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BMW stops production in South Africa as strike begin

News | August 12th, 2010 by 21
BMW-Invests-200-Million-in-Rosslyn-South-Africa-Plant

According to a report by Automotive News, BMW, along with other automakers, have temporarily stopped production at their South African plants due to an employee …

According to a report by Automotive News, BMW, along with other automakers, have temporarily stopped production at their South African plants due to an employee strike. South African autoworkers are seeking wage increases more than triple the inflation rate.

The powerful National Union of Metalworkers of South Africa, which represents 31,000 autoworkers, said it had rejected employers’ offer of a 7 percent increase in the first year and a raise equal to consumer price inflation in the remaining two years.

The union is demanding a 15 percent wage increase, well above inflation, which was at 4.2 percent in July.

National Union of Metalworkers of South Africa (NUMSA) represents seven companies including BMW, Volkswagen, Toyota, Ford, General Motors, Nissan and Daimler.

BMW-Invests-200-Million-in-Rosslyn-South-Africa-Plant

BMW’s Rosslyn plant was also closed and the company hopes the strikes will come to a resolution soon.

“There is no way we can build cars without workers. There is no contingency plan in place,” said Guy Kilfoil, a BMW spokesman in South Africa.

BMWs have been assembled in South Africa since 1968 when Praetor Monteerders’ plant was opened in Rosslyn, near Pretoria. BMW initially bought shares in the company, before fully acquiring it in 1975; in so doing, the company became BMW South Africa, the first wholly owned subsidiary of BMW to be established outside Germany.

Three unique models that BMW Motorsport created for the South African market were the E23 M745i (1983), which used the M88 engine from the BMW M1, the BMW 333i (1986), which added a 6-cylinder 3.2 litre M30 engine to the E30, and the E30 BMW 325is (1989) which was powered by an Alpina-derived 2.7 litre engine.

Unlike U.S. manufacturers, such as Ford and GM, which divested from the country in the 1980s, BMW retained full ownership of its operations in South Africa.

Following the end of apartheid in 1994, and the lowering of import tariffs, BMW South Africa ended local production of the 5-Series and 7-Series, in order to concentrate on production of the 3-Series for the export market. South African–built BMWs are now exported to right hand drive markets including Japan, Australia, New Zealand, the United Kingdom, Malaysia, Singapore, and Hong Kong, as well as Sub-Saharan Africa. Since 1997, BMW South Africa has produced vehicles in left hand drive for export to Taiwan, the United States and Iran, as well as South America.

[Source: Auto News | Wikipedia ]

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  • Giom

    Everybody just wants more for less.

    I understand the need for unions, but lately, it’s more about greed than simple economics.

    • bob

      A sense of entitlement.

  • FreudeKing

    I have been keeping tabs on BMW South Africa, being one of BMW Group’s fully owned subsidiaries as well as South Africa and I can say that these unions in South Africa are one rediculous crowd of people leaded by unskilled and uneducated leaders that don’t even know what is good for themselves as leaders, let alone for the people of their unions. They will go on strike for the sake of doing something annually so that the union members don’t get the feeling that they are paying monthly membership fees for nothing, eventhough the strike will cause the employees three years for them to recoup the “unpaid” strike time. Of course most employees didn’t even think of that point.

    In an economic recession, most employees in developed countries understand the need for stagnation of salaries and even a cut in salaries in order to stop losing their own jobs. Yet, these Africans don’t know anything about recessions. They forever want increases in employment remuneration and low interest rates. These unions are forever comparing the lower level workers’ remuneration with that of the CEO, demanding the CEO be stripped of their million dollar salaries for the benefit of the lower level employees. What they fail to understand is that a CEO is so much more skilled and in such short supply, espcially in third world countries like South Africa.

    What’s worse, specifically in South Africa is that their labour is already expensive and they are one of the lowest in the world in terms of productivity. Those just do not add up together for an attractive destination for a business. In fact, I would seriously consider moving the 3 Series production to places like China (currently producing 3 Series as well) where materials, labour and taxes are all cheaper than in South Africa. BMW would actually benefit if they set up a wholly owned subsidiary there as well.

    I am not sure if BMW in South Africa are doing this, but if I understand it correctly, they could have locked out the entire workforce on a no pay basis and refuse the return of any employees in their plant till the unions accept management’s conditions. I mean, if they are shutting the plant down anyway, why not also make these unions pay their share as well. I am sure the unions do not have enough resources to pay these striking workers for longer than the company can shut down the plant. This is what I would do if I was managing BMW’s South African operations – a complete lock out until unions withdraw their strike. It would just be a pleasure to see the ugly expressions on these union heads’ faces.

