JOHANNESBURG, South Africa -- South Africa's National Union of Metalworkers said Thursday that its members in car manufacturing plants will go on strike July 26 after the union and manufacturers failed to agree on wage increases.
The strike will be a blow to South Africa's auto manufacturing industry, which has won several export contracts. Auto exports make up some 12.8 percent of the country's total exports.
The union is demanding a 9 percent across-the-board increase while manufacturers are offering 6.5 percent. The country's benchmark inflation rate, targeted by the central bank for monetary policy, is around 4.4 percent.
The union said the strike could be avoided, with the union and the chief executives of the seven auto manufacturers due to meet again next week.
"We are not going to the meeting for a compromise but to reason with them. We'll only call off the strike if they accept our demand," union general secretary Silumko Nondwangu told reporters.
Auto workers traditionally strike in July and have previously forced companies with big export orders to scale down delivery targets or switch part of the production overseas.
"The issue here is not who makes how much money and who does not, but maintaining the competitiveness of this industry. Our wages are already high due to the strengthening rand," said AMEO spokesman Dave Kirby.
He said a protracted strike would hurt the viability of vehicle manufacturing in South Africa.
AMEO members include BMW South Africa, DaimlerChrysler SA, Ford Motor Company of Southern Africa, General Motors South Africa, Nissan South Africa and Volkswagen of South Africa.
Most of these manufacturers have been awarded multibillion-rand export contracts by their parent companies.