The contribution of Technical Vocational Education and Training formal programmes to inclusive company growth and transformation: A case study of the automotive manufacturing sector in South Africa Anthony Tolika Sibiya: 1816828 A thesis submitted to the Faculty of Humanities, University of the Witwatersrand, School of Education, in fulfilment of the requirements for the degree of Doctor of Philosophy in Education Supervisor: Prof Stephanie Allais Johannesburg/Parktown 12 October 2022 TABLE OF CONTENTS DECLARATION .......................................................................... i ACKNOWLEDGMENTS ............................................................ ii ACRONYMS AND ABBREVIATIONS ........................................ vi TABLE OF FIGURES ................................................................. viii ABSTRACT ............................................................................... ix CHAPTER ONE: INTRODUCTION OF THE RESEARCH STUDY .. 1 1.1 CHAPTER OVERVIEW ..................................................... 1 1.2 DEFINITION OF CONCEPTS IN THE STUDY ..................... 3 1.3 CONTEXTUAL BACKGROUND OF THE STUDY ............... 4 1.4 INDUSTRIALIZATION AND ECONOMIC GROWTH ......... 5 1.5 RESEARCH PROBLEM ..................................................... 7 1.6 RESEARCH AIMS AND OBJECTIVES ............................... 9 1.7 RESEARCH QUESTIONS .................................................. 9 1.8 RESEARCH RATIONALE ................................................ 10 1.9 SIGNIFICANCE OF THE RESEARCH .............................. 11 1.10 OVERVIEW AND OUTLINE OF CHAPTERS .................. 11 CHAPTER TWO: CONTEXT: THE ROLE OF AUTOMOTIVE INDUSTRY IN THE SOUTH AFRICAN ECONOMY .................... 16 2.1 CHAPTER OVERVIEW ................................................... 16 2.2 THE ROLE OF AUTOMOTIVE IN SOUTH AFRICAN ECONOMY ......................................................................... 17 2.2.1 Control and Ownership Patterns ......................... 20 2.2.2 Employment Outlook in the Sector ..................... 23 2.2.2. Gender Employment Patterns in the sector ...... 24 2.2.3 Export and Sales Market ...................................... 25 2.2.4. Skills and Industrial Policy in the sector .............. 26 2.3 KEY STAKEHOLDERS IN THE SECTOR ............................ 27 2.3.1 National Association of Automobile Manufacturers of South Africa. .................................... 27 2.3.2 National Association of Automotive Component and Allied Manufacturers. ............................................ 29 2.3.3 The dominant trade Union—National Union of Metal Workers of SA ...................................................... 30 2.4 THE FUTURE TRAJECTORY OF THE INDUSTRY ............... 34 2.5 THE EFFECTS OF COVID-19 IN THE AUTOMOTIVE SECTOR PERFORMANCE ................................................... 36 2.6 CONCLUSION .............................................................. 38 CHAPTER THREE: THE SKILLS FORMATION SYSTEM DEBATES IN THE AUTOMOTIVE SECTOR .................................................... 40 3.1 CHAPTER OVERVIEW ................................................... 40 3.2 INSIGHTS ON TRAINING SYSTEM IN THE AUTOMOTIVE SOUTH AFRICA: THE ROLE OF NUMSA .............................. 41 3.3 INTERNATIONAL EXPERIENCE ON SKILLS DYNAMICS . 45 3.4 SOUTH AFRICA’S SKILLS DYNAMICS ............................ 47 3.5 CONTRIBUTING FACTORS TO SKILLS PROBLEMS IN THE SECTOR ............................................................................... 50 3.6 COLLABORATIONS TO ADDRESS SKILLS DEFICIT ........ 52 3.7 BROADER DEBATES ON SKILLS FORMATION LITERATURE ......................................................................... 54 3.7.1 Formal education institution-based TVET programmes .................................................................. 56 3.7.2 Non-formal workplace based training ............... 57 3.7.3 Formal dual type of training ................................ 59 3.7.4 Informal on-the-job training ................................. 60 3.7.5 Secondary school-based training ....................... 61 3.8 CONCLUSION .............................................................. 63 CHAPTER FOUR: METHODOLOGICAL DESIGN AND ANALYTICAL FRAMEWORK ................................................... 64 4.1 CHAPTER OVERVIEW ................................................... 64 4.2 OVERVIEW OF THE PROJECT ....................................... 64 4.3 RESEARCH METHODS ................................................... 66 4.3.1 Selection: Sector Identifying Process .................. 67 4.3.2 Mixed Methods ..................................................... 68 4.5 SAMPLING PROCESS AND PROCEDURES ................... 69 4.5.1 Scope of the research ......................................... 69 4.5.2 Sampling for survey process ................................ 72 4.6 DATA COLLECTION INSTRUMENTS .............................. 73 4.6.1 Survey component ............................................... 73 4.6.2 The Survey Analysis Process ................................. 75 4.6.3 Sampling for the Case Study Phase .................... 76 4.6.4 Research Instrument ............................................. 77 4.6.5 Process ................................................................... 79 4.6.6 The Case Study Analysis ....................................... 80 4.6.7 Reliability and Validity of the Research .............. 81 4.6 ANALYTICAL FRAMEWORK: THREE SET OF CONCEPTS IN DIALOGUE WITH EACH OTHER ..................................... 82 4.7. ETHICAL CONSIDERATIONS ........................................ 84 CHAPTER FIVE: INSIGHTS FROM SURVEY FINDINGS IN THE AUTOMOTIVE SECTOR ........................................................... 87 5.1 CHAPTER OVERVIEW ................................................... 87 5.2 SKILLS DYNAMICS AT A COMPANY LEVEL .................. 88 5.2.1 Skills availability ..................................................... 88 5.2.2 Effects on Company Operation and Growth .... 89 5.3 FREQUENT FORMAL PROGRAMMES AT VARIOUS LEVELS ................................................................................. 91 5.3.1 Training Programmes for MSEs ............................. 92 5.3.3 Training for Supervisors ......................................... 94 5.3.4 Training for Artisans and Technicians .................. 94 5.4.5 Training Programmes for Senior/Higher Management ................................................................ 96 5.3.6 Key Leading Institutions in the Sector ................. 96 5.4 INDUSTRIAL TRANSFORMATION ................................... 98 5.5.1 Changes in technology ....................................... 