Automobile crisis US trickles down to South Africa

The crisis faced by the American motoring industry has trickled outside the borders of the United States, and all the way to South Africa.

According to South Africa's national metal workers union NUMSA, thousands of jobs are on the line now that General Motors, Ford and Chrysler are on the verge of bankruptcy. Earlier this week, the three car producers asked for a 25 billion dollar loan to prevent them from collapse.

In September, Ford Motor Company SA presented the union with a notice to retrench 220 staff in harbor town Port Elizabeth and 506 in Pretoria, South Africa's administrative capital. The South African branch of General Motors has also shed employees - 900 in total. And according to NUMSA, more retrenchments are to follow. 

Apart form the problems at GM, Chrysler and Ford, other culprits include higher interest rates and increased inflation, as well as the weaker rand. The South African rand is, apart form the Icelandic Kroner, the currency which has depreciated most over the past months.

Not only the car manufacturing industry, also the mining sector is facing severe problems.  As a result of declining export of natural resources and plummeting prices of for instance platinum (which has dropped with over 60% over the past few months) about 70 000 of the in total 400 000 jobs are on the line.

As many as 21 000 people employed by or dependent on income from the platinum mining and supplier industries could experience a body blow in the month ahead.

Lonmin for instance, the world's third-largest platinum mining firm, has said that cut ± 1000 jobs. In addition, it will close some of its local platinum mines and halt two key projects.