By Trevor Ngwane
Is Volkswagen South Africa (VWSA) really leaving the country? Thomas Schäfer, the CEO of German behemoth Volkswagen Aktiengesellschaft (VWAG) Passenger Cars division, detonated shockwaves through the South African economy when he bluntly called on the South African government to get its act together, failing which his company would close the Kariega (Uitenhage) car plant and walk away.
If that happened, 3,500 jobs would be lost and the country would lose billions in export and tax revenues, the pundits warned.
Blood pressures were lowered when VWSA spokesperson Andile Dlamini assured the nation that the man from Wolfsburg, VWAG’s headquarters in Germany, had been quoted out of context and that after 72 years producing cars in the country, VW had no intention of leaving.
However, the damage had been done because Schäfer had mentioned touchy subjects such as load shedding, Transnet’s logistical logjams, rising wage bills and the government’s policy hesitancy on the transition from internal combustion engines (ICE) to electric vehicles.
Is there a danger that VW and other auto companies could leave the country? Can anything be done to avert this danger?
In 2017, after more than 90 years, the American multinational General Motors Company (GM) upped the stakes and fled South Africa citing “global business priorities” related to a changing passenger-vehicle market.
In truth, despite the ANC-led government’s glaring shortcomings, the threatened flight of car manufacturers from South Africa has more to do with the country being caught in the chaos of the crisis of the global car industry. The auto sector is faced with cut-throat competition, rapidly changing regulatory spaces and consumer trends, disruptive technologies and supply chain disruptions. ‘It’s crazy,’ says Steffen Knapp, the head of Volkswagen (VW) Passenger Cars in South Africa.
The global economic system is in crisis; a capitalist crisis compounded by the challenges of the need to transition from fossil-fuel-driven vehicles to carbon neutral engines and technologies.
The industry is characterised by uncertainty, instability and insecurity. History tells us that, under capitalism, major economic structural shifts become a theatre for dog-eat-dog struggles for global dominance of industries by multinational corporations.
It is not just a fight to survive the shift from ICE to EVs, but a long-term positioning in the industry hierarchy.
GM and Chrysler emerged dominant after the Great Depression in the 1930s overtaking Ford and ending its apparently unassailable dominance. In other words, VWAG is fighting for its life and South Africa is one among many fronts in the war.
Like in the 1930s, the stakes are high but this time they are higher because it is not just the fate of companies at stake. It is the fate of humanity and of Earth itself that is being decided.
From the point of view of the working class and the poor, South Africa is a pawn in VWAG’s battle plans. However, it is an important pawn, with the Kariega plant being the sole producer of the Polo GTI and producing a fifth of the Polo and Polo Vivo models from which the company makes handsome profits in the global market. But as any chess player will tell you, the first piece that gets sacrificed in a game is a pawn.
Auto companies are caught in a dilemma of abandoning their cash cow fossil-fuel-driven operations and moving into the uncertain, unproven and rapidly changing zero-emission technologies.
Some companies such as Tesla are grabbing the bull by its horns and investing in EVs. Some, like VWAG, are hedging their bets including trying to have it both ways.
“In the Volkswagen group, we look at this (African and Asian) belt with ICEs in mind for another model cycle of two, while we look to Europe as using mainly EVs after 2030,” says VWSA CEO Martina Biene.
In other words, the Kariega plant will produce cars propelled by dirty energy for as long as possible while the company moves with its transition to EVs in Europe.
Given VWAG’s less than saintly origins in the Nazi era, its Dieselgate where it misrepresented the amount of vehicle carbon emissions to regulators, its alleged employment of forced labour in China’s Xinjiang region, its expulsion of 14 Numsa shop stewards for blowing the whistle against VWSA’s breaking Covid-19 regulations, and the accusation that it is paying lip service to green technologies while paying anti-renewable energy lobbyists, the working class and the poor cannot trust the bona fides of the multinational company.
It is no conspiracy theory to suggest that VWSA will demand further tax breaks and support from the South African government to produce more ICE cars, but when the crunch comes the company will walk away, leaving the country and workers high and dry with obsolete and pariah fossil-fuel-driven technologies which Europe and other imperialist countries will reject using carbon taxes and outright bans.
VWAG’s CEOs and top officials are, as Marx wrote, the “personification of capital”, they will do anything and everything to make money, including the moronic strategy of producing EVs in Europe and ICEs in Africa as if those living in Europe won’t be affected by climate change.
A government controlled and run by workers in South Africa would not believe the German capitalists. They are desperate to make money while their system is in crisis. Their strategies can only lead to more global warming and more suffering for the working class and poor, especially in the Global South.
South Africa must invest in the future. South Africa must strive to save the planet. There has been too much hardship and suffering from centuries of plunder, conquest, slavery, colonialism and racial capitalism.
We must liberate the just energy transition from capitalist interests and the corporate behemoths and their crisis-ridden system. Only a developmental agenda that rejects fossil fuels and embraces renewable energy solutions can secure our future. Let us invest in renewable energy and walk away from the futilities and fatalities of fossil fuels.
*Ngwane is the Director of the Centre for Sociological Research and Practice, University of Johannesburg.
**The views expressed do not necessarily reflect the views of Independent Media or IOL