Reports suggesting that German automaker VW is planning to shut down operations at its Kariega plant have some calling on President Cyril Ramaphosa to act as a matter of national crisis.
The Chairperson of the Select Committee on Economic Development and Trade, Sonja Boshoff, said South Africa cannot afford daily industrial decline, job losses, and factory closures.
“The report that the Volkswagen Kariega plant in the Eastern Cape faces closure if the Government does not urgently implement critical industrial policy is alarming,” she said. “The President must act.”
Her comments came after Martina Biene, the Volkswagen Group Africa chairwoman, wrote to President Ramaphosa herself, calling on him to safeguard the local automotive industry.
VW is a crucial part of the local automotive sector, and has warned that uncertainty and delay in government decision-making are pushing its Kariega facility to a crossroads.
Boshoff added that without swift policy certainty, there is a major possibility that the factory would close, leading to major job losses.
“We do not need to get on such a drastic and slippery road. Our economy is too delicate and stagnant,” she added.
The Kariega plant has been at the centre of the Eastern Cape’s economy for decades, acting as a major provider of manufacturing jobs, while boosting the province’s export numbers.
“Its success has demonstrated the value of South Africa’s automotive sector as an engine of industrialisation and economic participation,” said Boshoff.
“Yet today, the very absence of decisive leadership jeopardises investment, supplier confidence, and the livelihoods of thousands.”
She warned that the government cannot sit idly by while VW considers shutting its doors, adding that South Africa’s unemployment levels are already unacceptably high.
“Further closures would deepen economic hardship and accelerate de-industrialisation trends that have damaged other sectors.”
To combat this, Boshoff called on the president, as well as Minister of Trade, Industry and Competition, Parks Tau, to engage with VW and other industry leaders sooner rather than later.
“It would be preferable if the government would finalise the critical industrial policy decisions without delays,” she said
“The South African government must demonstrate leadership now, not in months or years, before further closures and job losses become unavoidable.”
South Africa’s future manufacturing, as well as the employment of thousands of workers, may depend on the outcome of the government’s policy decisions.
More job losses on the cards
Earlier this year, Chery announced the acquisition of Nissan’s Rosslyn plant in Pretoria, marking the end of local Navara production.
Chery did commit to employing the existing Nissan workforce when it takes over operations at the plant, although that might not include the entire workforce.
“Through this agreement, we’re able to secure employment for the majority of our workforce, thereby also preserving opportunities for our supplier network,” said the president of Nissan Africa, Jordi Vila.
News24 reported that this decision was not welcomed by the National Union of Metalworkers of South Africa (Numsa).
Numsa general secretary Irvin Jim warned that South Africa’s manufacturing capacity is declining and stated that the entire industry is under siege.
“We need a decisive and coordinated state response. We are openly being raided, and there is no sense of urgency,” declared Jim.
Government policy and growing tariff pressures placed a strain on Mercedes-Benz’s local operations last year, forcing the German automaker to consider scaling back its operations.
“It is time to stop the proverbial presses and focus all our attention on this pending disaster,” concluded Boshoff
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