Mercedes-Benz SA to ‘restructure’; 700 factory jobs at risk
Mercedes-Benz South Africa will enter discussions to “restructure” its manufacturing operations in East London, with 700 factory workers potentially facing retrenchment…
Mercedes-Benz South Africa has confirmed that it will enter into discussions to “restructure” its manufacturing operations in the Eastern Cape, estimating that “approximately 700 employees” at the East London plant could potentially be retrenched.
The German automaker’s local division released a statement confirming that it had “reached the decision” to enter a consultation process in accordance with Section 189(3) of the Labour Relations Act. The discussions will centre on the possible transition from the current 3-shift model to a 2-shift model at the East London factory, which produces the W206-generation C-Class sedan for local- and export markets. According to Mercedes-Benz’s global website, the facility has around 3 000 employees.
“In recent years, the automotive industry has contended with several challenges which have also impacted MBSA [Mercedes-Benz South Africa] and its suppliers. These challenges include deteriorating macro-economic 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 said in a statement.
“Against these pressures, we have implemented various measures to address and improve the performance of our 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.
“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 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.
“In close collaboration with key relevant stakeholders, the company wishes to embark on this process responsibly, transparently, with integrity and empathy whilst ensuring labour stability and continuing manufacturing operations,” the statement concluded.
The East London factory began producing Mercedes-Benz vehicles back in 1958. Production of the W206-generation C-Class sedan commenced in June 2021, when the Stuttgart-based firm announced an additional R3-billion investment (over and above the R10-billion announced in 2018) into the facility. In late 2023, the company invested R100-million into the 2nd phase of its factory’s solar energy project, aimed at taking it closer to carbon-neutral manufacturing.
Related content
Nissan SA to ‘restructure’ as it seeks NP200 replacement