Mercedes-Benz SA to retrench 700 employees

 
(The Post News)– Mercedes-Benz South Africa (MBSA) plans to retrench about 700 employees at its East London manufacturing plant to improve operational performance. This move will reduce operations from three shifts a day to two shifts a day.
 
MBSA stated that this decision comes after much consideration due to challenges in the automotive industry. 
 
These challenges include unstable exchange rates, protracted port issues, low macroeconomic conditions, and growing expenses.
 
Reports indicate that despite implementing cost-cutting measures, the company will need to adopt external strategies to ensure its future sustainability. 
 
According to Mercedes-Benz South Africa (MBSA), a consultation process focused on reorganising its manufacturing operations has been initiated by Section 189(3) of the Labour Relations Act. MBSA is working closely with relevant stakeholders in compliance with the same section.
 
The C-Class plays a key role in the production, which is the global network for the MBSA East London Plant. The production of these sedan C-Class produces right- as well as left-hand drive markets for the exports.
 
Eskom’s inconsistency continues to harm businesses and the South African economy even further. Due to load-shedding, nearly every business experienced losses. MBSA was significantly impacted, being compelled to spend approximately $100 million on solar energy projects to maintain production and sustain sales.
 
 
According to Andreas Brand, the CEO, the driving forces behind these consultations at MBSA were the company’s heavy reliance on sales volumes and changes in the operational environment.
 
He stated that from 2021 to 2023, MBSA’s sales volumes increased steadily for three years in a row, but in 2024, the company experienced the opposite pattern.
 
He remarked, “If you have such a trend, you must make decisions at a certain point in time, and that is what has happened.” 
 
The company disclosed that, similar to other premium brand Original Equipment Manufacturers (OEMs) in South Africa, the majority of the cars it manufactures are intended for export rather than the domestic market. However, MBSA did not specify the exact percentage of its production volumes allocated to exports.
 
According to the statistics from Naamsa, an Automative Business Council recorded that an estimated 478 new cars were sold. About 7,000 units were exported to the domestic market.