20100820
reuters

JOHANNESBURG (Reuters) - South African automobile manufacturers and a union representing thousands of auto workers reached a deal on wages, ending a costly eight-day strike, employers' body AMEO said.

The Automobile Manufacturers Employers Organisation (AMEO) said it and union Numsa signed a wage agreement on Friday. The three-year deal will see workers getting a 10 percent increase this year, and 9 percent a year in the next two years.

The agreement comes as South African civil servants enter the third day of strikes and their unions plan talks with the government.

The Numsa union was seeking 15 percent wage hikes, more than triple the country's inflation rate. Unions in the car component industries were also threatening to join the action.

The strike led to lost production of about 17,000 vehicles, the group said. South Africa's auto industry, which the industry said accounts for about 6 percent to 7 percent of the country's gross domestic product (GDP), produces about 420,000 vehicles a year.

About half of South Africa's auto production is exported to other African states, Europe and North America.

The strike hit companies including Toyota, Ford, Volkswagen, General Motors , Nissan, BMW and Daimler.

"The strike and resultant loss of volume has caused significant reputational damage to the automobile manufacturing industry in South Africa as a stable production location," the auto group said in a statement.

But the South African action did not stand out in the global context because workers in major markets sought wage hikes, feeling they had leverage after carmakers slashed personnel during the global financial crisis and then scrambled to man assembly floors as demand picked up, analysts said.

A prolonged action could have hurt car exports out of South African with global carmakers filling the void of lost production from the country with vehicles from low-cost production centres, analysts said.