Toyota, Ford halt output in South Africa as strike spreads

UPDATED: 7/14/14 10:57 am ET - Mercedes statement added

JOHANNESBURG (Bloomberg) -- Toyota Motor Corp. and Ford Motor Co. are stopping production at South African plants as a two-week strike in the manufacturing industry disrupts the supply of components.

Toyota, the biggest carmaker by exports in Africa's second-biggest economy, will halt production of the Corolla, Hilux and Fortuner models at its Durban plant starting Tuesday, said Mary Willemse, spokeswoman for the Japanese company in South Africa.

The shutdown "is due to the ongoing strike in the metals industry, cutting supply of car components for the models," she said.

Ford halted output at its Silverton plant outside Pretoria on Monday due to the metalworkers strike, spokeswoman Alisea Chetty said.

Mercedes-Benz said on Monday supplies to its South African plant were "critical" due to the strike by engineering workers, although production was still continuing.

"Supply lines are becoming critical due to the National Union of Metalworkers of South Africa strike in the engineering and metals sector," Arno van der Merwe, the head of Mercedes' local unit, said in a statement.

BMW AG is operating on two production shifts instead of three, according to spokesman Guy Kilfoil.

General Motors' Port Elizabeth plant hasn't operated since July 3.

The National Union of Metalworkers of South Africa is intensifying a strike after rejecting the latest offer from employers. About 220,000 workers have downed tools since July 1, affecting more than 12,000 companies.

The union is holding talks with the Steel and Engineering Industries Federation of Southern Africa as the two parties try to resolve differences regarding the duration of a wage agreement, Numsa industry coordinator Stephen Nhlapo said.

Seifsa, as the employers' lobby is known, is seeking a three-year deal while Numsa is asking for a 10 percent pay increase for one year.

Higher wages

"That meeting is still on," Seifsa spokeswoman Ollie Madlala said. "Once they are back from that meeting and there is some sort of an agreement, then I can talk about it."

A Numsa strike for higher wages at carmakers last year resulted in a loss of about 45,000 units in production, according to the National Association of Automobile Manufacturers of South Africa.

That cost the industry about 20 billion rand ($1.9 billion). The value of exports from the automotive industry in South Africa rose 8.2 percent to 103 billion rand in 2013, according to Naamsa.

Reuters contributed to this report.

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