THOUSANDS of employees were handed an early Easter present yesterday when Volkswagen SA announced a “surprise” multimillion rand export contract had been secured, staving off a planned two- week shutdown at the Uitenhage plant.
VWSA managing director David Powels said that after export orders for the Uitenhage-built Polo had been halved at the start of the year from 40000 to 20000, a German parent company order for an additional 6000 had been confirmed this week.
“We had been planning to close down production during the week before Easter and in the week after the holiday, as both would have been short weeks,” he said yesterday.
“However, the order – valued at between R500-million and R600-million – means that the plant will no longer have to work the short weeks.”
The Easter weekend runs from Friday, April 10, to Monday, April 13.
Powels said the German market was experiencing a “buying down” to smaller cars and that Volkswagen AG – which yesterday reported the best annual sales and profit figures in its 70-year history – had asked Uitenhage to provide the extra vehicles.
Powels said VWSA “were obviously not happy” after the export order was halved “and informed Germany of the significant consequences” of this “in terms of our head count”.
“Those representations, our record of producing world-quality units and our ability to increase volumes helped our case at a time of continuing demand for Polos,” he said.
“It is very good news and enables us to keep the plant running,” said Powels, although adding that the local market was still “very dismal”.
“However, our R3-billion investment to secure the future of our operation is still firmly on track, although some programmes not directly related to product, productivity and quality improvements, and skills training have been delayed,” Powels said.
The process of offering voluntary retrenchment packages to 400 employees was still under way and should be completed next month.
The new export order was hailed by Port Elizabeth Chamber of Commerce and Industry (Percci) chief executive Odwa Mtati as “a very positive development, especially in the current economic climate”.
“We are happy that this will enable employees to continue working, coupled as it is with positive spin-offs for component manufacturers.”
The National Union of Metalworkers of South Africa (Numsa) said “a move in the direction of avoiding further job losses and expanding employment should be welcomed”.
source: THE WEEEND POST