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The Mercedes-Benz plant in East London has begun its cost cutting restructuring programme but promises that it will not retrench any union members.
Yesterday, Annelise van der Laan, Mercedes-Benz South Africa's spokesman, said the company was expecting a higher reduction in head count than expected.
"This restructuring will not affect the rest of the group. The East London plant was due for restructuring even without the economic downturn.
"We did similar restructuring in other units in 2007 and 2006. It has to be done from time to time, but the head count reduction will be more than what we had expected it to be."
The plant is one of only three plants in the world that exports the Mercedes C Class to the US, the biggest car market. The other two plants are in Germany.
The plant is by far the biggest employer in East London with 3000 employees. However, only 800 salaried employees will be affected by the exercise.
The remainder, who are paid per hour and are mostly union members, will breathe a sigh of relief that their jobs are relatively safe.
The company would not specify how many jobs were on the line.
Van der Laan said: "We'll only find out at the end of the month how many people we'll have to provide packages for."
Tony Twine, director at Econometrix, said the lower production levels caused by the economic downturn would give the company "breathing room" to revise its processes to improve efficiencies.
He said: "Not all jobs are directly related to the volume of output. When times are hard and volumes drop, opportunities for engineering processes to be more closely scrutinised are presented. They could do more thorough maintenance of things like paint shops, which would just be quickly patched up when orders are way up.
"They could even save jobs by making cost savings more competitive, so that when the economy begins to turn around they could even hire more labour that is directly related to output."