34 000 auto jobs on line, bosses tell Mpahlwa
News - Latest
27 February 2009

JOHANNESBURG (Business Report)
- A further 34 000 automotive jobs could be destroyed if the global economic downturn continued unabated, industry leaders told trade and industry minister Mandisi Mpahlwa this week.

This message was conveyed at a crisis meeting with National Association of Automobile Manufacturers of SA (Naamsa) president David Powels and National Association of Automotive Component and Allied Manufacturers (Naacam) president Stewart Jennings.

Ministerial spokesperson Vukani Mde said it was agreed that a joint task team would be set up to work with other stakeholders to decide on an appropriate response to the crisis.

Mde said Mpahlwa would like to emphasise that such a response would be undertaken in line with the principles and timelines agreed recently between the government and its social partners at negotiating chamber Nedlac.

"The process that the department of trade and industry has initiated will be as inclusive as possible, while at the same time remaining mindful of the urgency that the current situation demands," he said.

Jennings described the meeting as constructive and indicated that the minister had been "sympathetic and empathetic".

He said the first meeting of the task team, which would hopefully include representatives of the labour department and the treasury, would take place in the next 10 days.

Jennings said the automotive component sector estimated it needed R5 billion in bridging finance to assist members experiencing cash flow problems because of the slump in global vehicle sales.

Jennings said the segment had lost 10 000 jobs since last September and it was "quite possible" that another 10 000 jobs could be lost.

Powels said Naamsa and Naacam had made it very clear to Mpahlwa that the downturn was having an impact on the total industry supply chain.

He said reports that the industry was seeking a corporate rescue package were "nonsense"; the talks were about an industry approach to the crisis.

The industry and the department would work together on three issues: how to make cost-effective credit available as the banks tightened up on lending, how to stimulate demand in the next nine to 12 months and how to handle the people displaced through rationalisation.

"We don't want the de-industrialisation of our manufacturing chain, which is one of the possible unintended consequences of the crisis and what we are trying to avoid," he said.

- Roy Cokayne