According to Jeff Nemeth, Ford’s regional chief in the country, the company is considering whether to further invest in its South African business as the local operations are disrupted repeatedly because of worker strikes.
Overall, during recent years, the South African auto industry has been plagued by numerous production stoppages, with the business – which accounts for 6% of the overall economy – being hit by four direct or indirect strikes in a period of just 12 months. According to Nemeth, president of Ford’s South African operations, the local executives have been having trouble attracting the interest of the carmaker’s board for additional investments, as “the stability of output is a little less certain than in other countries.”
Just this September automakers in South Africa – which has the most developed economy on the continent – resumed vehicle production after a four-week hiatus caused by 220,000 metalworkers. Back in 2013 a strike triggered by auto employees led to output losses worth $2 billion and the worker action was immediately followed by a strike in the auto parts business and one by truck drivers – the ones that carry the produced cars to ports and local dealerships. Ford is not the only automaker that revised its strategy, with BMW announcing it decided to ax plans for further investments in South Africa.