December 2, 2014 / 1:47 PM / 3 years ago

Ford cancels SKF components contract, hits South African jobs

The front grill logo of a Ford F150 pick-up truck is shown in Carlsbad, California November 5, 2014. REUTERS/Mike Blake

JOHANNESBURG (Reuters) - Some 250 jobs at a South African forging company could be cut after U.S. motor company Ford (F.N) canceled a components contract with SKF (SKFb.ST), just weeks after strikes hit car parts manufacturers, a union said on Tuesday.

Auto makers producing in South Africa resumed activity in September after a four-week strike by 220,000 metal-workers that hurt assembly lines of brands including Toyota (7203.T), General Motors (GM.N) and Ford.

Last month, Ford’s regional head said the company would hesitate before making further investments in the continent’s most developed economy because of frequent work stoppages.

South Africa’s S.P. Metal Forgings will discontinue production of two components that it supplied to SKF, the world’s largest bearings maker, after Ford canceled its contract with the Swedish company, said Marius Croucamp, spokesman for the Solidarity union.

Production of the two parts will stop in February, S.P. Metal Forgings said in a letter dated Nov. 28 to employees and seen by Reuters.

“It could be a consequence of the strike,” Croucamp said of the contract’s cancellation.

The South African company declined to comment while Ford was not immediately available for comment.

An SKF spokesperson confirmed the company was a Ford supplier but declined to comment on its “contractual relationship with them”.

Ford sells about 6,000 vehicles a month in South Africa, making it the country’s third-largest supplier behind Toyota and Volkswagen. It also exports vehicles.

Reporting by Helen Nyambura-Mwaura; Editing by Mark Potter

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