An eight-day strike by thousands of automotive workers in South Africa has been resolved with a deal to raise wages by almost 30 percent over the next three years.
A number of manufacturers were hit by the strikes – including BMW, Daimler, Ford, General Motors, Nissan, Toyota and Volkswagen – which led to lost production of around 17,000 vehicles.
The agreement between metal workers union Numsa and the Automotive Manufacturers Employers Organisation (AMEO) will see employees earning 10 percent extra for the rest of 2010, and an additional nine percent in both 2011 and 2012.
Numsa was initially after a 15 percent increase for workers, which would have been more than triple South Africa’s current 4.2 percent rate of inflation.
A statement released by AMEO said the strike action had tarnished the South African automotive industry.
“The strike and resultant loss of volume has caused significant reputational damage to the automobile manufacturing industry in South Africa as a stable production location and this could have repercussions in terms of our ability to attract future investments going forward,” it read.
South Africa’s automotive industry produces around 420,000 vehicles per year and accounts for up to seven percent of the country’s gross domestic product.
More than 420 jobs were created in the second quarter of 2010, boosting the workforce to 31,784. During the same period, 61,000 jobs were lost across the country, which has an unemployment rate of 25.3 percent.
Workers are set to return to work today after walking off the job on August 11.