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BMW shuts down Rosslyn plant for two weeks

Its European factories too, as a result of Covid-19 risk and a decline in vehicle demand.
The temporary closure of the plant near Pretoria will affect about 2 500 BMW SA employees. Image: Moneyweb

BMW South Africa is to shut down its Rosslyn manufacturing plant in Pretoria for two weeks because of risks posed by Covid-19 and the resulting impact on demand for new vehicles.

The temporary closure of the plant will affect about 2 500 workers and other group employees.

Alex Parker, manager of business communications at BMW SA, said on Wednesday the company will start to shut down production on Thursday, with BMW’s car plants in Europe and in SA to be shut by the end of the week.

Volkswagen has also suspended production for two weeks at plants in Europe operated by the Volkswagen Passenger Car brand but its plant in Uitenhage in SA is unaffected at this stage.

Initially Volkswagen production facilities in Wolfsburg, Emden, Dresden, Osnabrück, Zwickau, Bratislava (Slovakia), Pamplona (Spain) and Palmela (Portugal) are affected, as are components plants at Brunswick, Chemnitz, Hanover, Kassel and Salzgitter, and the Sitech distribution arm.

Parker said that with global demand in the car market expected to drop, the BMW Group is responding by adjusting production well in advance and using its broad spectrum of flexibility tools.

“The shutdowns are initially scheduled to last until April 19. After that, we will continue as the situation requires.

“The operation of our engine and component locations – as well as our international automotive plants – will be decided in the next few days. This will depend on the development of demand,” said Parker.

“Initially, the flexibility instruments agreed upon by the company will apply to the employees concerned.”

Parker declined to comment on whether a ‘no work, no pay’ policy will apply to workers and employees affected by the shutdown.

Oliver Zipse, chair of the board of BMW AG, announced the closure of all BMW plants in Europe and in Rosslyn on Wednesday at the group’s annual accounts press conference in Munich in Germany.

‘Responsible behaviour needed’

Zipse said responsible behaviour is needed in times like these, adding that medical experts and scientists are giving clear directions as to what needs to be done to slow down and contain the spread of the Covid-19 pandemic.

He said BMW as a company has diverse responsibilities in this situation, including to protect its employees and their families as best it can, to support society in its fight against the virus and, at the same time, to maintain its operational capabilities and prepare for what comes “after the virus”.

“We have made far-reaching decisions that affect our daily business. Many people are focusing on their health and wellbeing and what is most essential right now.

“In light of this, we have already temporarily closed the first dealerships in Europe,” said Zipse.

Demand for cars, like many other goods, will decrease significantly.

“Our production is geared towards sales development forecasts – and we are adjusting our production volumes flexibly in line with demand.

Andile Dlamini, head of group communications at Volkswagen Group SA, said on Wednesday that the Uitenhage plant is still operating as normal on three shifts a day from Monday to Friday and is still receiving parts to assemble cars.

Read: Covid-19: Cruise and cargo vessel held ‘off port limits’ in Cape Town

But Dlamini confirmed that Volkswagen SA is checking what is happening in Europe to see if it impacts on their supply chain.

Dlamini said Volkswagen SA produced about 160 000 vehicles last year, with about 110 000 or 68% of them destined for the global export market.

He said it is too early to say if the Uitenhage plant will have to move to short production weeks because of a reduction in the global demand for vehicles.

Fears impact may be significant

Mike Mabasa, chief executive of the National Association of Automobile Manufacturers of South Africa (Naamsa), said on Wednesday they are concerned that the impact of the coronavirus on the industry is going to “be significant”.

“The longer the current situation persists, it will obviously continue to make the situation even worse and also in relation to global shutdowns,” he said.

Mabasa said the plant shutdowns announced by BMW will have a “huge impact” on Naamsa’s export, sales and production forecasts for this year.

Naamsa has forecast that exports of SA-produced vehicles will increase by 1.2% to 391 900 vehicles this year from 387 139 vehicles last year, with total local production rising by 0.38% to 634 400 vehicles from 631 983 vehicles last year.

Mabasa agreed that the travel ban announced by President Cyril Ramaphosa and by other countries will disrupt the tourism industry and is likely to result in the car rental industry delaying vehicle purchases.

He said it is very difficult to say what action each of the local vehicle manufacturers will take to mitigate the reduction in vehicle demand and sales.

“I’m sure each of them will have different strategies to mitigate against the current challenges,” he said.