  • http://www.facebook.com/chadwick.adams Chadwick Adams

    Well I hope it gets resolved for the workers sake and BMW’s sake. In the end I am just glad that my 335is was built in good ole Bavaria! Yea everyone deserves a decent wage, but c’mon when your working at a BMW factory in South Africa…you doing pretty good.

  • Johanthan

    I live in South Africa, and let me tell you…This country is being run by a bunch of idiots who are still obsessed with the past. There is still “apartheid” in this country, but the rolls have been switched. The very same people who are striking and governing this country, are barberic and sick minded. They are ruining this beautiful place that I shame to call home.

    • FreudeKing

      @Jonathan: That is pretty disguisting. I feel sorry for the white youth residents in South Africa. Why don’t they move to countries like Europe, UK, US, Australia, etc. At least you will not have to be discriminated against, targeted and be attacked. Why stay in a place of chaos where they don’t even want you? It would be easy for you to blend into these countries and have no limitations to your careers.

  • 1mc

    How do they calculate their entitlement to a wage increase by triple the rate of inflation?

    • FreudeKing

      They just made up a number that they thought they would be happy with. It could have been 50% for all they care. These are the type of leaders that Africa have. Why else do you think Africa is so messed up? and to think that they have to beg other countries for aid all the time (i.e.tax moeny of yours and mine)!!!

      • Giom

        @ FreudeKing: True… imagine how we feel… a handfull of people carrying an entire country financially – and hated at the same time…

        To answere your previous post… it’s not that easy for us to leave this country and move where ever we want. Unless you have a huge bank balance, you’re not going to be accepted anywere. Plus, our rand isn’t very strong.

        I will say this tho… it isn’t as bad as you might think… SA has some great assets (how ever long they will last…?), but most ppl here just want to live in harmony.

        Pity about the rest…

  • Bmw Fan

    Wow, I cannot believe what I am reading here. This is disgusting!! Its one thing for a foreigner to make comments like this (they do not know any better, the overseas media has unjustly been unkind to this country) but for South Africans to say these things, that’s very disgusting and sad.

    Let me start off by saying that I’ve always loved reading this BMW blog because I live for BMW Cars, yet I’ve never felt compelled to leave a post. Until now!!

    I do not want to get into the wage disputes because I do not claim to know how much those workers in the automobile factories earn but it is something I’m sure BMW SA and the Unions will be able to sort out. However I can’t that factory workers are some of the better paid employees in this country and unless you see in what horrible conditions the majority of poor South Africans (predominantly black/coloured people) live in, you will not understand why they would ask for such a high percentage increase. Which they are in any case highly unlikely to get as history shows, the Unions normally go in with a high request but very often settle for less.

    I’m not a political advocate nor am I blind to the very problems South Africans (of all races) face on a daily basis and I’m specifically not blind to the short comings of some of the leaders of the country(once again, white and black) but for a “South African” such a FreudeKing who has clearly left(Correct me if I’m wrong) this beautiful country to disrespect this country so, I find offensive, unfound and disgusting. Instead of staying in this country and helping to build this country you chose to leave and I respect your decision, but in my opinion you gave up your right to bad mouth this country the day you set foot on that plane.

    I come from a mixed race family (my Dad was white, my mom is coloured) but I look white, I am skilled and educated. I’m still relatively young(20’s) and was not really affected by “Apartheid”(White domination) but I find it funny how white South Africans so easily want to say lets forget “Apartheid” when they were not the ones disadvantaged by the colour of their skin. Whites could go anywhere, work anywhere and live anywhere they chose to without the fear of being victimised by the government or political system. (Funny how South Africa seemed to be great then hey). Yes to some extent, the young South Africans are now paying for the sins of the past but as one of the previous posts so nicely said, the truth is that the majority of the rich in South Africa are still whites as corporate SA is very much still white managed, I’m in Management, I should know. As mentioned, my dad was white, my mom is coloured and believe me the way they individually grew up was very different and worlds apart. He had the world of opportunities whereas my mom grew up with none(very little) due to the colour of her skin. For decades “apartheid” favoured only one group of people. It’s only been 16 years since all South Africans became free and received equal opportunities and rights, yet we want to say lets forget about the past and move on. Easily said when you went to the best schools, stay in nicest homes, drive nicest cars and have the best jobs ect. Not nearly enough time has gone by to say that we have rectified the wrongs of the past. I do not bitch and moan when I do not get a job and say its due to the colour of my skin(even if maybe it didn’t always count in my favour), instead (as my dad did) I stay in this country and try to make this a better place to live in for all South Africans

