Three weeks after a labor union strike disrupted automobile
production in South Africa, the workers ended the strike
yesterday, according to Bloomberg. Major car manufacturers like
Ford Motor Co.
General Motors Co.
Toyota Motor Corp.
Nissan Motor Co. Ltd.
) and Bayerische Motoren Werke AG (BMW) were affected by the
strike that began on Aug 19.
The strike was called in demand for a wage hike. The National
Union of Metalworkers of South Africa (NUMSA) wanted a 14% hike
in wages while automakers were only offering 10%. However, the
matter has been settled with 11.5%, 10% and 10% hikes in 2013,
2014 and 2015, respectively.
However, while the carworkers are resuming work, gas station
attendants, panelbeaters, car and spare parts dealers and fitment
workshops went on strike today, which should adversely affect the
industry. The three-week strike led to significant losses for
automobile manufacturers as well as the South African economy.
While Toyota lost over 700 cars daily, BMW lost almost 350
sedans. Nissan's daily output of almost 250 units in South Africa
was also affected.
Consequently, the South African economy will 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. In fact the
African Rand has already hit 4-year lows due to the impact of the
strike. This will add to the problems of the South African
economy, which has already received a severe blow owing to the
year-long strikes in the mining sector.
Nissan currently carries a Zacks Rank #1 (Strong Buy), while
Ford and General Motors carry 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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