98 5.5.2 Changes in work organization ............................ 99 5.5.3 Changes in Products .......................................... 100 5.5 COMPANY GROWTH PATTERNS ............................... 102 5.5.1 Changes in Employment ................................... 102 5.5.2 Changes in Sales and Exports ........................... 104 5.5.3 Economic Inclusivity in the Sector ..................... 105 5.6 CONCLUSION ............................................................ 106 CHAPTER SIX: DOMINANT FORMS OF SKILLS TRAINING IN THE SECTOR: ANALYSIS FROM THE CASE STUDIES ............. 107 6.1 CHAPTER OVERVIEW ................................................. 107 6.2 FEATURES OF GROWING COMPANIES: ORIGINAL EQUIPMENT MANUFACTURERS (OEMs) .......................... 108 6.3 DOMINANT FORMS OF TRAINING REQUIRED FOR MSEs and HSEs FOR PRE-EMPLOYED IN THE OEMs .................. 111 6.4 DOMINANT FORMS OF TRAINING REQUIRED FOR MSEs and HSEs FOR EXISTING EMPLOYEES IN THE OEMs ........ 112 6.5 FEATURES OF GROWING COMPONENT SUPPLIERS . 114 6.6 DOMINANT FORMS OF TRAINING REQUIRED FOR MSEs AND HSEs FOR PRE-EMPLOYED IN THE COMPONENT SUPPLIERS (GROWING) ................................................... 122 6.7 DOMINANT FORMS OF TRAINING REQUIRED FOR MSEs and HSEs FOR EXISTING EMPLOYEES IN THE GROWING COMPONENT SUPPLIERS ................................................. 125 6.8 FEATURES OF THREE NOT-GROWING COMPONENT SUPLIIERS ........................................................................... 130 6.9 DOMINANT FORMS OF TRAINING REQUIRED FOR MSEs AND HSEs FOR PRE-EMPLOYED IN THE NOT GROWING COMPONENT SUPPLIERS ................................................. 134 6.10 DOMINANT FORMS OF TRAINING REQUIRED FOR MSEs AND HSEs FOR EXSITING EMPLOYEES IN THE NOT- GROWING COMPONENT SUPPLIERS .............................. 135 6.11 VARTIATIONS IN HOW COMPANIES PERCEIVE TVET QUALIFICATIONS .............................................................. 138 6.12 SHORTAGE OF TECHNICAL SKILLS ........................... 141 6.13 CONCLUSION .......................................................... 145 CHAPTER SEVEN: INDUSTRIAL TRANFORMATION DRIVES SKILLS UTILIZATION IN THE AUTOMOTIVE SECTOR .............. 147 7.1 CHAPTER OVERVIEW ................................................. 147 7.2 TECHNOLOGICAL CHANGES IN THE WORKPLACE . 148 7.2.1 Drivers of Technological Changes .................. 148 7.2.2 Technology, employment and skills .................. 153 7.3 DRIVERS OF PRODUCT CHANGES ............................ 156 7.4 DRIVERS OF WORK ORGANISATION ......................... 158 7.5 INCLUSIVE NATURE OF TRANSFORMATION .............. 160 7.6 UP-SKILLING IN THE CONTEXT OF TECHNOLOGICAL CHANGES ......................................................................... 163 7.6.1 The Union’s perception of company-based training .......................................................................... 165 7.6.2 Importance of skills levy at a company level .. 166 7.7 CONCLUSION ............................................................ 168 CHAPTER EIGHT: INDUSTRIAL GROWTH AND SKILLS NEXUS .............................................................................................. 169 8.1 CHAPTER OVERVIEW ................................................. 169 8.2 FACTORS THAT DRIVE COMPANY GROWTH ............ 170 8.2.1 Exposure to domestic and export markets ...... 170 8.2.2 Clients’ Increase ................................................. 172 8.2.3 Technological Changes .................................... 175 8.3 COMPANY GROWTH CONSTRAINTS ........................ 176 8.4 INDUSTRIAL STRATEGY AND SKILLS STRATEGY .......... 179 8.5 COMPANY GROWTH AND GENDER INCLUSIVITY .... 180 8.6 GROWTH AND EFFECT ON WORKING CONDITIONS AND PERFORMANCE ....................................................... 183 8.7 CONCLUSION ............................................................ 184 CHAPTER NINE: CONCLUSION AND RECOMMENDATIONS .............................................................................................. 186 9.1 CHAPTER OVERVIEW ................................................. 186 9.2 SUMMARY OF THE ANALYSIS ..................................... 186 9.3 REFLECTIONS .............................................................. 188 9.4. LIMITATIONS AND RECOMMENDATIONS................. 190 9.5 CONTRIBUTION TO KNOWLEDGE .............................. 191 9.5 CONCLUSION ............................................................ 194 REFERENCES ......................................................................... 196 Appendix A: Request for Permission Letter to NAACAM 227 Appendix B: Request for Permission Letter to NAAMSA .. 228 Appendix C: Information Sheet and Permision Form ...... 229 Appendix D: Information Sheet ......................................... 231 Appendix E: Survey Questionnaire .................................... 233 Appendix F: Interview Questionnaire- HR Director: Interview with representative of senior management / human resources department .......................................... 245 Appendix G: Interview Questionnaire For production management and Trade Union Representative ............. 257 Appendix H: Permission Comfirmation from NAAMSA .... 267 Appendix I: Permission Confirmation from NAACAM ..... 269 Appendix J: Ethical Clearance ......................................... 270 i DECLARATION I, Anthony Tolika Sibiya, undersigned, declare that The contribution of Technical Vocational Education and Training Formal Programmes to inclusive company growth and transformation: A case study of the automotive manufacturing sector in South Africa is my work, except where indicated, and that it has not been submitted before for any degree or examination at any institution of higher learning both locally and abroad. It is submitted in fulfilment of the requirements of the degree of Doctor of Philosophy at the University of the Witwatersrand, Johannesburg. Signed: Anthony Tolika Sibiya 12 October 2022 ii ACKNOWLEDGMENTS First and foremost, I would like to express gratefulness to Almighty God for his protection and faithfulness during the period of my study at the University of the Witwatersrand. Most importantly, I am eternally indebted to my supervisor Prof Stephanie Matseleng Allais, for her patience, guidance, critical evaluation, immense knowledge, and enthusiasm. Matseleng, as she is affectionately known, has been extraordinary generous with her valuable time and insightful ideas, and went far beyond the call of duty in her support and guidance that she provided to me during my studies at different times with detailed feedback, broad suggestions, and helpful literature necessary for my research. Working with such