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COMMENTS   21

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I fear, once a global recession (or depression) sets in, so many businesses will be affected that countless people’s LIVELIHOODS WILL BE DESTROYED on a financial/social scale!

This will cause a spike in suicides 🙁

I’m willing to take a (very sobering) bet, that before THIS YEAR is over, MORE PEOPLE on the planet would COMMIT SUICIDE (as a result of financial distress caused by Covid-19) THAN THERE WILL BE DEATHS CAUSED BY THIS VIRUS ITSELF!

(It means, in essence, it’s NOT ONLY the aged that is at risk, but the young & middle-aged as well!) Suicides will outnumber Covid-19 deaths. (The WHO reports 2,000 suicides per day globally…one every 40 sec. This will get much worse during a recession)

You sound like a profit of doom
Lets see how this anomaly plays out before we become a betting nation

As it stands I’m sure banks will assist by giving people payment “holidays”
I received one such letter from Absa today willing to assist people in distress

Profit of doom? *lol* No, just a sober & realistic MW commentator 😉

What you say about the banks sounds positive 🙂 Never missed a bond-instalment myself, so far…but I’ll still ask my bank to give me payment holiday in any case. Surely, we got to milk the system, until there’s zero banks left…

..apologies…it’s spelt “PROPHET of Doom”.

Wanneer beide van ons nie Engels korrek kan spel nie, is dit ‘n klinkklare bewys dat my “Profyt/wins van insekdoder” korrek is:

…wanneer mense nie meer kan spel nie, is daar nie meer hoop vir ‘n nasie nie 😉 (….jy sien, want meeste vd slimmes het die land verlaat)

Apologies..Prophet of Doom..Thank you Michael from Klerksdorp

Jy sal nie glo my Ma was ‘n Skot, dus is ek net so “Ingels” soos wat ek Afrikaans is..
Om te spel was nog altyd my sterkpunt..Soms wanneer mens in die middel van die nag wil skryf kan ‘n glipsie intree

To “err” is human, to forgive divine”

Mooi dag en onthou ..Was jou hande, al is dit nie in onskuld!

Lyk my daar is nie baie werk in Klerksdorp vir Michael nie so nou hou hy homself besig met MW en spelling.

…jy is “forgiven” boeta! 🙂 (as ek my tale mag meng soos Nataniel)

Nee kyk, ek’t al self baie typos op MW comment deurgelaat….in one’s frantic excitement (or rush between office work) WITHOUT doing proof reading 😉

En dan sien ek my stupid typos NADAT ek “send” het *lol*

Stay healthy, take care of your parents / the elders & keep the economy going!

MichaelfromKlerksdorp,

The thing is these very real consequences are never measured or traced after the case. It is similar to a study on road deaths after 911 that resulted in additional road deaths as people were travelling via air.

The other consideration is stress related illness and fatalities.

New car sales will probably drop.

…on the cards, who buys a car while they facing death?

When is the petrol price coming down?

When all our money is spent on buying toilet paper, disinfectants and SARS and we have nothing left to fill up, thats when the price of fuel comes down

Then it’s too late..I’m investing in a new pair of shoes to walk my way through life thanks to our very competent “Government”

Dunno. But would’ve been a great time to replenish our corruptly-sold strategic fuel reserves right now if government had any spare money for that.

The SA Government is bankrupt!!! …. they in Debt 🙂

Maybe an opportune time also, come April, to fill up all one’s LPG-gas cylinders (as it’s linked to the fuel price set by govt.)

This panic is going to make many people very poor. Very, very stupid. 8000 died, not 8 mil. Just like humans, destroy everything. The flu is really not going to change my lifestyle.

a few more weeks/months and the picture will change.

This might seem a bit unsympathetic in the serious light of Covid-19, but let’s just look at the facts. Of all the people who have been infected worldwide, only about 4% have died. That means even if you get the virus, you have a 96% chance of recovering. I wish casinos or the Lotto gave us odds like that.

You guys don’t get it. Covid-19 is far more contagious than anything we have dealt with before in modern society. Models are predicting 25-50% infection rates (or higher in some cases!) without a vaccine or effective quarantine measures. Assuming the more conservative end of 25% of 50m SA pop we have 12.5m infected and at 4% fatality rate that’s an extra 500 000 dead. Then of the 12.5m infected how many that recover still have to be hospitalized at some point? The system can’t cope. The country can’t cope.

Even King Trump has woken up to the fact that this is serious. You should too.

Many of the positive cases are from people travelling to and from the schengen area like germany,italy,austria,spain,..etc

Scary

End of comments.

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