GMSA had decreased. And then there were those companies that completely closed shop as they depended on GMSA for business.

When the report makes reference to “company order book decreased”, that means orders have been decreased as a result of GM’s decision to pull out of South Africa. In other words, there has been a decrease in orders because of GM.

“In the long run that is likely to have an impact on jobs.

“Companies might retrench on the basis that the demand has decreased therefore they no longer need as many workers to do the job,” said Hlubi.

Greg Lennon, general manager of Sentech Industries, which supplied manipulating steel for cross and impact beams to GMSA, this week told City Press in an interview that they were “heavily” affected.

Sentech Industries had to retrench 56 workers because of GMSA’s exit.

“Yes, we do business with GMSA. Its exit had a huge effect on our operations. We had to retrench 56 workers because there was no work for them,” he said.

However, in its report, Numsa said about 76 workers were affected. The company disputes this figure.

Coega Autospray, which used to supply plastic mouldings to GMSA, was auctioned only last week. Also dependent on GMSA for business, the company retrenched 78 workers.

Red Alert had to retrench 33 workers.

“Yes, we had to retrench 33 workers – they have already left us. These figures can increase come December when GMSA actually closes shop,” said company general manager André Coetzee.

A worker with the company – who declined to be named since she is not allowed to speak to the media – confirmed this.

“We expect more retrenchments in December,” she added.

Adcock Capacity supplies catalytic converters to GMSA and had some of its workers placed at GMSA lines. They retrenched 77 workers.

A spokesperson for the companies declined to give more comment, only confirming that they did “a lot of business with GMSA”.

“Yes, we do business with them, but I cannot comment,” he said before hanging up the phone.

Darelle Corkie, sales manager of Mac Steel Trading, also said their operations were affected despite doing business with GMSA indirectly.

“We were affected, but not much. We dealt with them indirectly through the Press shop, and so it was marginal,” Corkie said.

She declined to say how many workers had been affected. However, Numsa’s report says 38 jobs were affected.

The report compiled by Numsa lists 24 companies in the motor industry. Not all of these companies have been affected by GM’s exit as some were suppliers to Volkswagen SA, Mercedes-Benz and Isuzu.

SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.

Read Fin24's top stories trending on Twitter:

gmsa  |  jobs  |  car manufacturers  |  numsa


Read Fin24’s Comments Policy publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Add your comment
Comment 0 characters remaining

Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

What do you think about private healthcare in SA?

Previous results · Suggest a vote