GM, Toyota plan to resume production in South Africa

Four-week metalworkers' strike comes to end

JOHANNESBURG (Reuters) -- General Motors and Toyota Motor Corp. plan to resume production on Tuesday in South Africa and the nation's largest union agreed to end a four-week strike in the metals sector after accepting a wage increase offer from employers.

The deal was a welcome relief to the continent's most advanced economy, which has been battered this year by work stoppages.

GM and Toyota both said they would resume full production at their South African operations on Tuesday following the end of the strike, which hit the manufacturers of parts used on their assembly lines.

But confusingly, one of the employers' associations involved in the talks said it did not accept the deal and would lock out workers who had been on strike. Another employers' group said it was happy that the stoppage was over.

Analysts said the contrasting responses of different employers' groups could stoke fresh tensions on the ground.

More than 200,000 members of the National Union of Metalworkers of South Africa (NUMSA) downed tools on July 2 to demand higher wages.

The union said its members would return to work on Tuesday after it accepted a 10 percent annual pay rise fixed for three years for its lowest-paid workers, considerably higher than inflation, which is currently running at 6.6 percent.

The National Employers' Association of South Africa, which represents about 3,000 employers in the metals sector, said after the deal was announced that it regarded the wage increase as excessive.

"We are not happy with the (pay) deal that has been done and will lock out the striking workers from Tuesday," NEASA spokeswoman Sya van der Walt-Potgieter told Reuters.

"NEASA is not a signatory to this agreement because of the unsustainable level of the wage increase being agreed upon."

NEASA represents about 3,000 employers in the metals sector and so tens of thousands of NUMSA members expecting to return to work on Tuesday may find they are unable to do so or discover they do not have a wage agreement.

Another employer grouping, the Steel and Engineering Industries Federation of Southern Africa, which represents about 2,000 employers, said it welcomed the end of the strike.

"(The conflicting responses could) exacerbate tensions on the ground in localized areas as some employers accept returning workers and others don't," said Nomura emerging markets analyst Peter Attard Montalto.

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