Motor trade deficit soarsAlarm bells are ringing in the auto and motor sector over the R30 billion per year trade deficit in the sector. Out of every two cars sold, one is imported while the other is manufactured inside the country. Even though the export of cars and components has increased this has not been nearly enough to offset the increase in imported cars and components coming into the country. Even as experts recommend that more incentives should be introduced to force car manufacturers in this country to increase the local content of vehicles, Mexico has taken China to the World Trade Organisation (WTO). Mexico says that China is breaking WTO rules when it gives incentives to vehicle manufacturers for increasing the local content.

Plan to expand the training of artisans, engineers and techniciansThe Merseta, Seifsa, trade unions and the department of labour are busy drawing up plans to accelerate the training of artisans, engineers and technicians. In terms of the plan:

15 large steel and engineering employers will indenture 650 apprentices over and above their current training needs.
15 large motor retail and component employers will be identified to indenture 650 apprentices.

This plan will result in the training of between 1 500 and 2 000 apprentices per year in both the engineering and motor retail and component sectors reaching a target of 6 000 by 2010. Trainees will be taken from FET colleges with at least 20% of those trained coming from within the current workforce. Workers from the current workforce will be identified through recognition of prior learning.

Motor recruitment put on high alertNumsa’s motor sector coordinator, Sam Tsiane, has drawn up a plan to recruit more motor members.This is after the Minister of Labour threatened to refuse to extend the agreement to non-parties when the last agreement was signed because of the low membership of trade unions by workers in the sector.

Since then the sector has employed more workers making the trade unions even more unrepresentative! These are the statistics for the beginning of December 2006 where union membership represented just 34% of the total workforce in the motor sector. The most poorly organised region is KZN followed by Sedibeng and Hlanganani.

With a target to reach of 1750 new members per month, KZN has the biggest challenge – that’s 88 new members for each working day (but only 11 new members per local per day!)! To reach a target of 40% representivity by the end of August 2007 it means we must recruit 14 300 new members. You have been warned – you have five months to go out and recruit before the agreement expires at the end of August!

Region

Misa/Samu membership

Numsa member-ship

Non-union workers

Total workforce

% organised

Target to reach 50% organised

1. KZN

2559

8790

28851

40200

28%

8751 (1750 per month)

2. Sedibeng

1402

1169

6749

9320

28%

2089 (417 per month)

3. Hlanganani

4543

6467

24964

35974

30%

6977 (1395 per month)

4. Ekurhuleni

3357

3999

16268

23624

31%

4456 (891 per month)

5. Wits CW

6233

7174

27419

40826

33%

7006 (1401 per month)

6. MP

2117

1992

7483

11592

35%

1687 (337 per month)

7. NC

2667

2580

9215

14462

36%

1984 (396 per month)

8. Eastern Cape

2474

6514

13779

22767

39%

2395 (479 per month)

9. W Cape

4208

8637

16292

29137

44%

1723 (344 per month)

Totals

29560

47322

151020

227902

34%

Wage subsidy – a relief for workers or for employers?Sam Tsiane

President Thabo Mbeki in his State of the Nation address on February 8 this year introduced the concept of a wage subsidy. The immediate expectation from workers was that government would directly supplement their wages.

Following that the Minister of Finance Trevor Manuel confirmed in his Budget Speech that government will introduce a wage subsidy for low income workers. He indicated that this was a matter for further discussion at Nedlac unlike Gear which was imposed on us.The issue is spelt out in more detail in a document released by the Finance Minister called “Social Security and Retirement Reform”.The main thrust of the paper is to ensure that there are enough savings for retirement for people reaching retirement age.

The key elements in the proposal are as follows:

wage subsidy: Government will subsidise social security contributions for low wage workers. This means companies may get tax exemptions for paying for pension, medical, death and disability. The targeted group will be workers who earn less than R4 000 per month.
compulsory membership in a national social security system for those who are earning more than R4000. This means that the government will establish a fund which may cover all workers which will provide social security benefits.
additional compulsory membership to a second scheme or fund for workers earning above a certain amount. Stakeholders may have to agree on the threshold.
supplementary voluntary savings – individual workers will have to choose how they allocate it. It can be with an ordinary savings account, retirement annuity or a defined benefit contribution.

The compulsory and additional fund will be enforced through legislation and the voluntary supplementary will be forced through the tax system. The immediate target is retirement, disability and death. However in the medium term it is to establish a comprehensive social security system that will include medical aid and unemployment insurance. What does it mean to Numsa members in the engineering and motor sectors who already have industry funds? The chances are that they will be expected to contribute towards the national compulsory scheme.