CAPE TOWN (Reuters) - Workers downed tools on Monday at the South African unit of Japanese auto maker Toyota (7203.T), the company said, signaling the start of a nationwide strike in the auto sector over wages.
The strike, which could affect over 30,000 assembly line workers, was called last week by the National Union of Metalworkers of South Africa (NUMSA).
South Africa’s auto industry contributes at least 6 percent to the country’s GDP and 12 percent of its total exports. The stoppage is likely to compound the woes of Africa’s largest economy, where unrest in the mining sector has slowed growth.
“All manufacturing and assembly production at the plant are shut down,” said Leo Kok, the spokesman for Toyota, the largest vehicle exporter in South Africa.
Toyota’s manufacturing plant is in the port of Durban and Kok said the company’s national parts centre in central Gauteng province was also affected. More than 80 percent of the company’s workforce of 8,000 was absent on Monday, Kok said.
Auto workers want 20 percent wage hikes, up from an initial demand of 14 percent, well above the central bank’s projected average inflation rate for the year of 5.9 percent.
Major carmakers in South Africa, which also include Ford (F.N), General Motors (GM.N) and Nissan (7201.T), have offered a 6 percent increase during negotiations to replace a three-year wage deal which ended on June 30.
Strikes also loom in South Africa’s mining sector with unions seeking pay hikes that range from 15 to 150 percent, which companies can ill afford as metal prices slump.
A fresh round of labor unrest will be a political headache for President Jacob Zuma and the ruling African National Congress. They have faced criticism for their handling of last year’s wave of violent wildcat strikes in the country’s mines.
More than 50 people were killed in the labor violence, which triggered sovereign credit downgrades.
Reporting by Wendell Roelf; Writing by Ed Stoddard; Editing by Pascal Fletcher