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September 16, 2019

AMEO and NUMSA Sign a New Three-year Agreement

The Automotive Manufacturers Employers’ Association (AMEO) has successfully concluded the 2019 National Bargaining Forum negotiations with the National Union of Metalworkers of South Africa (NUMSA) with the signing of a three-year agreement.

The NBF heads of agreement between AMEO and NUMSA was signed on 12 September 2019, but the wage increase will be effected retrospectively from 1 July 2019. This was third time the negotiations were concluded without industrial action.

The agreement binds the manufacturers and workers for the next three years. Hourly associates will receive a 9% increase in the first year, and for the second and third years of the agreement they will receive and increase in line with CPI or 7%, whichever is greater.

In the context of the recent extension of the Automotive and Production and Development Programme (APDP) until 2035, the successful conclusion of wage and conditions-of-employment negotiations for the next three years creates a platform for much-needed stability and policy certainty in the motor industry. The agreement will help the South African based OEMs conduct long-term planning, model allocation and volume planning.

AMEO represents South Africa’s seven automotive manufacturers, namely BMW, Ford, Isuzu, Mercedes-Benz, Nissan, Toyota and Volkswagen. Together, these manufacturers produced 610 854 vehicles in 2018 and exported 351 139 (58%) of that production to 155 countries across the globe.

In addition, the seven AMEO members have jointly forecast a total investment in capital and equipment of R39.4 billion in the five years starting in 2019. Close to R52 billion has been invested since 2010.

The automotive sector contributed R178,8 billion to the fiscus in 2018 through exporting vehicles and components, which ranks it in the top five exporting sectors in the country. In the same year, it contributed 6.9% of the country’s gross domestic product (GDP). The industry employs 87 777 people directly and an additional 380 725 people indirectly in the supply chain, making it a critical industrial employer.