Mercedes Benz South Africa criticised for failure to appoint black chief executive in 60 years

ANC Eastern Cape Provincial chairperson and MEC for economic affairs Lubabalo Oscar Mabuyane has strongly criticised Mercedes Benz South Africa for its failure to appoint a black chief executive officer in its 60-year tenure in South Africa.

The forthright message was delivered at the weekend during the final round of meetings in the BRICS Friendship Cities, Local Government Cooperation and Urbanisation Forum in East London.

The forum, hosted at the East London ICC by Buffalo City Metropolitan Municipality, drew together country representatives of BRICS – Brazil, Russia, India, China and South Africa – to discuss issues relevant to their cities.

Mabuyane criticised MBSA for not having had one black chief executive officer in its 60-year tenure in the country. The company has had one local CEO, a white South African, Arno van der Merwe, who has subsequently been posted to head up a Daimler plant in China.

President Cyril Ramaphosa attended an event last week at which MBSA, East London’s premier investor, provided details of a R10-billion re-investment in its plant on the West Bank. The ANC Eastern Cape provincial secretary, Lulama Ngcukayitobi, welcomed the announcement of the investment, with no hint of unhappiness with the German-owned multinational.

But just days after the shot-in-the-arm for the local manufacturing sector, Mabuyana took aim at MBSA over local content both in the components going into its high value vehicles and in its most senior executive position.

While acknowledging the province’s “impeccable” status as the hub of South Africa’s automotive assembly programme, the MEC said there was concern about the amounts of imports in the auto sector “which are suffocating our local content ambitions”.

“We are still beaming with joy following the recent announcement by MBSA of a R10 billion investment in their plant here in East London.

“What further sweetened that announcement was the R2 billlion set aside for the benefit of local component manufacturers in the auto sector value chain.”

Departing from prepared comments at the breakfast meeting hosted by the city, Mabuyane said:

“The only frustrating part of that is how we invest on the human resources side.

“That plant has been operating there for 60 years but it has only given an opportunity to a South African as CEO – a white South African – once in 60 years.

“That tells us that it is something we are not doing right in terms of our skills transfer. We must look at it. Because it tells you, if they decide to close shop, what next? What will happen?

“Will we be able to continue with that plant ourselves as South Africans? Can we partner with them, will we be at the same level as them in ensuring that plant has another 60 years to come?”

The MEC said it was important that government entered into discussion with MBSA on the issue, to avert any prospect of the plant shutting down if German executive expertise left East London.

“It’s important that we have the dialogue with them, we must talk to them. All the initiatives that we have done already with them… we must make them sustainable.”

MBSA said in an unremarkable statement late today (Sunday) that they remained “committed to our involvement in South Africa as a leading responsible corporate citizen and we have demonstrated that commitment though various initiatives aimed at increasing employment equity within our organisation and the automotive sector in general. MBSA understands and supports the importance of a transformed South Africa. To this end, we continuously engage with all levels of government to realise the objectives of transformation as an economic and social imperative”.

The historical relations between the democratic government at national, provincial and local levels, and MBSA, have always been good.

But Mabuyane might have signalled some changes in provincial government’s attitude towards MBSA when he said:

“We remain concerned by the amount of imports in this sector which are suffocating our local content ambitions.”

In his comments at Saturday’s session, Buffalo City Mayor Xola Pakati said MBSA’s 60-year relationship with the metro was the clearest indication that the city was “a credible place for investment”.

He said the metro would work fast to process all land development applications from MBSA in relation to its re-investment programme, in order to reduce the cost and time of doing business in the city.

“This is why the company has made this city its home, contributing to job creation not only through its plant but the various companies that have been created in the upstream and the downstream of the automotive value chain.”

The mayor said the need to accelerate industrialisation and agricultural modernisation were at the core of relations between cities in BRICS. – RAY HARTLE


Mercedes Benz South Africa criticised for failure to appoint black chief executive in 60 years
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