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Mercedes-Benz facing massive job cuts in South Africa

Mercedes-Benz South Africa (MBSA) has entered into a consultation process for the potential restructuring of its manufacturing operations.

The process will involve discussions around transitioning its East London factory from the current three-shift model to a two-shift model, with as many as 700 jobs hanging in the balance.

A challenging market

MBSA contends that over the past few years, the local automotive industry has been battered by several challenges such as deteriorating macroeconomic conditions and prolonged port delays.

Furthermore, consumer sentiment has suffered as a result of fluctuations in the exchange rate, subdued household income, rising fuel prices, as well as increased energy and logistics costs.

“Against these pressures, we have implemented various measures to address and improve the performance of our manufacturing operations, including cost-saving initiatives and efficiency improvements,” said the company in an official statement on 13 June.

“However, despite our best efforts, the current operating environment remains challenging, necessitating further action to ensure the long-term sustainability of our manufacturing operations.”

Subject to the outcome of the consultation process, MBSA estimates that approximately 700 employees at the East London Manufacturing Plant could potentially be affected by retrenchments and the transition to a two-shift operating model.

The Section 189 consultation process could see the number of workers retrenched through the implementation of early retirement, voluntary severance, and natural attrition measures.

“In close collaboration with key relevant stakeholders, the company wishes to embark on this process responsibly, transparently, with integrity, and empathy whilst ensuring labour stability and continuing manufacturing operations,” it said.

The MBSA factory was inaugurated in 1948 as Car Distributors Assembly Ltd. where it assembled knock-down kits of Mercedes-Benz vehicles.

It is currently responsible for producing the C-Class Sedan for the domestic and export markets.

The factory operates three shifts per day running from 06h00 on Monday to 06h00 on Saturday and over 3,348 workers are on-site, resulting in a capacity to build over 500 units per day.


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