    To the foreigners, I want to say please do yourselves a favour and book a ticket and come and have a holiday in South Africa so that you can experience the real South Africa instead of being influenced by what the overseas media has broadcasted. I guarantee you that you will experience some of the most beautiful scenery in the world and be welcomed by a warm and friendly nation. To those ex-South Africans who bad mouth this country, if you have nothing good to say then I suggest you say nothing at all. Bad mouthing this beautiful country is a right you have lost long ago.

    I’m sure BMW SA and its workers will come to an agreement and they will continue making amazing cars. Just my opinion as a proud South African

    • 1Mc

      You have a very righteous tone BMW fan, no doubt fueled by your sense of pride in the good you see in your country. That is a good thing, as there is beauty in all countries and often the media can make any place look disproportionately bad.

      Can I test your righteousness by asking as a South African if you are in favour of the following?

      Equality for gays/lesbians/transgenders etc
      Pro-abortion
      Use of condoms

  • Bmw Fan

    Not sure if this is the right forum to discuss it but I will answer your questions. My intent was however not to come accross as righteous but if I did, I suppose it was fuelled by my pride for my country. I think that there are two sides to all stories and that’s certainly the case for South Africa. With all the bad, there’s also alot of good.

    To answer your questions, I’ve always lived by the motto of live and let live. I cannot speak on behalf of most South Africans but I am in favour of Gay Rights and the use of condoms. I’m abit more devided on abortions. I’m personally not for taking another life but also appreciate that its an individual choice influenced by various factors and circumstances. I would like to believe that it cannot be an easy decision for anyone to make.

    • 1Mc

      Nice answer, and I guess then your earlier tone is well justified. Always nice to see someone show the good side of a country easily demonized by the media.

      Many of us from other countries are too often used to seeing SA as a country full of rampant murder, persecution of minorities and destructive religious superstition. However if the World Cup proved anything it’s that SA is civilised and just needs more time to become more moderate in it’s policies.

  • Giom

    C’mon guys, this is a BMW blog…

    There are other blogs for the kind of issues you’re hung up with. Lets get back to topic.

    • Bmw Fan

      Cool…

  • http://www.facebook.com/profile.php?id=1062205910 Bandile Sam

    Fact: Lack of Education.
    This is my country (SA) i love it though, dnt care what other people say bout it. If only they can build more schools with quality education and teachers.

  • JMP

    you do not need to be a south african to see what is happening in your country. your news is all over the world, especially after your world cup. the fact of the matter is that the workers and their unioins are demanding unrealistic wage increases – i do not care whether you are black or white people in that country. what you are doing to decreasing your competitiveness of your workers and our interest in investing in your country.

    i think if you take the effects of losing foreign investments and the short term gain of this magnitude, how would you feel when BMW close down the production plant in your country and take their next generation 3 series production somewhere else? i think the workers will look back to this day and say, why did they have to be so greedy.

    i also read that strikers stripped a woman who went to work in south africa during this striking period… what do you call people like that? are they even humans? all in all, businesses people are here to do business, they are not here to make sure that every person gets out of their poverty situation. it is the same everywhere in the world. if the unions know better and consider the long term, i don’t think they would insist on their demands. i mean, three times above inflation!!! what makes you suddenly deserve so much?

  • http://www.facebook.com/profile.php?id=1062205910 Bandile Sam

    Thats where corruption comes in JMP, i may be young bt i knw alot about my country, the reason y they include violence in this matter i beacuse the Govenment, its fooling around with them, e.g. if ur a worker, working at a specific government company knowing the exact flow of material, assets, investment deals, shareholder deals, and the annual or monthly profit being very high stakes (Unions official), u would be very excited and intentionly or “mistakenly” spill confidential infomation to the workers, e.g. great amount of salaries, which will make them furious and they (workers) get peanuts, which makes the workers and unions demand wage increases. there is a Middle Man/Invisible Man…

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  • Njabsin

    without even realising it you guys are being so racist aswel theres no such thing as a perfect country im black and live in south africa and i have plenty white friends and the wage increase matter faced by BMW can be faced by anyone including government which are run by black people so dont sit here and claim black people are racist cause we not and were definitely not stupid and this blog is not to discuss these sort of matters

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