Johannesburg - German car manufacturer Volkswagen on Wednesday warned of thousands of job losses at its South African operations if a pay dispute in the motor components industry, at the root of a six-day-old strike, was not resolved "immediately.""We are on the brink of a disaster," David Powels, managing director of Volkswagen in South Africa, said in a statement.
Unless "an immediate solution" to the standoff was found, the loss of export contracts and the resultant loss of jobs at Volkswagen SA would be a reality, he said.
"If we lose our export business contracts, we can take 36,000 cars out of our annual production plan for 2008 and beyond," Powels said.
"If we lose this export business, we will then lose approximately 1,500 jobs at Volkswagen of South Africa. In addition approximately 3,500 employees in the service and component industries could lose their jobs."
Volkswagen employs over 6,000 people at its manufacturing plant in Uitenhage, Eastern Cape province.
The Wolfsburg, Germany-based Volkswagen Group regarded this strike "in an extremely serious light and now has serious reservations about Volkswagen of South Africa playing a meaningful role in the Volkswagen Group worldwide supply chain," Powels added.
The strike, which began on September 12, has had a debilitating effect on international car manufacturers. Their supply of parts began to dry up within 24 hours of the start of the strike.
Some 4,000 Volkswagen production employees were sent home without pay on Thursday and are still awaiting notice to return. Volkswagen said it was losing 500 cars a day in lost production.
The South African plants of DaimlerChrysler, Nissan plants, Ford, Toyota and General Motors have also been affected. Production at DaimlerChrysler's East London plant has also ground to a halt.
Talks over pay between employers and the National Union of Metalworkers of South Africa, which represents 50,000 workers in the car parts and retailing industry, were continuing Wednesday.
The union is looking for a 9-per-cent wage increase, the employers are reportedly offering between 8 and 10 per cent, according to grade.
The strike comes on the back of a recent strike in the tyre industry, which Volkswagen said had set it back millions of rands after it had to ship in tyres by air from Europe.
"The component industry and Numsa need to realize that they are holding thousands of people's livelihoods and the industry's future to ransom," said Powels.
