Government’s Automotive and Production Development Programme (APDP) had succeeded in mitigating some effects of the labour action seen in the local automotive industry over the last 12 months, said Metair MD Theo Loock on Monday.

The APDP incentivised volume component and vehicle production, as well as parts localisation. It was set to run to 2020.

The automotive industry last year experienced eight to nine weeks of strikes by members of National Union of Metalworkers of South Africa, as well as an almost five-week strike by the unions in the steel and engineering industries this year.

Metair is a JSE-listed international manufacturer and distributor of automotive products to vehicle manufacturers, and the replacement and aftermarket sectors.

“A constantly destabilised labour environment will have some long-term negative effects,” Loock told Engineering News Online.

“We are very, very fortunate. The APDP has given use a buffer, because the incentives cancelled some of the potential negative effects of the labour environment, but can it continue to do so? I don’t know.”

Loock said he was concerned about “the major destabilising effect of continued labour disruption” on the South African manufacturing industry.

“We can produce more [vehicles and components] in South Africa, if we have a stable automotive industry.”

Loock said it was time for “sense to prevail”, and for South Africa to get back to work.

Labour instability not only curbed current production, but also sent “a warning signal” to the international community about South Africa as a trusted supplier to the global industry.

Some OEMs had halted studies to further increase production on current models in South Africa, or to expand through new model production.

The series of strikes seen over the last 12 months meant that the local automotive industry was constantly “either building forward to put contingencies in place, or catching up on what had been lost”, added Loock.

Metair would spend the period until the end of the year working to stabilise its local manufacturing operation, while also trying to improve manufacturing efficiencies, said Loock.

Continued labour action meant that Metair continued to produce at levels 30% to 40% higher than under normal circumstances.

Earlier this year, Metair had still been catching up on volumes lost during last year’s nine-week strike, but then also had to built additional stock ahead of the steel industries strike this year, as OEMs worked to mitigate the strike’s effect.

This made it difficult to determine what a normal, stable day of production would look like.

National Association of Automobile Manufacturers of South Africa director Nico Vermeulen said on Monday that the combined impact of the strikes seen over the last 12 months, across all economic sectors, had probably reduced South Africa’s gross domestic product by 1% to 1.5%.