Big guns’ concerns should worry government

When big international companies warn you they are starting to run out of patience with South Africa, then you better sit up and take notice.

Ford this week joined Volkswagen’s recent criticism of the country. Our dysfunctional port and railway system, along with our power crisis, are chief among their concerns in making South Africa an unattractive investment destination.

ALSO READ: Ford boss: Justifying business in South Africa becoming harder

Volkswagen’s global head of passenger cars recently questioned the sustainability of their South African operations, while Volkswagen South Africa boss Martina Biene this week warned Germany could run out of patience should the energy crisis and logistical challenges not improve.

Ford may have announced an additional investment of R5.2 billion to its Silverton assembly plant, in addition to the R15.8 billion upgrade in 2021, but Ford Motor Company Africa boss Neale Hill described the dismal current economic climate as a “slow poison for which South Africa could pay dearly down the line”.

ALSO READ: Volkswagen boss expresses concern over local operations

Hill said: “My concern is that business decisions that are being made right [now are] not going in our direction.

But we are not going to feel that until five years from now. I’m not trying to be a scaremonger or anything like that. I’m one of those tenaciously optimistic people that believe the message has to be heard.”

He added: “It’s getting harder and harder to convince our principals that South Africa is a place worth doing business with.”

NOW READ: Workforce cut possible at ‘no longer competitive’ Volkswagen

The local car industry contributes as much as 6% of South Africa’s GDP. Ford and Volkswagen are two of seven manufacturers with local assembly facilities.

In July this year, Deputy President Paul Mashatile met CEOs from 40 international companies in Europe.

Many concerns were then raised by the chief executives, including the energy crisis; the logistics challenges, especially on the rail network; a lack of skills development and the slow absorption of young people into jobs and business and continued challenges with business visas.

The warning lights are flashing. Is anyone in government paying attention?