an insightful and knowledgeable world- acclaimed expert in the skills formation systems and changing world of work, was a great privilege which I will always treasure. Her support in structuring and reframing my arguments to make sense of what I was arguing when I was drowning in arguments and data was helpful. The Skills for Industry International team was also supportive and helpful through organizing various workshops for PhD students of different countries that constitute the project, in addition to the South African team which also played an incredible role in terms of organizing various sessions/meetings to discuss and make sense of the data and providing necessary support through various seminars and dialogues. I also want to acknowledge the Centre for Researching Education and Labour (REAL) which, through its various staff from the day I was admitted to the institution, provided me with invaluable support during the research. The REAL centre has been very supportive through organizing various internal dialogues, reading circles, and encouraging programmes such as “shut-up and write”. It has through various sources of funding played an important role during my studies and availed different platforms both locally and internationally for me to showcase my skill and talent, and most importantly connecting me with a greater and wider community in the space of skills development, skills iii formation systems, knowledge and world of work. Lastly, all my fellow students at REAL have been helpful in various ways. Prof Francine De Clercq at Wits School of education is hereby acknowledged for her generosity by reading the entire manuscript and providing me with substantial and helpful comments. I also thank colleagues from the Trade Industry and Industrial Policy Strategies for their help with the first phase of statistical analysis, in particular, Asanda Fotoyi and Dr. Neva Makgetla. In addition, thanks go to Dr Linda Duze who also supported my statistical analysis. Furthermore, Cara Hartley has been very helpful and supportive during the qualitative analysis, in particular for teaching me to use Nvivo, which I also acknowledge with a great sense of pride. The National Research Fund (NRF), through the SARChi Research Chair for Skills Development at REAL, is hereby acknowledged, and the Swiss National Science Foundation which jointly with the Swiss Development Cooperation also provided additional financial support. With deep gratitude, I appreciate the financial support. Opinions expressed and conclusions arrived at are those of the author and are not necessarily to be attributed to the NRF, Swiss National Science Foundation, Swiss Development Cooperation, or the SARChi Skills Development Research Chair. Colleagues at Nelson Mandela University, former Vice-Chancellor of the institution, Professor Derrick Swartz, and the incumbent VC, Prof Sibongile Muthwa, former DVC: Research, currently the incumbent VC of the University of Mpumalanga, Prof Thoko Mayekiso, in addition to my former director at Centre for Integrating Post-Schooling Education and Training, (CIPSET), Ivor Baatjes, Dr Mondli Hlatshwayo have been very helpful with their wise counsel during my studies. iv This research would have not been possible without the participation of various auto-component companies through industry associations, namely the National Association of Automotive Component and Allied Manufacturers (NACAAM) and the National Association of Automobile Manufacturers of South Africa (NAAMSA), in addition to members and shop-stewards of the National Union for Metalworkers of South Africa (NUMSA). In particular, thanks go to Dr Norman Lampracht of NAAMSA, and Renai Mothilal and Shivani Singh of NACAAM, in addition to MIBCO colleagues for providing me with relevant industry association latest documents and reports. Several friends, relatives, comrades, and colleagues have been part of my academic journey through their moral support or some of which commented on various draft chapters of this thesis. These include Zuko Godlimpi who accommodated me for the first three months when I arrived in Johannesburg in 2018, helped with petrol money, and many other things, Victor Kgalema, Hlumelo Ncopo, Zolisa Bavuyise Mpange, Tengo Tengela, Mthobisi Ndaba, Lucky Maluleke, Anele Dloto, Anele Nkoyi, Lufefe Mkutu, Ntuthuko Makhombothi, Yamkela Fanisi, Sandiso Maquthu, Luzuko Ntshongwana, Bongani Mabusela, Xolani Mgxotheni, Loyiso Wayise, Kwanele Majeke, Gcobisa Magalela, Ntombovuyo Linda, Alfred Stafford, Clara Molatelo Motswe, Lungile Dube, Thembinkosi Josopu, Onke Mpahlwa, Siphumzo Maqabuka, Kgotsofelag Letlapa, Monwabisi Ncayiyana, Andrew Matima, Vuyolwethu Mditshwa, Stanford Chinyayi, Momelezi Mbedla, Sifiso Mqathu, Andrew Chirwa, Unathi Lutshaba, Zanoxolo Goodman Wayile, Abongile Tsotsi, Nkosinathi Jikeka, Dr Siphelo Ngcwangu, Dr Alex Mashilo, Dr David Masondo, Dr Zamani Saul, Dr Nceba Nyembezi, Prof David Bogopa, Dr Siviwe Mditshwa, Dr Bongani Maqabuka, Dr Mawethu Zuka, Dr Thobekile Qabobo, Dr Izzuna Anyikwa, Dr Thando Nomarwayi, Prof Mzikayise Binza, Prof Willie Chinyamurindi, Dr Francis Murona, Dr Emmanuel Ojo, Dr Legg Jack, Dr Hlalefang, Dr Mbuso Nkosi, Prof Ismail Largadien, Prof Peter Cunningham – the list is endless. To you comrades, friends, and colleagues you have been my source of strength and v inspiration and I feel very fortunate to have you around, and I thank you for being patient with me where I was unable to attend social and political activities throughout this journey. Most importantly thanks to my wife, Pamella; my kids Alwando, Siseko, Qhawe, and Athandwa who is also affectionately known as Ntombi-ntombi; whose forbearance made it possible for me to finish this research. I dedicate this thesis to all my kids, to whom I owe everything. Finally, thanks to my mother (Dushiwe), and siblings for their understanding and support. Many thanks to everyone. vi ACRONYMS AND ABBREVIATIONS AC Automotive Council AIEC Automotive Industry Export Council APDP Automotive Production Development Programme ASC Automotive Skills Council ASCCI Automotive Supply Chain Competitiveness Initiative ASDC Automotive Skills Development Council Auto Automotive Sector BRICS Brazil, Russia, India, China, and South Africa CBU Completely Built-Up CSR Corporate Social Responsibility DHET Department of Higher Education and Training DTI Department of Trade and Industry FRIDGE Fund for Research Industrial Development, Growth, and Equity GDP Gross Domestic Product GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit HEIs Higher education institutions HSRC Human Social Research Council ILO International Labour Organization IPAP Industrial Policy Action Plan MIBC Metal Industry