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VW, GM, Toyota Agree to 10% Pay Raise for South African Workers

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On: Mon, Aug 23, 2010 at 9:42AM | By: Sherry Christiansen


VW, GM, Toyota Agree to 10% Pay Raise for South African Workers

Union members from South African automobile manufacturing plants have reached an agreement, as far as wages go, ending an expensive 8-day strike in Johannesburg. Thousands of autoworkers signed a three-year wage deal that will result in workers getting as much as a 10% pay increase this year and an additional 9% in the next 2 years. The goal for the unions was to get a 15% wage increase, which is over 3 times the country’s current inflation rate.
 

On August 23rd workers are scheduled to return to their jobs, according to the National Union of Metalworkers of South Africa.
The union, representing 31,000 employees in South Africa’s car industry, began the strike on August 11. The union, known as Numsa, was initially asking for a 15 percent raise, more than double the 7 percent the employers offered, although South Africa’s inflation rate was 4.2 percent at the time. “It’s become a trend, not necessarily a good one from an economic point of view, for settlements in the double-digit region, and that’s way above inflation,” Chris Thexton, chairman of the employers’ group, said in a phone interview from Port Elizabeth. “There’s a high premium in this contract. It allows for the industry to get back up and running.”

Many of the world’s largest automakers were affected by the strike, including Volkswagen, Nissan, General Motors, Ford, and Toyota.
The 6-day halt in assembly led to a loss of production of approximately 17,000 vehicles, according to a statement by the employers group. The auto industry, as a whole, represents about 6% of the country’s gross national product, producing over 400,000 vehicles per year.

Workers in several major markets have sought wage increases, feeling they now have leverage after carmakers laid off personnel during the global financial crisis, and are scrambling to hire enough personnel to man assembly floors now that demand has picked up.

About half of South Africa's auto production is exported to other African states, Europe, and North America.




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