700 Mercedes jobs at risk in South Africa

 ·13 Jun 2024

Mercedes-Benz South Africa Limited (MBSA) has decided to enter a consultation process regarding the restructuring of its manufacturing operations, which could impact 700 jobs at its East London Manufacturing Plant.

This comes as the company is restructuring its manufacturing operations, transitioning from the current 3-shift model to a 2-shift model.

“In recent years, the automotive industry has contended with several challenges which have also impacted MBSA and its suppliers,” said MBSA in an announcement released on 13 June.

Challenges listed include “deteriorating macroeconomic conditions and prolonged port challenges.”

“Overall consumer sentiment has suffered as a result of fluctuations in the exchange rate, subdued household income, rising fuel prices as well as increased energy and logistics costs,” the company added.

The company said it had implemented various measures to try to address and improve the performance of their manufacturing operations, including cost-saving initiatives and efficiency improvements.

“However, despite our best efforts, the current operating environment remains challenging, necessitating further action to ensure the long-term sustainability of our manufacturing operations,” it said.

The company said that it is entering a consultation process in accordance with Section 189(3) of the Labour Relations Act (LRA).

This part of the LRA requires employers to disclose in writing to the employees or their unions all relevant information including the reasons for the Retrenchment, alternatives to dismissal that were considered, and the reasons why they were rejected.

Subject to the outcome of the consultation process, the company estimates that approximately 700 employees at the East London Manufacturing Plant could potentially be affected by these retrenchments and the transition from a 3-shift to a 2-shift operating model.

“The Section 189 consultation process could see the number of employees retrenched though the implementation of early retirement, voluntary severance, and natural attrition measures,” said MBSA.

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