FEDUSA Shocked by General Motors Disinvestment
The Federation of Unions of South Africa (FEDUSA) and our affiliate Motor Industry Staff Association (MISA) in the motor retail sector are deeply disturbed by the unilateral announcement of General Motors South Africa (GMSA) yesterday that it was disinvesting from South Africa in a highly negative environment of high unemployment, low growth and the recent downgrading of our country to sub-investment grade or junk by credit rating agencies Standards and Poor and Fitch.
In terms of the notice, GMSA, which first arrived in the country in 1926, has entered into a deal with Japanese car manufacturer Isuzu Motors, through a newly formed subsidiary that will be known as Isuzu Motors South Africa (IMSA) for the purchase of its Struandale factory in Port Elizabeth in the Eastern Cape for an amount that has not been disclosed, putting hundreds of jobs in jeopardy. Martle Keyter, MISA’s Chief Executive for Operations decried that GM’s disinvestment is unfavourable to the South African economy as about 4 million people are dependent on the automotive industry.
The deal will see IMSA manufacturing and selling only 1-tonne Isuzu KB bakkies from next year going forward and halting all imports and local sales of American manufactured Chevrolet cars such as the Chevrolet Spark and Utility bakkies.
However, the government has noted that GMSA was already struggling to achieve the assembly line production targets of 50 000 cars that it needs to be allowed to partake in the government’s automotive production and development programme while Struandale plant has a capacity to manufacture 100 000 cars. More than 1900 workers are affected at the assembly plant of GM, while 134 motor dealerships will be affected in the motor retail sector.
GMSA reinvented itself as the Delta Motor Corporation after disinvesting from South Africa during the apartheid years.
FEDUSA calls on the Minister of Trade and Industry Dr Rob Davis to convene a high-level meeting of social partner leaders in the motor assembly and the motor retail sectors to develop a comprehensive response to protect the jobs and to strengthen motor industry.
According to MISA there are about 124 GM dealerships in South Africa and 34 of them are likely to close down. The dealerships that are part of big corporations such as McCarthy stand a chance to absorbed by them and this will inevitably translate to other employees losing their jobs.
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FEDUSA is the largest politically non-aligned trade union federation in South Africa and represents a diverse membership from a variety of sectors in industry. Seewww.fedusa.org.za for more information.
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