Bargaining Council MerSETA Manufacturing, Engineering and Related Services Sector Education and Training Authority (merSETA) MIDP Motor Industry Development Programme MISA Motor Industry Staff Association MNCs Multi-National Corporations NAFTA North America Free Trade Area NAACAM National Association of Automotive Component and Allied Manufacturers vii NAAMSA National Association of Automobile Manufacturers of South Africa NCV National Certificate Vocational NDP National Development Plan NEDLAC National Economic Development and Labour Council NQF National Qualifications Framework NRF National Research Fund NSF National Skills Fund NSDS National Skills Development Strategy NUMSA National Union of Metalworkers of South Africa OECD Organisation for Economic Co-operation and Development OEMs Original Equipment Manufacturers OICA Organisation Internationale des Constructeurs’ Automobiles’ (PC4IR) Presidential Commission on the Fourth Industrial Revolution PLC Programmable Logic Controller PSET Post-Schooling Education and Training R&D Research and Development RMI Retail Motor Industry SA South Africa SAAM South African Automotive Masterplan SAYC South African Youth Council SETA Sector Education and Training Authority Stats SA Statistics South Africa SSP Sector Skills Plan TIPS Trade Industry and Industrial Policy Strategies TVET Technical Vocational Education and Training UK United Kingdom VSD Vocational Skills Development WB World Bank viii TABLE OF FIGURES Figure 1: Map of South Africa .................................................................................. 69 Figure 2: Map of the Eastern Cape ........................................................................ 69 Figure 3: Map of Kwa Zulu Natal ............................................................................. 70 Figure 4: Map of Gauteng ....................................................................................... 71 Figure 5: Skills Availability in the sector ................................................................... 89 Figure 6: Effect of lack of technicians on operations and growth .................... 90 Figure 7: Shortage of supervisors has negative effect on company operations ..................................................................................................................................... 91 Figure 8: General Workers and Operators ............................................................ 92 Figure 9: Feeder Institutions to automotive companies ..................................... 97 Figure 10: Changes in Technology ........................................................................ 99 Figure 11: Changes in Work Organization ........................................................... 100 Figure 12: Changes in Products............................................................................. 100 Figure 13: Changes in Worker Skills ....................................................................... 101 Figure 14: Employment Changes .......................................................................... 102 Figure 15: Changes in Wages and Salaries ......................................................... 103 Figure 16: Sales Increase ........................................................................................ 105 Figure 17: Gender Inclusivity in the sector ........................................................... 105 ix ABSTRACT This thesis investigates the contribution of formal Technical Vocational Education and Training (TVET) programmes to inclusive industrial growth and transformation in the automotive manufacturing sector in South Africa. The thesis argues, based on the survey and case studies, that the role skills play is an addition role, not central one, in industrial growth. Industrial growth is rather driven by other contextual factors, namely, exposure to domestic and export markets, increase in clients, healthy relations in the workplace, and changes in technology and industrial policy. It is through these factors that skills play a role. Similarly, industrial transformation is not driven by skills, but rather by factors such as the clients' product demands and specifications; the national industrial/sectoral policy; research and innovation expertise from company headquarters often outside South Africa; global market forces and price volatility; new regulations on emission(s) demanded by the government; and competition amongst components. Thus as a contribution to existing literature, I argue that there is a need to consider and recognize company level factors that are critical in shaping the skills system if we are to understand the extent to which skills enhance growth and transformation. Moreover, the findings challenge the current formal TVET provision policy in South African which does not seem to recognize or incorporate other forms of provision in which skills can be acquired, i.e., informal- on the job training, non-formal company based training, in addition to formal institutional based training. KEY WORDS: TVET SKILLS; INCLUSIVITY; COMANPY GRWOTH; TRANSFORMATION; INDUSTRIAL POLICY; FORMAL, INFORMAL AND NON-FORMAL SKILLS TRAINING 1 CHAPTER ONE: INTRODUCTION OF THE RESEARCH STUDY 1.1 CHAPTER OVERVIEW This research investigates the contribution of formal technical vocational education and training (TVET) programmes to inclusive company growth and transformation in the automotive manufacturing sector in South Africa. I chose the automotive manufacturing sector as the case study because of its importance in the country’s economy in terms of Gross Domestic Product (GDP) contribution, employment creation, sales, and exports (Meyer, 2016). The automotive sector has been the focus of considerable national industrial policy and targeted government support incentives post-1994 democratic breakthrough (Barnes & Black, 2013; Lamprecht, 2009; Masondo, 2018). Given the important role of industrialization in economic development, policymakers, particularly in middle-income countries who wish to develop and expand their economies, see the role of TVET programmes to company- level growth and transformation as important. The South East Asian countries like Japan in the 1950s, South Korea in 1960, and China in the 1980s, are amongst the countries who seem to have pursued industrialization to address the high levels of unemployment, poverty, and inequality (Gumede, 2008, 2009, 2011; Mkandawire, 2001). The South East Asian economies seem to exemplify patterns of success with far-reaching experience of industrialization and structural changes, especially for the low and middle-income countries around the world (Gumede, 2009; Mathebula, 2016; Turok et al., 2018). Samouel and Aram (2016) argue that a well-trained and qualified workforce with requisite technical skills is more adept to withstand workplace pressures. Moreover, research in the human capital tradition links education with individual productivity. 