Strikes risk car industry’s reputation, says VWSA

The reputation of SA’s automotive industry would be destroyed if this year’s collective bargaining resulted in strikes, according to VWSA’s managing director.

Johannesburg - South Africa’s automotive industry was at a crossroads and its international reputation would be completely destroyed if this year’s collective bargaining resulted in strikes like the industry experienced in 2013 and 2010, Volkswagen South Africa (VWSA) managing director Thomas Schäfer said yesterday.

“Do we want to keep the auto industry or not?” Schäfer asked, adding that original equipment manufacturers were now making decisions about export contracts and the allocation of more volume to their plants.

“If we can’t prove we are a reliable partner that can handle labour disputes and so on, we’re in trouble,” he said.

VWSA last year announced it would be investing more than R4.5 billion in South Africa by 2017 to increase the production capacity of its Uitenhage plant by 50 percent for the production of at least two new vehicle models. Schäfer confirmed the Uitenhage plant would be producing the new Polo, but a decision had not yet been taken on any other models.

Increased volumes

He said the investment in the plant would increase the production capacity to 160 000 units a year from 120 000 units now with overtime and production of the new Polo would commence towards the end of next year. He said it should not be a surprise that the Uitenhage plant would be producing the new Polo at significantly increased volumes.

The segment in which the Polo competed makes up 50 percent of passenger car sales in South Africa and the model accounted for 25 percent of the sales in this segment, he said.

Schäfer added that the new Polo was a “completely different car” and was “super complicated” in terms of its shape and the technology in the model. “It’s a big leap from the current shape on the road and we need to get prepared for it.”

Schäfer confirmed that VWSA was still competing with other VW plants for contracts to produce further models at the Uitenhage plant, including the Amarok.

Global demand for the current Polo was enormous and the Uitenhage plant had secured an order for the supply of 10 000 units to Poland, to be delivered in the next four months.

Cost effective

Schäfer said this allocation of additional volume to the plant was because the Uitenhage plant was very cost effective and cheaper than Volkswagen’s Pamplona plant in Spain.

He added that the Uitenhage plant had just won an award as the best pure passenger car plant of the 19 plants in the VW group. This was the first time the Uitenhage plant had won this award in its 65-year history.

Schaefer said this internal award was based on 38 key performance indicators, including cost, quality, warranty, efficiency improvements, labour efficiency, hours per vehicle, health and safety and factory environment. He

said the plant was “completely booked out” until the end of this year.

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