Millions to flow into East London

New motoring millions are pouring into Buffalo City with Mercedes-Benz SA yesterday announcing excellent figures and a suite of new cars to be built in their high-performing East London plant.

From left, Mercedes-Benz SA CEO Arno van der Merwe, independent MBSA director Nonkululeko Gobodo and another independent director Cheryl Carolus and new MBSA CEO Andreas Engeling.

Executives stressed that the corporation sailed to these successes against a volatile, even “stormy” global economy.

Outgoing MBSA CEO Arno van der Merwe was releasing the results at the Zwartkop Raceway near Johannesburg before leaving to head up the company’s operation in China.

He said to applause that three Mercedes-AMG sport sedans will be manufactured this year at the East London plant.

He announced that MBSA’s revenue was up by 10.8% from R66.2-billion in 2015 to R73.4-billion last year. Their R5.6-billion of earnings before interest and tax (Ebit) was 27.3% higher.

He did not know how many new jobs would be created but said: “There will be a lot more work, and a lot more complexity, more technology to handle. This can only bring positive results.”

The East London plant has earned many accolades for its high productivity, harmonious work relations and innovations.

Since 2016, parent company Daimler, working through MBSA, has invested R660-million in the plant. Last year R416-million was spent, mainly on retooling for the C350 plug-in hybrid car.

“The revenue gains were, in large part, due to higher production volume out of the East London plant, as well as concurrent increase in export revenue generated from that plant,” MBSA said. In an interview with the Dispatch, Van der Merwe said: “Global competition is fierce. “We have no time to work against each other. We have to cooperate and align ourselves.”

He said production of the Mercedes-AMG C 43 4MATIC, C63, C63S, as well as the C400 4Matic, will come online in the next few months.

Last year, 114000 passenger vehicles rolled out of the plant, an increase of 12%, and 4500 commercial vehicles were produced.

He said 90% of the vehicles were exported and sold around the world.

Much of this success was because of the trend-setting five-year “Siyaphambile Agreement” signed with labour last year.

He said their learning academy, which launched in March last year with funds from Treasury’s Jobs Fund, has already seen 400 people trained there getting formal jobs, and another 100 were in the pipeline for employment placement.

The academy was training 230 shop-floor workers and 50 artisans a year, he said.

In a brief comment, Van der Merwe’s replacement, Andreas Engling, who comes from Germany, said he was keen to learn about South African culture.

“Together we are better,” he said briefly.

New MBSA executives are given a 100-day period to settle in before speaking to the public.

Van der Merwe faced a question from the media about why the corporation did not express greater disquiet over the threat of a downgrade caused by politics. He said: “The number one best thing business can do is to run our businesses well and this will support the political processes needed to create change.

“But it [politics] is not our predominant task.”

He was supported by Cheryl Carolus, an independent director of MBSA, who said: “We need to stick to the knitting.” —

By Mike Loewe


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