GM suspends South African output as striking union spurns offer

Fri Jul 4, 2014 2:26pm EDT
 
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By Ed Stoddard and Wendell Roelf

JOHANNESBURG/CAPE TOWN (Reuters) - General Motors (GM.N: Quote) suspended production at its main South African plant after a strike hit parts supplies, the U.S. automaker said on Friday, becoming the latest victim of relentless labor unrest in Africa's most advanced economy.

Violence erupted on some picket lines, as the wage strike by the National Union of Metalworkers of South Africa (NUMSA) dealt a further blow to an economy damaged by a five-month walkout in the platinum industry that only ended last week.

It will also further unnerve investors, increasingly frustrated by the unremitting labor strife and perceptions that Pretoria is unable, or unwilling, to rein in militant unions.

About 2,000 workers affiliated with the National Union of Mineworkers went on strike at Impala Platinum's IMPJ.J Marula mine on Friday demanding higher wages, in apparent response to the deal secured by rival union AMCU last week.

GM's suspension of output at its plant in the coastal city of Port Elizabeth showed the escalating impact of the walkout, after NUMSA rejected an increased wage offer from the Steel and Engineering Industry Federation of Southern Africa (SEIFSA).

"The plant has been shut since yesterday because of the parts supplier issues," spokeswoman Denise van Huyssteen said.

NUMSA's more than 200,000 members went on strike on Tuesday, a move employers say will cost the economy more than $28 million a day in lost output.

SEIFSA said it offered wage increases of up to 10 percent late on Thursday, revised from 8 percent. The union wants hikes of 12 to 15 percent, more than double the inflation rate.   Continued...

 
Members of the National Union of Metal Workers of South Africa (NUMSA) protest on the streets of Durban July 1, 2014. REUTERS/Rogan Ward