Disinvestment leaves South African city waiting nervously

Press, 28 July 1989, Page 38

Disinvestment leaves South African city waiting nervously

By

GILL TUDOR

NZPA-Reuter Port,Elizabeth Port Elizabeth, the hub of South Africa’s motor industry, has survived two big disinvestments, but the city is waiting apprehensively as another large American employer quits the area. Known as. “the Detroit of South Africa,” Port Elizabeth and the nearby Uitenhage, in eastern Cape Province, once played host to three giant foreign motor firms — Ford and General Motors, of the United States, and Volkswagen, of West Germany, as well as dozens of independent component plants. Ford and G.M. have now pulled out of the country as a result of pressure from international anti-apartheid campaigners

and big local financial losses. Last month the Ohio-based Goodyear Tire and Rubber joined the ranks of disinvestors, announcing the sale of its Uitenhage tyre subsidiary to the South African mining house, Anglovaal. “While we will regret leaving South Africa ... it is becoming increasingly difficult for American companies to obtain adequate returns on investments there,” said the Goodyear chairman, Tom Barrett. Anglovaal says no jobs will be lost but local concern is high. The area has many foreign employers and one of the worst unemployment rates in a country where it is estimated at 36 per cent. A spokesman for the National Union of Metalworkers of South Africa

(N.U.M.S.A.), which represents tyre workers, said the union feared job cuts sooner or later in spite of Anglovaal’s assurances. Unofficial unemployment estimates for Port Elizabeth and Uitenhage hover around 50 per cent, while some researchers put the figure as high as 67 per cent among blacks. Poverty is rife in townships like New Brighton, for years a hotbed of antiapartheid protest and scene of some of the worst violence in riots which swept the country during the mid-1980s. In 1985 Port Elizabeth lost 5000 jobs when Ford merged with the car division of the mining and industrial giant AngloAmerican Corp, of South Africa and moved north to Pretoria.

Ford later quit South Africa entirely, although its cars are still made here under licence. “The Ford pull-out was an incredible psychological blo.w to Port Elizabeth,” said a local Chamber of Commerce director, Anton Vlok. “I’m quite sure the (employment) gap has never been filled adequately.” “We can’t provide jobs for all the school leavers, let alone absorb people made redundant,” said Ronnie Kruger, of Volkswagen, the Eastern Cape’s biggest private employer with 6000 staff at its Uitenhage factory. Volkswagen has pledged to stay in South Africa, but Mr Kruger warned future circumstances could still force a withdrawal.