2 Vocational education programmes have gained prominence and unprecedented traction in middle-income countries, becoming a priority for government and donors. I have undertaken this research to understand how and to what extent formal TVET programmes contribute to inclusive company- level growth and transformation, given the prioritization of vocational training not only in South Africa but the world over. Gender inclusivity is critical to understand the extent to which women have been considered at the point of hiring, especially when companies are growing, and how skills bridge the gap in the workplace. Moreover, there seems to be acknowledgement in the literature that addressing the gendered nature of employment in the South African workplace over and above the automotive industry is the fundamental thrust of the economic transformation restructuring. Illustrating the economic transformation argument, the former Minister of Trade and Industry, Davies (2018) accedes that employees in the auto sector must broadly be representative of the democratic profile of society in terms of race and gender. To address the structural fault-lines in the South African economy is to eliminate systematically the race-centred economic ownership and control of the companies in the sector; and to introduce effective tools to curb unemployment, poverty, and inequality, which are additional barriers to the growth of women employment (Davies, 2018; Department of Trade and Industry, 2018). I particularly focused on formal pre- employment and in-employment programmes held by five categories of employees, namely, operators and general workers, which I categorized as mid-level employees; and artisans/technicians, supervisors and higher management, which I categorized as higher-skilled employees. This is to test if there is a relationship between skills and company growth and transformation in the automotive industry. 3 Additionally, I wished to determine whether training programmes focusing on high skills are more significant than others and which specific programmes are seen as most relevant by companies. 1.2 DEFINITION OF CONCEPTS IN THE STUDY These concepts below are utilized throughout this research well to mean the following: Growth: In this research I am not using the term economic growth, which is about an increase in products produced over a period, often measured in terms of income increase, or adjusted inflation GDP per capita. I am specifically interested in company level growth, which refers to changes in employment, salaries, and sales and export. This definition of company growth is also consistent in how literature describes it in the context of the automotive sector (Meyer, 2016). Inclusivity: refers to the changes in the workplace in terms of gender, working conditions, and or employee wellness. The gender parity in employment is crucial to understand the extent to which women have been considered at the point of hiring especially when companies are growing, improved working conditions for workers, and wellness. I use the concept of inclusivity to measure the extent to which company growth has improved wellness and working conditions, how it benefited women and historically disadvantaged persons. The term transformation is not used in its broadest sense in terms of fundamental changes in the economy in relation to ownership and control. It is used in the study to refer to workplace changes in terms of technology, work organization, and product change. Automotive manufacturing: The focus is mainly on the manufacturing companies both the original equipment manufacturers (OEMs), and component supplier manufacturers in the automotive sector. 4 1.3 CONTEXTUAL BACKGROUND OF THE STUDY My research is located in a multi-country skills research project underway in six countries with contrasting economic development features namely, Bangladesh, Cambodia, Ethiopia, Laos Vietnam, and South Africa. This research project seeks to examine the critical factors that support or impede the role that the vocational skills development (VSD) programmes play in inclusive industrial growth and transformation in at least two manufacturing sectors per country. The South African component of the project focuses on three manufacturing sectors: automotive, clothing and textiles, and food and beverages, because these three sectors are crucial in the country’s economy and prioritized by the South African government through national industrial policies and other support programmes and incentives. The focus of my research is the automotive manufacturing industry. The industry is one of the important sectors in the South African economy in terms of employment, GDP contribution and exports (Meyer, 2016). It has been steadily growing and contributed about 6.4% of the overall GDP in 2019; it creates numerous jobs, and plays an important role in the export market in terms of sales thus facilitate a positive presence in the global economy (Automotive Industry Export Council, 2019). The automotive industry has also been the focus of considerable national industrial policy and targeted government interventions post the 1994 democratic breakthrough (Automotive Industry Export Council, 2020; Barnes et al., 2018; Black et al., 2018; Mashilo, 2019; Masondo, 2018). The emergence of the Coronavirus in early 2020 has negatively affected broader industry’s contribution to the GDP, which stood at 4.9%, with manufacturing standing at 2.8% and retail having 2.1%, which is a decrease as a result of lockdown restrictions imposed by President Cyril Ramaphosa (NAAMSA, 2020). However, my research was conducted prior to the COVID-19 pandemic, when the industry’s performance was stronger. 