Numsa Unshaken by Mercedes-Benz SA Plant Shutdown Amid Industry-Wide Slowdown

East London plant suspends production, but the metalworkers’ union says it’s business as usual in a turbulent global auto market

As Mercedes-Benz South Africa (MBSA) halts production at its East London plant until the end of July, Numsa, the country’s largest metalworkers’ union, has downplayed the decision, saying it mirrors a broader trend across the automotive sector.

According to Numsa General Secretary Irvin Jim, the union isn’t alarmed by the temporary halt, pointing out that Volkswagen and Nissan have recently taken similar steps. “Volkswagen suspended production for a month. Nissan has done that too,” Jim said at a media briefing on Monday.

Not a Shutdown, Just a Pause

MBSA has confirmed that the halt is part of a planned production adjustment, not an emergency response. Speaking to Moneyweb, the automaker stressed that this is aligned with routine annual shutdowns and volume-based production recalibrations.

The company added that employees will not be left in the lurch. They’ll be involved in training and upskilling programmes throughout the non-production period, and will still be compensated under existing collective bargaining agreements.

MBSA also confirmed that local suppliers were consulted in advance and kept in the loop throughout the process.

Training Layoff Scheme in Focus

Numsa says it has been informed that MBSA workers will be placed on a training layoff scheme, a structure that allows employees to receive skills development support during downtimes.

However, the union wants that net to be cast wider. Jim revealed that Numsa is pushing for similar support from the Department of Employment and Labour and the Unemployment Insurance Fund (UIF) for component workers impacted by the temporary shutdown.

“We are knocking at the door of the Department of Labour and UIF to see whether we can extend this scheme to parts suppliers and related industries,” said Jim.

Volkswagen’s Pause Linked to Major Investment

Jim’s reference to Volkswagen South Africa relates to a planned production pause at its Kariega plant, which ran from mid-April to mid-May. That break was to upgrade facilities ahead of the plant becoming the global production hub for the Volkswagen Polo from July 2024.

Volkswagen has also committed R4 billion towards preparing the plant for a third model, a compact SUV due in 2027.

Nissan: Resumed for Now, but Global Pressure Mounts

Meanwhile, Nissan’s Rosslyn plant recently resumed operations after a production halt lasting several weeks.

Though production is back, the long-term future of the plant remains uncertain. In May, Reuters reported that Nissan is considering shutting down several plants worldwide, including in South Africa, India and Argentina—as part of a global cost-cutting overhaul targeting its 2027 financial year.

Numsa says it has not received any official confirmation of closure plans and is actively engaging Nissan South Africa to explore alternatives.

“We understand the pressure from Nissan’s global turnaround strategy, but the idea that Rosslyn will be sacrificed is not yet confirmed. We are still in talks with management,” Jim said.

US Tariffs: A Quiet Concern

While MBSA declined to comment directly, reports have linked the production adjustment to recent US tariffs. In April 2025, the US imposed a 25% import tariff on foreign vehicles, which could hit South African exports hard.

MBSA only stated it is “assessing the impact” of the tariffs, offering no further insight. But industry watchers believe the new trade barriers could eventually reshape manufacturing and export strategies.

A Shifting Industry, Not a Crisis

While headlines around production halts may suggest trouble, industry insiders and union leaders alike insist this is more about strategic recalibration than crisis.

Irvin Jim’s message was clear: the South African auto sector is navigating change, not collapsing. Planned pauses, investments in new models, and global economic shifts are all in play and the key is staying proactive, not panicked.

{Source: Moneyweb}

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