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Wounds of Hyundai ‘sabotage’ reopened

MBONGENI MGUNI
The Hyundai plant's original location in Gaborone West. it moved back to Block 3 circle a few years before liquidation. PIC: PHATSIMO KAPENG
A South African car manufacturer has plans of expanding to Botswana by 2021, restarting the country’s dormant vehicle assembly industry. For survivors of the Hyundai collapse of 2000, the hopeful news is a painful reminder of the tragedy of that year. Staff Writer, MBONGENI MGUNI reports

That December, the 900 or so citizen workers at Hyundai Motor Distributors Botswana had received their salaries and year-end bonuses before knocking off for Christmas.

The year was 1999, the turn of the millennium and, thanks to their efforts at the Block 3 Industrial plant, vehicle manufacturing had become the country’s second highest export commodity after diamonds.

Vehicle assembly in the country had started in 1993 and by 1998, exports reached a peak of 3,000, the values earned representing a rapid industrial turnaround for a country whose diamond-led economy had struggled to develop a manufacturing base.

On January 7, 2000, Tebogo Mongwaketse, then 29 years old, joined hundreds of his co-workers as they trudged to the first day of work after the holiday. The light conversation punctuated by laughs was around what each had done during the millennium holidays, a festive season made memorable by the fact that the whole world threw a global party to remember.

A nasty surprise was waiting.

“We were told to get out and the security locked the gates,” he recalls.

“I actually thought the action was directed at the group I walked in with specifically perhaps for some wrong thing we did. But they meant everyone, all the workers.

“I had my overalls and boots in my locker. Others also had the same and other items. “They wouldn’t let anyone get on the premises to retrieve anything.

“They didn’t explain anything. They told us to go home and said they would call us.

“We left with that belief that we would be called, but they never did.”

According to Mongwaketse and other sources, the last thebe they received from the company was the December salary. Promises to make good on the entitlements the retrenched workers were owed, went unfulfilled over the years, despite the workers’ numerous efforts and pleas.

The company packed up and relocated to Kimberly, South Africa.

The workers were un-unionised and their efforts in fighting for their dues grew steadily weaker.

They dispersed, across the country, to different villages, different jobs, out of sight and out of touch.

Their numbers declined as some passed away.

Today, they are under 500.

“We previously went to see President Khama about the issue and it appeared he was willing to help, but nothing happened,” Mongwaketse says.

“At some point, we were told Hyundai had agreed to settle the severance packages and funds had been released. Apparently we just needed to sign somewhere but nothing came of that.

“There was a story at some point that Hyundai had left P100 for each of us at BBS, but I could not even find one person who actually confirmed that or saw that money.

“Who wants to go that far for P100 if it indeed was there?” “Last year a group wanted to March to the Office of the President and present our petition but at the last minute, the police said we did not have permission.”

While technical, the reasons behind the assembly plant’s closure are heavily cloaked in regional politics and rooted in one of the greatest acts of sabotage committed in the SADC industrialisation agenda.

With Botswana ramping up its vehicle assembly capacity and increasingly exporting into the SA market, that country filed a rules of origin complaint under SACU against the Hyundai plant arguing that because it used Semi-Knocked Down kits, the cars it produced did not qualify for favourable duty provisions.

According to a BIDPA paper on the matter, the threat to South Africa’s own vehicle manufacturing industry prompted the complaint and the subsequent moves “Big Brother” made to shut the local plant down.

“The rate of growth of exports from Botswana threatened the South African motor vehicle industry which argued that

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there was insufficient value addition (on the Botswana vehicles to justify the duty discount),” reads the think tank’s study published in 2015.

“Botswana (eventually) reportedly agreed to a quota of exports of 1,000 units per month which was half the minimum efficient scale (at the plant).

“The company closed in 2000 as a result of a combination of barriers to entry and poor management.”

South African vehicle manufacturers found themselves fighting a surprise adversary, Botswana, a country they had never expected to pose a challenge in any industrial capacity. The SA producers had long enjoyed free reign in the Botswana market, their sales increasing over the years as Botswana’s economy expanded after Independence.

Now, “tiny” Botswana was punching back, sending thousands of competitively priced Hyundais across the border. The company would later branch out to include the assembly of Volvos and by that time, the South Africans had seen enough.

Mongwaketse and his colleagues had no inkling of the trade war. He recalls that the company did not formally brief workers on any problems ahead of the liquidation in January 2000. Rumours abounded.

“We only heard that the company had been enjoying a tax exemption because it had employed many Batswana and that the exemption had elapsed. “We heard that the cars were primarily being sold in SA not here and that the bosses were asking why they were incurring costs of shipping components from the sea to Botswana only to make the cars and send them back to SA for sale.

“With those costs and the exemption having elapsed, the business was harder,” he recalls.

Meanwhile, Mureza Auto Company, a Johannesburg-based vehicle manufacturing start-up, hopes to gather enough momentum in its home market, to eventually expand to Botswana and re-establish vehicle assembly.

Mureza CEO, Tatenda Mungofa told Mmegi earlier this week that while the due diligence and other planning was yet to be done, the objective was for the Botswana plant to have a minimum capacity of 500 units and average employment of between 200 and 300 employees.

“This can be ramped up to 1,000 units if the demand is there.

“It’s a lengthy exercise and we also intend to engage the authorities for proper evaluation of such investment.”

While still a hope at this point, talk of re-establishing vehicle assembly in Botswana largely does not immediately trigger excitement amongst those who were there that morning on January 7. Mureza has hinted that it would tap into the old Hyundai labour pool should it make the jump to Botswana. “We have tried to raise this case so many times,” Mongwaketse says. “We have had hope and nothing has happened.

“Nna tota ke itlhobogile, ke setse ke lapile,”

Now nearly 50 years old, Mongwaketse works as a handy man in the Main Mall, doing various odd jobs to keep afloat. His former colleagues similarly had to fend for themselves and one is apparently running a steady business as a private mechanic for Hyundai vehicles. Life these days is a far cry from the days when the assembly plant was running at its peak.

“We lacked for nothing.

“The company supplied breakfast and lunch; you just went to the cafeteria, got your plate and dished for yourself. “We would get bonuses at the end of each year without fail.

“We also had weekly bonuses paid for the team that met its targets or that was ahead of others in terms of quality of work.

“Salaries were always paid on time and life was really good.”

Nearly 20 years after the doors closed and even with the flicker of hope provided by Mureza, the wounds of South Africa’s betrayal are yet to heal for many.



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