Friday, October 4, 2013

Baby Come Back..South Africa's Reputation is at Stake

Nearly 40,000 South African auto workers are on strike.  The workers walked out a month ago and are demanding higher wages.  As a result, auto components from air conditioners to radiators are not being produced,  resulting in auto makers losing millions of dollars a day and fewer cars being rolled off the line.  Some auto makers are rethinking their expansion plans in the country.  This is not good for South Africa, who has positioned itself as the springboard to reach Africa's growing middle class.  According to the article, "unions say workers are still underpaid and more needs to be done to make  up for the decades of harm done by white minority rule, before South Africa became a multiracial democracy in 1994."  This statement begs the question- are the auto workers really underpaid compared to other manufacturing workers in the country or are the workers being greedy and using Apartheid as an excuse to demand more money?  Apartheid was terrible and tragic and I know I can not possibly understand the damage- emotionally, physically, psychologically- I can not.  However, I CAN understand that if this does not come to an end soon that it is highly likely that auto manufacturers will skip over South Africa when looking for new locations to set up shop.  Why bother, right?  In fact, BMW announced that it passed South Africa over for a new, unannounced vehicle line, since the country can not be counted on to deliver cars on time. In addition, the already high unemployment rate could grow even higher if auto manufacturers decide to move their manufacturing facilities elsewhere.  If the workers are being paid too low of a wage then yes, give them a raise.  The article does not actually address that though it does mention that manufacturing workers in the country make about 12,975 rand a month, which equals $1,295 a month USD.  In 2012, pay raises ranging from 10 - 22%  were awarded to a group of miners after strikes dragged on for months on end- some ending in violence.  The article suggests these pay raises to the miners have resulted in higher pay demands "rippling across South African industries."  Workers in other industries- platinum mining and brewing have followed suit.  Maybe this is contagious. 

The unemployment rate is high in South Africa, 25%. The International Monetary Fund warned this week that this is not the right path toward job creation.  

Let's get back to work.   If only it were that simple.

Full Article:  Strikes Spread to South Africa's Auto Industry

1 comment: