BMW invests extra R2.2 billion in Rosslyn plant
October 5, 2009
Following in-depth negotiations with government, BMW will invest an additional R2.2 billion at its Rosslyn plant, the German car manufacturer said on Monday.
This would trigger the introduction of the newest BMW vehicle and production technology at the plant and within its local supplier network, BMW said in a statement prior to a media briefing.
"The investment will enable maximum plant capacity to increase from 60 000 to 87 000 units, while securing production in South Africa for the future," the group said.
The investment announcement followed the signing of a letter of commitment with the department of trade and industry (dti), which will honour the investment under the new support scheme for the motor industry, the automotive production and development programme (APDP), BMW said.
The APDP will replace the current support programme for the automotive industry, the motor industry development programme (MIDP), in 2012.
At the same time, the automaker announced a training program for 1 100 associates at plant Rosslyn.
"The training program commenced in early September and will run for the next 18 months, providing a Merseta [Manufacturing, engineering and related services sector education training authority] accredited qualification to the associates," BMW said.
It also served to avoid a "no work, no pay" situation, during scheduled plant shutdown periods, for associates who had not opted into BMW's flexible working time account, the group said.
"BMW is confident that this programme will be given the support of government's well-timed training scheme, announced in August."
BMW has had a local presence since 1968 with the Rosslyn plant its first manufacturing facility outside Germany in 1975.
BMW now indirectly employs 42 000 people (2 500 associates, 3 780 dealer staff and 36 000 first-tier supplier employees) in South Africa and is the country's leading exporter of passenger cars year-to-date.
The company said its investment decision gave "a clear message" about the BMW group's ongoing commitment to the South African economy and the confidence the company has in the country's future despite difficult market conditions.
The local premium segment is currently trading some 18 percent below 2008 levels, while the local vehicle market is facing its biggest decline in 15 years.
"The BMW group has never shied away from making decisions for the future in spite of the current tough conditions the motor industry is facing," said BMW South Africa managing director, Bodo Donauer.
"By making an announcement of this magnitude during the worst known crisis the automotive industry has faced in recent times, we not only send a positive message to our staff about the long-term sustainability of BMW South Africa, but also a positive message about the future of South Africa as a whole."
However, Donauer said it was important that issues about the APDP be resolved quickly.
"We have experienced that government is certainly willing to support the entire automotive industry but this willingness seems to be overshadowed by the many hurdles encountered in creating a programme that fits all stakeholders," Donauer said.
"It's high time that all of these stakeholders -- the OEMs [Original Equipment Manufacturers], the suppliers and government -- get beyond these hurdles quickly, in a unified effort, so that the automotive industry can concentrate on its core business.
"And by doing so, and maintaining and growing our operations, fulfil the most important prerequisite to support government's call to sustain and create decent jobs in the process."
With 56 local first-tier suppliers, Plant Rosslyn currently produces the BMW 3 Series in both left- and right-hand drive versions.
Almost 75 percent of this production volume is exported to customers in the USA, Japan, Taiwan, Singapore, New Zealand, Hong Kong, sub Sahara and Australia.
Donauer said the group had not resorted to retrenchment, even in the present difficult times.
"This gives us a distinct advantage to flexibly ramp-up the plant as market demand may require in future," he said.
"The government training scheme will support our no retrenchment policy and increase the skills base of our workforce at the same time," he said. - Sapa
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