Daimler Chrysler’s pull out threats over subsidy infuriates NUMSA

The National Union of Metalworkers of South Africa (NUMSA) has been angered by

reports that Daimler Chrysler is considering to pull out if government failed to offer new

subsidy incentives.

Daimler Chrysler SA chairman Hansgeorg Neifer warned reportedly that it would be

difficult for the European car manufacturer to continue its operations in the country in the

absence of the Motor Industry Development Programme (MIDP).

“We believe Daimler Chrysler SA is making a big issue out of the MIDP when it

encountered a myriad of problems in its mother plant in Germany. It is because of those

problems that they mandated South African management to cut labour and wage costs,

hence the winding down of its Pinetown, Durban plant followed,” Herman Ntlatleng,

NUMSA sector coordinator for auto and tyre manufacturing said.

While the government support programme has given benefits amounting to more than

R55 billion to car manufacturers, these did not result in job creation. And, strangely

enough the most assembly plants introduced automation processes which resulted in

massive job losses when MIDP was put in place, he said.

Other car manufacturers, meanwhile, were extremely cautious in making pronouncement

before the MIDP was reviewed in 2012, but hinged their hopes on government

considering of other alternative incentives compliant with the World Trade Organisation

(WTO) and the General Agreement on Trade and Tariffs (GATT) rules.

BMW SA’s Richard Carter has assured NUMSA that the company has invested huge

amounts of money into local operations to ensure efficiency and that they were highly

competitiveness, knowing very well that the MIDP would not be around for ever.

“It is very unlikely that the government would not consider a range of other incentives

within the bounds of WTO and GATT. These include halving 30% import duties to

ensure there were no jobs lost and to compensate for geographic distance costs, raw

materials and other logistical costs,” Carter said.

Ford SA also indicated that it has contributed plans to review of MIDP to ensure business

was not negatively affected by the phasing out of the programme.

NUMSA is deeply concerned that Daimler Chrysler is drumming up support for other six

car manufacturers to follow suit when it is hiding its problems in Germany.

Mziwakhe Hlangani

NUMSA national information officer

Cell: 0837293374

E-mail address: mziwakheh@numsa.org.za