JOHANNESBURG (Bloomberg) -- Wage talks to end an indefinite strike by more than 220,000 metalworkers in South Africa failed Thursday as the stoppage forced General Motors Co. to halt output at its vehicle-assembly plant.
The National Union of Metalworkers of South Africa rejected an improved offer from the Steel and Engineering Industries Federation of Southern Africa, the employer group said in an e-mailed statement today. The strike that began on July 1 has been marred by violence and prompted Moody’s Investors Service to warn that the country’s credit rating may be at risk.
Seifsa, as the employers’ group is known, said its offer to raise wages for the lowest-paid workers by 10 percent this year was the best it could make and it was “deeply disappointed” that it wasn’t accepted by the union.
General Motors shut its plant in the eastern coastal city of Port Elizabeth as “the strike in the metal and engineering sector has impacted upon supply of components to our production line,” Gishma Johnson, the company’s spokeswoman, said in an e-mailed statement.
GM plans to build 50,000 vehicles a year in South Africa. “We can’t tell for now if this will be reached because we don’t know how long the strike will continue,” Johnson said. The assembly of light commercial autos such as Isuzu trucks and Chevrolet utility vehicles is affected by the stoppage, she said.
Meanwhile, Toyota Motor Corp. said on Friday it was "business as usual" in South Africa despite the strike.
"We still have full production capacity," Toyota spokeswoman Mary Willemse told Reuters.
The nationwide stoppage follows a five-month strike by more than 70,000 platinum miners that caused South Africa’s economy to contract in the first quarter of the year.
Police used rubber bullets to disperse 400 to 500 protesting workers at a power plant in Limpopo province on Thursday. Some factories in Johannesburg were vandalized by strikers, the Star newspaper reported.
“Everything is quiet” at the Medpupi and Kusile sites in terms of police activity, Eskom spokesman Andrew Etzinger said by phone. “The NUMSA affiliated workers are staying away. It does have an impact on the construction,” he said.
NUMSA on Thursday denied allegations that its members were involved in violence, saying in a statement that the reports are “part of a cheap ploy by the employers to undermine the integrity of our struggle for a living wage and improved conditions of employment.”
Union spokesman Castro Ngobese declined to immediately comment on the talks when contacted by phone on Friday. The union is demanding wage increase of 12 percent and for labor brokers to be banned.
Labor Minister Mildred Oliphant planned to meet with the parties Friday.
Reuters contributed to this report.