Labour stability in South Africa is not a Ford Motor Company of Southern Africa (FMCSA) issue, or even an automotive industry issue, but a “country discussion”, says Ford Motor Company (FMC) Europe, Middle East and Africa president Stephen Odell.

Odell says Ford is closely following evolving labour relations in South Africa, especially as the US manufacturer mulls further investment in assembly capacity in Africa and the Middle East.

Ford, in 2013, restructured its business units, with a new Africa and Middle East division set to report regional results from this year.

Ford is currently determining which vehicles can be built in the region, which products are already built here and which existing and future products could be sold here successfully.

It is no clear-cut decision that any new assembly opportunities will be coming South Africa’s way.

Odell says Ford is being courted by a number of countries looking to attract vehicle assembly to their shores.

He adds that all business planning requires a stable environment. While FMC aims to “pay people fairly”, it also expects the labour force to “manage itself in a predictable way”.

He says it is problematic that the three strikes affecting the South African automotive industry happened one after the other last year, namely at vehicle assemblers and components manufacturers, and in the logistics sector.

It is also “of concern” that the first point of departure for the unions is “dispute, rather than discussion”.

“But this is a South African discussion, not a Ford discussion.”

Odell says FMC will have to take South Africa’s labour situation into account when considering possible additional production opportunities at the FMCSA plant.

He confirms that it is possible to source more vehicles from the FMCSA plant in Silverton, “if we chose to do so”.

“We are determined to be a substantial player in Africa,” he adds.

Next Growth Opportunity
Ford identifies the next growth opportunity for the automotive industry as Africa and the Middle East, says Odell.

South Africa is the second-biggest market for Ford in the region, with Saudi-Arabia number one.

Ford sales in the newly formed region reached 200 000 new vehicles last year, with Ford Middle East and Africa president Jim Benintende expecting it to grow to 220 000 units in 2014.

Within this business unit, FMCSA currently produces the Ranger pick-up for the local and export markets.

FMCSA president and CEO Jeff Nemeth says FMCSA produced around 63 000 Rangers in 2013, a number which is expected to grow by 15% to 20% in 2014.

Around 65% of production is exported, also into Africa.

Ford sales in South Africa increased 40% in 2013 over 2012, and has been up more than 20% for the three months of 2014 over the same period last year.

Nemeth says it is important for FMCSA to continuously improve its competitiveness, productivity and quality, in order to “be top of mind when the [Ford] board made a decision to invest”.

He welcomes the labour indaba scheduled for mid-2014, noting that it could hopefully kick-start a focus on creating “a collaborative environment” between business, labour and government.