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Thursday, 13 June 2024 14:36

Mercedes-Benz aims to cut 700 jobs in East London plant.

By Lehlohonolo Lehana.

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

The carmaker, which produces C-Class sedans for global export, attributes the decision to deteriorating economic conditions, logistical hurdles, and weakened consumer sentiment. 

"In recent years, the automotive industry has contended with several challenges which have also impacted MBSA and its suppliers. These challenges 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 said in a statement.

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.

The company has initiated consultations to restructure operations and may reduce shifts from three to two. This could lead to some 700 job losses. 

"We have implemented various measures to address and improve the performance of our manufacturing operations, including cost-saving initiatives and efficiency improvements," it said.

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