General Motors Co.
) announced the temporary stoppage of production at its Port
Elizabeth assembly plant in South Africa. A strike by the
components suppliers forced the automaker to undertake this
strategy as a last resort.
A strike by 220,000 metal workers turned violent and the police had
to arrest 26 people after reports of several attacks, threats and
damage at factories around Johannesburg. Wage negotiations between
the National Union of Metalworkers of South Africa (Numsa) and the
Steel and Engineering Industries Federation of Southern Africa
(Seifsa) also failed to resolve the issue.
Seifsa offered a 10% hike in payment for the lowest paid workers.
However, Numsa demanded a 12% raise.
Apart from General Motors, Bayerische Motoren Werke
Aktiengesellschaft (BMW) also faced similar challenges and was
compelled to halt production at its plant located outside Pretoria,
effective Jul 1. BMW expects the plant to resume operations from
Jul 8. However, it will be operating in two shifts instead of the
regular three. This will lead to a decrease in production by 120
Other companies affected by this strike include Bell Equipment
Ltd., Evraz Highveld Steel & Vanadium Ltd., units of Murray
& Roberts Holdings Ltd. and Aveng Ltd. together with Eskom
Holdings SOC Ltd.'s Medupi and Kusile power plants.
Separately, General Motors announced that it will be recalling
27,051 Spark mini cars in South Korea. The automaker is recalling
the cars due to faulty transmission mounts. The gearbox mount might
destabilize and lead to a drop in transmission power.
The recalled vehicles were produced in South Korea in the Jun-Dec
2013 period. However, this recall will not affect the vehicles
which were exported to the U.S. and Europe. The automaker plans to
undertake suitable measures to cover this issue in other markets.
There is no report of casualty related to this defect. Previously,
General Motors had recalled 4,848 Spark minis in January.
General Motors currently holds a Zacks Rank #3 (Hold). Some
better-ranked automobile stocks worth considering are
Fox Factory Holding Corp.
Wabash National Corp.
). All of these stocks sport a Zacks Rank #1 (Strong Buy).
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