BMW cancels some shifts as Transnet strike drags on, looks at Maputo as alternative

25th May 2010 By: Irma Venter - Creamer Media Senior Deputy Editor

BMW South Africa on Monday cancelled its one production shift, and on Tuesday both shifts, owing to the strike by Transnet workers, now in its third week.

BMW South Africa group communications and public affairs GM Guy Kilfoil said on Tuesday that the Pretoria-based vehicle manufacturer would at 17:00 make a call on whether production would continue on Wednesday.

“We are now dealing with this on a day-to-day basis. We lost production of 125 cars on Monday, and 250 on Tuesday. The strike is now really affecting us.”

Kilfoil said the company, which produced the 3-Series for local and export markets, had anticipated the possible effect of the strike, and had ensured that it had air-freighted in the parts necessary to build the vehicles, as not all the parts were made locally.

However, with the Icelandic volcano, Eyjafjallajokull, flaring up again, the arrival of these parts had now been delayed.

Kilfoil said he would attribute 75% of the production problems to the Transnet strike, and 25% to the volcanic ash delaying flights to and from Europe.

He added that strike was costing BMW South Africa a fair amount of money, as “air freight costs a lot more than sea freight”.

MAPUTO AS AN ALTERNATIVE


BMW South Africa currently exported its vehicles through the Durban port, which belonged to Transnet.

However, the vehicle manufacturer had just completed a second test run through the Maputo harbour, in neighbouring Mozambique.

Kilfoil said there was no detailed business study on this available yet, but added that it was clear that port charges at Maputo were lower than those at Durban.

However, there was still a question mark over whether Maputo was a “reliable option”.

Kilfoil said it had become clear that service and international competitiveness were not Transnet’s first priorities, spurred on by the fact that the parastatal could act as a monopoly.