Media reports suggest that the ongoing labor strike in South
Africa is costing the automobile industry almost 3,000 vehicles a
day. Major car manufacturers like
Ford Motor Co.
General Motors Company
Toyota Motor Corporation
Nissan Motor Co. Ltd.
) and Bayerische Motoren Werke AG (BMW) have been affected by the
strike that began on Monday.
Almost 30,000 workers in Pretoria, Durban, Port Elizabeth and
East London are participating in the strike. Toyota and General
Motors witnessed 80% absenteeism.
The strike was called by the National Union of Metalworkers of
South Africa (NUMSA) to demand an increase in wages, better
medical benefits and increased flexibility in shifts. While the
employers are willing to increase wages, they are not accepting
the percentage demanded by the union, which is more than double
the inflation rate forecasted by the South African Reserve Bank
The strike is causing huge losses to the automakers. While
Toyota is losing over 700 cars daily, BMW is losing almost 350
sedans. Nissan's daily output of almost 250 units has also been
However, automobile manufacturers are not the only losers in
this strike. The South African economy will also be affected
significantly as the automobile sector contributes 6%-7% of the
GDP and 12% of the country's exports. Both foreign direct
investment and economic growth will be hampered. This will add to
the problems of the economy, which is already affected by strikes
in the mining sector.
Nissan currently carries a Zacks Rank #1 (Strong Buy). Ford
carries a Zacks Rank #2 (Buy) and General Motors carries a Zacks
Rank #3 (Hold).
FORD MOTOR CO (F): Free Stock Analysis Report
GENERAL MOTORS (GM): Free Stock Analysis
NISSAN ADR (NSANY): Get Free Report
TOYOTA MOTOR CP (TM): Free Stock Analysis
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