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The National Union of Metalworkers of South Africa (Numsa) has played down Mercedes-Benz South Africa's (MBSA) decision to suspend vehicle production at its East London plant until the end of July.
Numsa General Secretary Irvin Jim said on Monday that other top automotive companies, including Volkswagen and Nissan, have been suspending production.
“Volkswagen suspended production for a month. Nissan has done that [too],” he said. “Mercedes-Benz are now handling their own challenges but we have not been told beyond the period they won’t be coming back [into production].
MBSA told Moneyweb on Monday that an annual shutdown at the East London production plant is standard procedure and it is common cause for production plants to suspend production based on volume adjustments in the production programme.
“MBSA has, of course, kept in close contact with all relevant stakeholders regarding the decision to have a planned non-production period due to production volume adjustments. Suppliers have been consulted.
“Employees of MBSA have also been appraised and will be undertaking a variety of training and upskilling programmes during the period and compensated based on the provisions of the collective bargaining agreements of the National Bargaining Forum (NBF),” the company said.
Volkswagen
Jim’s reference to Volkswagen South Africa relates to its suspending production of the Volkswagen Polo and Polo Vivo at its Kariega plant in the Eastern Cape from 14 April to 12 May to install and upgrade facilities in the plant in preparation for the manufacture of the third vehicle.
This followed Volkswagen Group Africa's announcement in April 2024 that it would invest R4 billion in its Kariega plant, preparing for the manufacture of a third model – a compact sport utility vehicle (SUV) – at the plant from 2027.
It also followed Volkswagen Group Africa's announcement earlier in 2024 that the plant would, from July 2024, become the sole manufacturer and supplier of the Polo for global markets.
‘Training layoff’ for workers
Commenting further on the decision by MBSA to suspend vehicle production, Jim said Numsa is aware that MBSA is engaging in organising a training layoff for their workers during the vehicle production suspension period.
But Jim said Numsa is also “knocking at the door” of the Department of Employment and Labour and the Unemployment Insurance Fund (UIF) “to see whether we cannot have a similar situation for a training layoff scheme for component workers who are affected by this decision”.
Some reports about the suspension of vehicle manufacturing at MBSA’s plant have attributed it partly to the introduction by the United States of a 25% tariff on imported vehicles from April 2025.
MBSA declined to comment on specific questions posed by Moneyweb on this issue and only stated: “We are continuously assessing the impact of the introduced US tariffs.”
Nissan
Jim also confirmed that Numsa has been engaging with Nissan South Africa about reports about the possible closure of its Rosslyn plant.
This follows news wire service Reuters reporting in May that Nissan is considering closing down plants in South Africa, India and Argentina as part of its global turnaround strategy.
Other reports suggest Nissan would be closing down seven of its plants.
Jim said at the time that the union had not received any formal communication or confirmation about the possible closure of Nissan’s South African plant and Numsa was planning to meet Nissan South Africa to get clarity on the situation.
He added that Numsa understands that the Nissan plant closures are anticipated in its 2027 financial year.
Nissan has not yet confirmed which of its plants will be closed as part of its global turnaround strategy.
Jim said on Monday that Nissan’s Rosslyn plant was back in production after a suspension of manufacturing for “maybe three weeks, if not a month”.
He said Numsa has now engaged with Nissan South Africa, which has “a challenge” because of its parent company's restructuring globally.
However, Jim stressed that “the fact that there could be a plant or plants being sacrificed does not necessarily mean that it would be the South African Rosslyn plant”.
“So we are engaging Nissan South Africa about their turnaround plan to deal with their challenges. It is a concern, but we are engaging with them to look at various other options to overcome their challenges.”
This story first appeared on @Moneyweb and is republished with permission.