5 1.4 INDUSTRIALIZATION AND ECONOMIC GROWTH South Africa is categorized as a middle-income country, although still unequal in global standards, with very high levels of unemployment, poverty and inequality (Statistics South Africa, 2020). Thus, growing the economy through an economic reconstruction and recovery plan is an important priority for South Africa to address these socio-economic issues, which have been worsened by the coronavirus pandemic (hereafter COVID-19). An extensive body of literature on developmental economics suggests that central to economic growth is industrialization which is seen as a catalyst for job creation, boosting economic growth, and thereby reducing socio- economic challenges (Budlender, 1999; Hauge & Chang, 2019; Kniivila, 2007; Marichen & Ignatius, 2015; Maurer et al., 2017; Mkandawire, 2001; Samouel & Aram, 2016; Woolard, 2002; Zalk, 2014b). Although industrialization is often criticized for the destruction of nature in terms of air pollution, water shortages, and land and solid waste pollution (Li, Li, and Zhang, 2018), it nonetheless continues to be crucial for economic growth. Dong, Wang, Su, Hua, and Zhang (2019) for instance support the notion of industrialization for economic development; however, they assert that it is also a determinant of the variation in the environmental quality as the economy expands. In the context of South Africa, the industrialization process has been dominated throughout history by the mining industry (Chabane et al., 2006; Fine & Rustomjee, 1996). The discovery of gold and diamonds in the 19th century led the industrialization process in South Africa, thus is argued to have been mining dominated, also referred to as mineral and energy complex (Bell & Farrell, 1997; Takala, 2008). As explained above, industrialization is broadly perceived as crucial to addressing the prevalent socio-economic challenges that are still persistent post the democratic transition of 27 years (Budlender, 1999; Green, 2009; Marichen & Ignatius, 2015; Zalk, 2014b). Although the political breakthrough of 1994 allowed significant changes in the workplace and access to skills as part 6 of the democratization project, the legacy of apartheid persists (Ngcwangu, 2014). Furthermore, trade and liberalization which came as a result of democracy, and acceptance of the country to the global value chain, led to tariffs reduction, and has had a huge impact on the country’s ability to industrialize, despite many attempts by the government to do so through industrial programmes (Guyer, 1998). Notwithstanding the challenges, Zalk (2014a) suggests that industrial strategies are important for the South African economy to enhance industrial growth on a large scale. This argument of industrialization-led growth that South Africa must undertake is also supported by the international literature on developmental political economy, which shows that even the highly advanced economies in the world have undertaken industrialization on a large scale (Cheon, 2014; Hauge & Chang, 2019; Johnson, 1982; Kniivila, 2007; Wade, 1990). Effective development and deployment of skills in the context of industrialization appear to be an important ingredient, in addition to industrial policy (Laseinde & Kanakana, 2017). The International Labour Organization (2021) asserts that skills have changed the lives of young people for the better in countries like Bangladesh and Haiti. Laseinde and Kanakana (2017) argue that skills are essential in the context of industrial development because they are linked to employment and the growth sustainability of the industry. They argue that the role of skills is important to guarantee the sustainability of the growth of the automotive industry both locally and internationally. Thus, restructuring education and training systems is a policy priority in many countries around the world. In this context, rethinking the relationship between supply and demand is crucial to understand the extent to which skills play a role in the economy. 7 A focus on skills has been important in industrial policy in the South African automotive sector, particularly the Automotive Production Development Programme (APDP). The Automotive Production Development Programme is the production incentive scheme for the motor industry, aimed at promoting production volumes in the specified motor vehicle industry, and promoting added value in the automotive component industry, thus creating employment across the automotive value chain. It came into effect in 2013 replacing the Motor Industry Development Programme (MIDP). The latest industrial policy framework, the South African Automotive Masterplan 2020-2035 (SAAM) which is referred to as APDP part 2, also places importance on skills development to achieve growth and sustain global competition (Barnes et al., 2018). These policies are discussed in more detail in Chapter 2; for now the important point is that skills have been seen as important to improve growth in the form of productivity and competitiveness, halve unemployment, and improve wages. 1.5 RESEARCH PROBLEM Industrialization is seen as crucial for economic growth and thereby reducing unemployment, poverty, and inequality. The automotive sector remains essential to South Africa’s industrialization, and has been growing and supported through national industrial policy. Economic development theories as well as national policies have emphasized the critical role that skills play in driving industrialization for both social and economic development, in particular in developing countries (Guadagno, 2012; International Labour Organization, 2021; King, 2013; Lall, 2013; Laseinde & Kanakana, 2017; Maurer, 2011; Maurer et al., 2011). Vocational skills programmes have gained prominence and unprecedented traction, becoming an apex priority for governments in developing countries (Afeti, 2018; Baatjes et al., 2014; Wedekind, 2014; King, 2013). As a result, the 8 donor funding towards vocational skills appears to have also expanded over the years to support industry-based skills, in particular, export-oriented manufacturing (King, 2013; Lall, 2013; Maurer et al., 2017). King (2013) argues that developing vocational skills has become an important priority to address socio-economic issues on one hand, and industry skills on the other hand, especially export-oriented manufacturing sectors. However, there seems to be a gap in the literature on how these skills programmes help companies to grow or even transform, besides being critical to addressing employment challenges. In South Africa, TVET programmes have been identified as a catalyst to address unemployment amongst the youth, poverty, and inequality (Department of Higher Education and Training, 2012, 2014, 2014; Kgobe & Baatjes, 2014), and have gained prominence in government policy, plans, and public debate (Baatjes et al., 2014). Wedekind (2014) argues that there is hardly a day without a government official or political figure speaking about a necessity to strengthen the education system, without mentioning the importance of skills and vocational education and training. But there is insufficient insight into the role that skills are actually playing in the transformation and growth of industrial sectors. In most instances, impact evaluation literature that focus on skills training programmes look at how education and skills benefit individuals in terms of employment and income, with little analysis of how these skills programmes help companies to drive economic growth and their inclusive transformation (Maurer et al., 2011, 2017). My study therefore investigates the contribution of formal TVET programmes to growth and transformation at a company level in South Africa, situated in the automotive sector, and the interaction between skills on the one hand, and transformation and growth on the other. 9 1.6 RESEARCH AIMS AND OBJECTIVES In this research, I explore the role that Technical Vocational Education and Training programmes play in inclusive company-level growth and transformation in the automotive sector in South Africa. The focus is on formal skills programmes held pre-employment as well as those acquired in employment in the five years from 2014 to 2019. For the survey process, I have considered five categories of employees: operators, general workers, artisans/technicians, supervisors and higher management employees, with the aim of exploring the relationship between formal training programmes and company-level growth and transformation. In the interviews, I focused on mid-skilled employees (MSEs) and high skilled employees (HSEs), both of which are critical in the production line and maintenance. The aim for the case studies was to determine whether formal training programmes focusing on high skills are more significant than others and which specific skills programmes are seen as most relevant by companies. 1.7 RESEARCH QUESTIONS What are companies’ perceptions of the contribution of formal Vocational Education and Training programmes to industrial transformation and inclusive growth? Research sub-questions: 1. To what extent do formal TVET programmes contribute to company growth and transformation? 2. Are Technical Vocational Education and Training programmes that focus on higher skill levels more likely to contribute to inclusive company growth and transformation? 3. Do formal pre- and in-employment training programmes help companies regarding skills needs? 10 4. What are the underlying factors that shape or influence skills contribution to company growth and transformation? 1.8 RESEARCH RATIONALE The rationale for this study lies primarily in the fact that vocational skills programmes have gained noticeable prominence and have become a priority for governments in developing countries (Afeti, 2018; Baatjes et al., 2014; Wedekind, 2014; King, 2013). Consequently, the international agencies for donor funding towards vocational skills appears to have also expanded over the years to support industry-based skills, in particular, export-oriented manufacturing (King, 2013; Lall, 2013; Maurer et al., 2017). The expansion of vocational skills programmes is premised on the fact that skills play an important role to address socio-economic issues on one hand, and industry skills on the other hand, especially export-oriented manufacturing sectors (King, 2013). Moreover, skills appear to play a crucial role in driving industrialization for both social and economic development, in particular in developing countries (Guadagno, 2012; International Labour Organization, 2021; King, 2013; Lall, 2013; Laseinde & Kanakana, 2017; Maurer, 2011; Maurer et al., 2011). In the context of South Africa, Ngcwangu (2016) argues that there has been policy changes, legislations enacted and institutions being established to drive skills training for the population for workplace purposes. However, much less in known about how skills actually contribute to inclusive growth and transformation of industrial sectors. The existing impact evaluation literature that often focuses on skills training programmes look at how education and skills benefit individuals in terms of employment and income, with little analysis of how these skills programmes help companies to expand and introduce workplace changes in technology and product (Maurer et al., 2011, 2017). This research sought to understand companies’ perceptions of the contribution of formal Vocational Education 11 and Training programmes to industrial transformation and inclusive growth. It attempts to close a gap in the literature on the extent to which skills play a role at a company level in growth and transformation. Furthermore, it generates new insights on the extent to which skills help companies to inclusively grow and transform, and identify the contextual factors that are perceived play an for skills regime at a company level. In addition, to gain insight into the formal TVET programmes, which are the most valued by companies, which could be useful for consideration by educational institutions such as Technical and Vocational Education and Training Colleges. It argues that the role these formal TVET programmes play at various occupational levels in the company, and how they are utilized, has policy implications on whether to shift focus on the higher, or lower TVET programmes that companies perceive as necessary and relevant t for their growth and transformation. 1.9 SIGNIFICANCE OF THE RESEARCH The research contributes to the debates around the relationship between skills and company growth and transformation, which is critical in the realm of skills, knowledge, and work discourse, in South Africa and elsewhere. Understanding the role of skills at a company level is crucial in the context of the demand and supply notion, for skills to play a role in the economy. As a component of a broader project, the study also contributes to building international comparative insights into education policy/ skills policy and industrial strategy as well. Understanding the extent to which skills contribute to growth and transformation, and factors that shape skills contribution to company growth, are quite crucial in shaping policy framework in South Africa. 1.10 OVERVIEW AND OUTLINE OF CHAPTERS In Chapter 1, I have introduced the study, explaining that the focus of the research is to understand the relationship between skills and inclusive company growth and transformation in the automotive sector in South Africa. 