The strike, which officially began on July 1, comes after the National Union of Metalworkers of South Africa (NUMSA) turned down a deal from the Steel and Engineering Industries Federation of South Africa (SEIFSA) that offered to raise the wages of NUMSA’s lowest-paid workers by 10 percent.
This has cost General Motors at least three days of production at the plant. “The strike in the metal and engineering sector has impacted upon supply of components to our production line, resulting in our line not being operational since July 3,” GM spokeswoman Denise Van Huyssteen told Reuters. However, Reuters did report that General Motors does have “sufficient inventory for both domestic and export customers for the medium term.”
Nevertheless, the toll of the strike has the potential to upset both the South African economy and General Motors. Bloomberg Businessweek notes that Moody’s Investor Service warned the country last week that its credit rating may be at risk, and that the National Association of Automobile Manufacturers of South Africa (NAAMSA) reported that “a strike over pay at carmakers between August and October last year cost the industry at least 20 billion rand ($1.8 billion) in revenue.”
The union is said to be asking for a pay increase of 12 percent, as well as a ban on the practice of labor brokering.