The Automotive Manufacturing sector (AMEO) and the National Union for Metalworkers of SA (NUMSA) have agreed to sign a wage deal to ensure no disruptions to vehicle manufacturing is SA for at least 3 years.

The agreement has already been signed by AMEO and will be signed by NUMSA following a meeting of the National Executive Committee.

The agreement, which will be in force until 2019, includes numerous measures that will be taken to ensure vehicle manufacturing at the 7 manufacturers locally will continue smoothly. This makes for a more stable investing environment in SA.

Plans include on-site housing at the manufacturing plants, as well as fair wages towards hourly-paid factory workers.

“This agreement is testament to the value of proactive negotiations between AMEO and NUMSA,” says Mike Whitfield, CEO of Nissan South Africa and President of the National Association of Automobile Manufacturers of South Africa (Naamsa).

“Formal negotiations were preceded by several consultative industry indabas and a fact finding mission to the Australian automotive industry by Naamsa, NUMSA, the Department of Trade and Industry, the Department of Labour and others. The preparations also started earlier this year, giving both parties ample time to prepare and consult their constituents,” says Whitfield.

This agreement comes at a very unsure time in the local motoring industry, as new car sales have recently declined drastically.

This is concerning, especially if one takes Australia into account. They were once a large vehicle manufacturer, but have seen all of its vehicle manufacturers close up shop, or preparing to do so, in recent years.

Says Nico Vermeulen, Executive Director of Naamsa: “The importance of the automotive manufacturing sector in South Africa cannot be overstated. Apart from being the largest manufacturing sector in the country, the broader industry also contributes over 7,5% of the country’s gross domestic product (GDP) and an estimated 3.4% of the national wage bill. The automotive manufacturing sector is recognised as one of the best paying formal employers in South Africa and it remains an important driver in the development of the South African economy.”

“The new wage agreement gives us a platform on which we can plan further investment in the sector and it sends a clear signal to our international parent companies of our serious intent to nurture and grow the automotive manufacturing industry in South Africa,” says Whitfield.

This comes as promising news in a time where economic guarantees are few and far between.