Jobs boom follows R1bn plan to boost local content at VWSA

UP TO 1000 motor industry jobs could be created in the next nine months in the Eastern Cape following a R1billion investment plan unveiled yesterday by Volkswagen SA and component managers for Uitenhage.

VWSA managing director David Powels said the investments were being taken to “step up to the challenge and opportunity presented by the new automotive production and development programme (APDP) by attracting several key national and international component manufacturers to set up operations in Uitenhage”.

Powels said the R1bn investment came as a result of VWSA challenging components suppliers to “significantly improve processes and productivity levels to both survive and grow in the medium term”.

As a result, five suppliers were already establishing manufacturing facilities in the Nelson Mandela Bay logistics park established by the Coega Development Corporation, adjacent to VW’s Uitenhage factory. A sixth supplier would set up operations at the entrance to the Uitenhage industrial area.

The suppliers are interior plastic components manufacturer Faurecia Interior Systems, metal pressing parts manufacturer Bloxwich Industries, side mirrors and cables manufacturer Flextech, bumper systems manufacturer Rehau Polymer, and headliner and door panels manufacturer Grupo Antolin. Nelson Mandela Bay’s Bel-Essex Engineering was also in the process of constructing a new facility directly opposite the Volkswagen plant.

Volkswagen itself announced earlier this year that it would be investing more than R3bn in its own manufacturing and related activities from this year through to the end of 2010. That investment would also create several hundred jobs, Powels said at the time.

Yesterday, Powels said: “Our company has instituted an unprecedented focus on dramatically increasing manufacturing depth and extent of the local component supplier industry.

“The new APDP presents the opportunity to revolutionise the South African supplier component industry which has a long way to travel before it can claim global competitiveness.

“In terms of cost competitiveness, there’s an approximate 20% gap to manufacturers in Western Europe. The gap widens to more than 30% when comparing domestic automotive manufacturing cost structures to those in emerging automotive power houses such as India, China and Russia. There is only one way in which the automotive manufacturing industry in SA will be able to survive in the medium to long term – by securing much higher levels of local content. This includes the need to introduce new technologies and increase the use of local materials in the domestic component manufacturing industry.”

CDC chief executive Pepi Silinga said the initiative would send a positive message to the auto industry and strengthen the position of the region in the sector. “The positive impact of these developments to the economy of the Eastern Cape will be huge. They will bring dramatic shifts in people’s lives in the metro and in the province far sooner than expected.”

The VWSA announcement comes only days after General Motors in Port Elizabeth announced that it would shed 1000 jobs by the end of year, and Ford, with operations in Port Elizabeth and Pretoria, said it would be shedding 800 jobs.

GM shed more than 400 jobs earlier this year and is now in the process of reducing its head-count by several hundred more, with more cuts planned through to the end of the year.

Source: The Herald, Avusa Group News

One Reply to “Jobs boom follows R1bn plan to boost local content at VWSA”

  1. How about an update on this story.
    Or was this just some hot air blowing from VWSA.
    Take a look at hellopeter.com and you will see that VWSA is failing miserably in the customer satisfaction department.

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