Some time in the late 1990s an anxious team of Numsa trade union official and executives of Volkswagen SA boarded a plan to Germany. The mission was simple: to beg the board of Volkswagen AG to rescind its decision to close the local operation.
After years of horrendous under-performance, the Germans had had enough. Planning Round 52 stated clearly that the Uitenhage factory, in operation since the late 1940s, was a costly nuisance and was to be closed.
The news was devastating for Uitenhage. The company was not only the largest private sector employer in the Eastern Cape (it still is), economic life in Uitenhage and much of nearby Port Elizabeth (they are both part of the Nelson Mandela Bay Metro these days) depended on the factory. Its pitiful performance was already badly affecting local businesses, but this was Armageddon.
Volkswagen SA’s lack of competitiveness made for grim reading. With a workforce touching 10000, the factory was producing less than 42000 units a year, mainly for a domestic market badly hit by the fever the country caught when the Asian Tiger economies went bust. The factory produced too many models in very low, unprofitable volumes; and its labour relations arrangements were nowhere near what other countries were offering. It was time to adapt or die.
The Germans relented and gave Volkswagen SA one more chance, but it would take blood and tears to realise it. Painfully, the workforce was reduced to just over 6000 but they produced more cars, more efficiently. The poorly educated and skilled workforce had to transform quickly too, so the company invested in training facilities. New production technologies were introduced to improve quality and soon things were looking up.
Today the bushy area surrounding the Volkswagen factory is unrecognisable from what it was then. It’s a burgeoning industrial area employing thousands of people directly and indirectly. Almost all of it is there because the Volkswagen factory needs suppliers. It now produces over 110000 units a year, mostly for export. It also produces and exports engines and other components.
Make no mistake, Uitenhage is no paradise and it would take the charm of the Guptas to persuade me to go back there. (I cut my teeth at Volkswagen and learnt a thing or two about surviving and then thriving in a cutthroat global economic environment.)
Many remain poor despite the increased industrial activity. More is needed, of course. It’s still a small town and life is slow, but the residents are touchy about their VW factory. Every day they watch a family member, neighbour or acquaintance go to work where they go toe-to-toe with the best in the world and win.
So why am I telling this forgotten tale? Because it says a lot about the value of leadership and the ability to break through traditional tunnel vision and see the bigger picture. Current MD Dave Powels was a youthful financial director back then. Former MD Hans-Christian Maergner, a German, has since retired but not before performing similar miracles at Volkswagen Brazil (with Powels at his side).
Numsa’s Silumko Nondwangu was thrown out by his colleagues in the bun fight leading up to Polokwane. Former Eastern Cape economic affairs MEC Enoch Godongwana is now chairman of the ANC’s economic transformation committee.
I’m also relating this story because Anglo Platinum is retrenching 6000 workers. The National Union of Mineworkers says it has a plan, to go on strike. When the retrenchments were announced, government responded by issuing a threat to confiscate Anglo’s operating licences. Also, unlike the department of trade industry and its motor industry development plan, there is no mining sector strategy.
We live in hope.
Article source: http://www.fm.co.za/fm/Columns/2013/05/16/a-striking-example