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PE to feel the pain as GM exits

The unexpected exit of General Motors SA (GMSA) from South Africa will cause massive pain and suffering in Nelson Mandela Bay communities.

In addition, the ripple effect on downstream industries will be just as devastating.

GMSA said it was pulling out of South Africa at the end of this year, and its operations would be taken over by Japan’s Isuzu Motors.

This brings the company’s 90-year-old association with Port Elizabeth to an abrupt end, with 600 employees facing possible job losses.

The decision to pull out will also adversely affect numerous social responsibility initiatives which the company has been involved in through its GM Foundation.

These include education, housing and charity projects.

“This is not a time for one to lose one’s job, especially when the country has been declared ‘junk’ status. I am panicking because I don’t know whether I am one of the 600 to lose their jobs,” 54-year-old Mlamli Vellem, who has been with the company for 21 years, told City Press this week.

“I started working for GM in 1996 as a general worker. Now I am a team leader. I have five kids, with the eldest being 29 years old and still living with me. This is going to affect me big time since I am the sole breadwinner.

“Some of my kids are studying through the company’s bursary scheme programme. If I lose my job, this will stop. I have to pay for their fees. Where will I get the money from? It’s going to be tough. The visions my kids have for a better life will be doomed.”

Another employee, 45-year-old Simphiwe Bantam, said: “This is nerve wracking. I don’t know my fate with the company. I don’t know whether I am in or out. It’s difficult times. I have three kids and an extended family. How will we cope?”

The Nelson Mandela Bay Business Chamber, of which GMSA was a member, seems to be optimistic about the deal between GMSA and Isuzu Motors.

The chamber’s deputy president, MC Botha, said that they did not want to speculate about the impact on the economy as there were “still a lot of unknown factors around the deal”.

“While we are saddened that GMSA will cease local manufacturing, we look forward to a greater understanding of the PSA Group’s [Peugeot and Citroen] purchase of Opel/ Vauxhall,” said Botha.

“We welcome the news that the new Isuzu business model intends to have continued manufacturing in Nelson Mandela Bay.”

Botha said the business chamber hoped that all efforts would be made to ensure that Isuzu Motors’ acquisition of GMSA’s operations would have a minimum impact on the local economy.

Others to be affected by this exit are car dealerships and component suppliers.

OPM Tooling, which provides parts for Corsa and Isuzu bakkies, will be hard hit.

OPM Tooling chief executive officer Michael Kliment lamented GM’s departure and said: “GMSA accounts for 25% of my turnover. Nine of my employees are dedicated to GM products, and they are specially trained on high-detail specifications.”

MFA Mould Design & Machining and MFA Global Plastics, which supplies plastic injection mould products to GMSA, said it would have to lay off some of its employees.

The National Union of Metalworkers of SA (Numsa) said it was “angry and shocked”.

“We were not consulted about this move. This unilateral decision by GMSA without giving reasons should be condemned with the contempt it deserves, and we are seeking legal advice,” Numsa general secretary Irvin Jim told City Press this week after addressing more than 400 workers about GMSA’s exit.

“Capitalism has no friends. We want to see the agreement entered into between the two – GMSA and Isuzu Motors. We smell a rat here. These multinationals do not care about the employees. Foreign car manufacturers should not be allowed to sell their vehicles in the country without setting up plant here.”

GMSA’s move will end its social responsibility investments and this will affect its charities, housing and education projects.

GMSA has pumped more than R100 million into social initiatives in Port Elizabeth in the past 20 years.

Company spokesperson Denise van Huyssteen said the foundation would stop supporting these initiatives.

“The foundation was established to develop replicable education and housing models, and as such has never been a grant-making organisation.”

The company’s exit means that about 10 000 housing units planned for Nelson Mandela Bay over the next seven years are now in limbo.

Thomas Matthews, principal of Adolph Schauder Primary School, which was getting assistance from the foundation, this week said: “Their contribution to my school is invaluable.”

However, the William Hunt Group, GMSA’s largest national dealer network, is unfazed.

“We see great opportunities around Opel and we are excited about the possibilities the Isuzu Motors investment will usher in. Isuzu’s three-year plan shows great potential and we foresee an increase in sales volumes going forward,” said its Port Elizabeth general manager, Trevor Villet.

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