Mercedes-Benz South Africa (MBSA) has initiated consultations to restructure operations that could see about 700 employees losing their jobs at its plant in East London.
The carmaker, which produces C-Class sedans for global export, said the consultation process was in accordance with Section 189 of the Labour Relations Act and is in response to pressing economic concerns.
Executive Director of HR and Corporate Affairs, Abey Kgotle, said “the deteriorating economic conditions, logistical hurdles, and weakened consumer sentiment” led to the decision to downscale.
In recent years, the automotive industry has faced several challenges that have directly affected MBSA and its suppliers.
The company says the fluctuations in the exchange rate, low household income, rising fuel prices, and increased energy and logistics costs, have affected consumer sentiment.
In a statement, the East London Manufacturing Plant said the retrenchment of about 700 employees was subject to the outcome of the consultation process.
“The process will involve discussions regarding the proposed restructuring and transitioning from the current 3-shift model to 2-shift operating model, to enhance productivity and efficiency,” Kgotle said.
He assured that they were committed to engaging meaningfully with all relevant stakeholders throughout the consultation process, to responsibly handle the matter with transparency, integrity, and empathy, whilst ensuring labour stability at their manufacturing plant.
“We are sympathetic to the plight of all employees who are potentially affected by this process and the resultant transition,” he said.
Meanwhile, the National Union of Metalworkers expressed its deep concern about workers and families who will be affected if the company goes through with the retrenchments.
Spokesperson Phakamile Hlubi Majola says the Eastern Cape Province where the majority of Mercedes workers are based will be hardest hit due to high levels of poverty and unemployment.
She says they will for for the CCMA to issue dates for the first meeting so that they can consult with the employer in the hope of preventing job losses.
