CE tells how lost exports cost 800 jobs at group
Trade and Industry Editor
SA's automotive component manufacturing sector is continuing to suffer under the strong rand, with more job losses looming, Dorbyl CE Bill Cooper said at the weekend.
He said that the strength of the rand was making it difficult for companies to retain export markets, and that Dorbyl would soon have shed a total of 800 people because of lost export business.
He said that Dorbyl had not reneged on any of its contracts, but in some cases it had asked to negotiate its way out of unprofitable arrangements.
Cooper said that this year Dorbyl's automotive export division would post a loss, "and there will be further retrenchments. When you see government welcoming the strong rand and not worried about manufacturing, you don't bid for more business, you phase exports out."
Dealing with retrenchments, Cooper said: "If you are making multimillionrand losses you have no option but to stem those losses."
He said the automotive component sector's woes had been compounded by significant increases in steel prices on top of the strong rand, and that it had been impossible to recoup losses by pushing up prices in export markets.
Cooper said that government may not appreciate the implications the strong rand had on unemployment.
He contrasted SA with China, where the currency, the yuan, closely shadowed the dollar, and where the average wage was $80 a month.
"In SA the lowest wage is R600 a month, and the average is R800. How do you compete? We are being absolutely slaughtered," he said.
Cooper warned that a further reduction in employment resulting from the strong rand "will start in the next few months" as some contracts that were reached during the weak rand era came up for renewal, and the country's exporters found themselves unable to continue without making a loss.
However, Dorbyl had some contracts that stretched for a further two years "and they are costing us a lot of money".
"It's not like you can be an exporter today and not tomorrow. Often you have a four-year contract, and your customer is not interested in your difficulties, so you must continue to supply them.
"You can't be agile: in today, and out tomorrow," Cooper said.
Dorbyl closed at R18,75 on Friday, a gain of 24c.
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