How South Africa can protect jobs in car industry

TECHNOLOGICAL changes in industry have given rise to contending schools of thought about their impact on work and workers. Automation is rapidly deepening and widening, reaching new areas of work. What’s being produced is also changing.

In the automotive manufacturing industry, for example, there is a global shift to vehicles that don’t produce emissions. The ongoing industrial revolution is defined by new work methods, ways of organising production, and advances in technology.

At the one extreme is the view that this is the end of work. This argues that the technological changes will lead to mass unemployment through retrenchments. At the other end are optimists who argue that the changes will increase overall employment. Disrupted jobs will be replaced by others.

There are seven lead firms that

make up the automotive assembly sector in South Africa. Another 430 firms make up the automotive component manufacturing sector.

In 1995, the assembly sector directly employed 38 600 workers who produced 388 442 motor vehicles. Following changes in production technology, work methods and ways of organising and co-ordinating production, the seven lead firms gradually reduced their direct workforce. This went down to 29 926 in 2020.

However, the reduced assembly sector workforce produced more motor vehicles per annum. In 2019, for example, about 30 000 workers produced 631 983 motor vehicles. Units per worker, referring to motor vehicles produced divided by the workforce, were 10.1 in 1995. This productivity indicator reached approximately 21 units per worker in 2019.

The automotive component manufacturing sector increased its direct employment from 60 000 workers in 1995 to 80 000 in 2019 to support increased domestic motor vehicle production and export programmes. This illustrates its employment creating potential, which needs to be harnessed in policy direction. It also shows it will be beneficial to job creation to raise the levels of vehicle assembly localisation substantially, and to deepen and diversify domestic component manufacturing value addition.

The National Union of Metalworkers of SA put this forward in 2021. It followed the union’s rejection of a Green Paper on the advancement of new energy vehicles released by the Department of Trade, Industry and Competition. The Green Paper proposed changes to the way in which components manufactured abroad for new energy vehicles should be handled. It proposed that these components, once imported for assembly in South Africa, should be deemed to have been manufactured domestically.

The proposal sought to make these imported components eligible for industrial policy incentives meant for domestically produced components.

This went against the imperative of employment creation as a key element of social upgrading. In rejecting the paper, the union stressed the importance of securing a just transition in automotive manufacturing.

The transition in the sector involves a shift from CO emitting vehicles to new energy vehicles. These include hybrid, electric, fuel cell electric and hydrogen vehicles.

The union’s action led to the department initiating a research-led inclusive consultative process on the transition to new energy vehicles.

It would be unjust for the transition in automotive manufacturing to occur without two ingredients. Firstly protecting existing employment. And secondly creating additional work to reduce unemployment. This is particularly true given that South Africa is ravaged by an unemployment crisis.

To achieve a just transition, it will be essential to localise and diversify domestic manufacturing value addition in new energy vehicle components. South Africa mustn’t go back to colonial-type assembly of imported components, and adopt strategies that can ruin employment creation in the components manufacturing sector.

The subject of workers’ power is essential to giving this process a direction from labour’s perspective. This is the focus the University of the Witwatersrand-based Southern Centre for Inequality Studies’ Future of Work(ers) Research Group policy dialogue on “Emerging forms of worker power in the digital economy”. | The Conversation