South African carworkers strike ends with new pay deal

  • 20 August 2010
  • From the section Business
South Africa traffic
Image caption Car production in South Africa accounts for a high proportion of the country's economy

An eight-day strike by South African car workers has ended with an agreement on pay.

The Automobile Manufacturers Employers Organisation (Ameo) and the metal workers union, Numsa, signed a new wage agreement on Friday.

The three-year deal will see workers getting a 10% increase this year, and 9% rises during the next two years.

Numsa was asking for a 15% increase, more than three times the country's rate of inflation.

Ameo, whose members include local franchise-holders of Toyota and Volkswagen, said the strike had been highly damaging and had stopped production of some 17,000 vehicles, a loss that it said would be difficult to recover.

A statement from Ameo said longer term effects could also be serious: "The strike and resultant loss of volume has caused significant reputational damage to the automobile manufacturing industry in South Africa as a stable production location and this could have repercussions in terms of our ability to attract future investments going forward."

The industry produces more than 400,000 vehicles a year, most of which is exported to neighbouring African states.

It claims to account for up to 7% of South Africa's gross domestic product (GDP).

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