South African Car-Parts Workers Agree to End Strike

Sept. 25 (Bloomberg) -- South African auto-parts workers will sign a pay agreement today, ending a strike that halted work at Volkswagen AG and DaimlerChrysler AG factories.

``The proposed settlement package will be signed by all the parties today and the strike is called off,'' Mziwakhe Hlangani, National Union of Metalworkers of South Africa spokesman, said by telephone from Johannesburg. ``Members should return to work tomorrow.''

More than half of the parts industry's 80,000 workers walked off the job on Sept. 12, demanding a higher pay increase than offered. Volkswagen, Europe's largest carmaker, and DaimlerChrysler, the world's second-largest maker of luxury vehicles, halted production at South African plants the following day when they ran out of components. The two companies said they lost production of more than 4,000 cars.

General Motors South Africa, which had limited output today, said in an e-mail that it expects normal production to resume tomorrow.

The proposed settlement will give the lowest-paid workers a 10 percent increase, while the highest paid will receive as much as 8.5 percent. Inflation in South Africa accelerated to an annual 6.5 percent in July.

The auto industry accounts for 7.5 percent of South Africa's gross domestic product, according to the National Association of Automobile Manufacturers. Carmakers built 587,719 vehicles in South Africa last year and exported 179,859 to countries including the U.S., Germany and Australia.