12 I explained that this is important because of the automotive sector’s contribution to the South African economy, and that industrialization is widely argued to be crucial for economic development. Further, skills development is seen as important for industrialization and development, but there is insufficient research into the role of skills in contributing to company level development and growth. In Chapter 2, I review the literature on the South African automotive industry and its contribution to overall economic performance in South Africa. The literature shows that industrial policy has been central to the revival and growth of the sector. It further shows that despite the steady progress, the industry was not spared by COVID-19, which negatively affected the demand and supply. Chapter 3 reviews the literature on skills for the manufacturing sector. The literature shows that the relationship between education and economy is complex, and my research confirms the complexity and argues that to understand the relationship between education, knowledge, and work there are crucial factors that play an influential role that should be considered as they shape skills formation system at a company and sector level. It argues that contextual factors - social, economic, political, and cultural - are significant for skills to contribute to the work organization in the production and economy at large. The research confirms these factors and is much more specific about how they relate at a broader level. In Chapter 4, I explain my methodological design for data collection and analysis. I have created these key concepts into a relationship with each other to understand the extent to which they contribute to industrial growth and transformation. In Chapter 5, I analyze the survey results which indicate that skills are crucial for companies, but are not the sufficient conditions for growth and transformation. 13 In Chapter 6, I present an analysis of the dominant forms of training emerging from the 11 company case studies. The chapter shows that although formal training is important for employment, vocational training takes place in-house and is mainly non-formal. This informal on-the-job training, learnership and apprenticeship programmes, and induction training are seen as more valuable in terms of addressing company-specific skills needs. The chapter shows variations in how companies perceive TVET programmes, with the majority of component suppliers perceiving it to be poor and weak in terms of quality they need. Chapter 7 shows that transformation at a company level is not driven by skills but by the national industrial policy, the clients’ product demands and specifications, price volatility, and global market dynamics as well as competition. It is through these factors – particularly technology and industrial policy – that skills play a role. In Chapter 8, I show that company growth (which has been inclusive in terms of gender as companies have employed women at mid-skilled level and high skilled level) has also not been driven by skills but by technology, customer product demands and specifications, national industrial policy, competition, work organization – all of which shape skills contributions. In Chapter 9, a conclusion chapter, I reflect on the literature in relation to findings. The literature review showed how industrial policy has supported industrial transformation and growth. It is encouraging that representatives from all companies discussed confirmed that recent national industrial policies have encouraged and supported skills training. Recent industrial policy supports training, as well as supporting companies to change technology, increase employment, and sales and exports. My study was not testing the implementation or success of industrial policy per se. Nonetheless, it offers some insights into this issue, as representatives of all companies spoke about its crucial role in supporting their survival or growth. Given the policy encourages 14 and supports companies to introduce and adopt new technology to remain internationally competitive, and given that I have established that skills are seen as important once technology has been introduced, I can infer an indirect relationship between skills and industrial policy in the automotive sector. The literature reviewed also showed that new technological changes have rather led to reskilling and upskilling in the workplace. It is encouraging that senior management in all companies and the majority of trade unions representatives discussed confirmed that change in technology led to upskilling and reskilling rather than application of section 189 (retrenchment), although three trade union representatives had different views from the rest. Given that changes in technology drives upskilling and reskilling of workers, and more component suppliers also require solid formal qualification even for supervisors, I can infer an indirect relationship between skills and changes in technology and work organization in the automotive sector. In terms of inclusivity in the automotive sector, there is a shift towards inclusivity in the sector, both in terms of hiring more Black African workers in skilled positions and in terms of women making inroads into the sector. I could not find evidence that skills were driving this shift. It seems from my study that inclusivity is primarily driven by employment equity legislation; it also seemed as if companies recognize the social imperative for inclusivity and there seems to be a consensus between senior management and trade union representatives that women's participation especially at a higher level is still not at a desirable level. More broadly, the literature showed that skills is complex. Skills are acquired in different ways and skills vary even within companies with similar economic indicators. It’s interesting that all companies discussed confirmed that beyond formal qualifications which contribute to skills needs to a certain degree, there are other, different types of training, most of which are non-formal and company-based seen as crucial for skills needs i.e., induction training, informal 15 on-the-job training, formal dual training for MSE and HSE, and secondary schooling certificate. 16 CHAPTER TWO: CONTEXT: THE ROLE OF AUTOMOTIVE INDUSTRY IN THE SOUTH AFRICAN ECONOMY 2.1 CHAPTER OVERVIEW In this chapter, I discuss the role of the automotive manufacturing sector in the South African economy. To do this, the chapter is divided into six sections. The first section reflects on the control and ownership patterns in the industry, arguing that before the political breakthrough foreign control was quite minimal, and in some instances, there was a mixture of ownership in the 1990s with the majority of firms owned locally. However, post-1994 this picture completed changed, and the literature seems to attribute this to the integration of the South African economy and rapid increase in exports which is seen to have paved the way for foreign dominance and control. While others argue that the industrial policy has facilitated foreign dominance in the industry, thus the majority of companies are foreign-owned. Second section reflects on the industry performance in the country’s economy showing that significant structural changes have taken place in the industry post-1994. The section argues that the national industrial policy, the Motor Industry Development Programme (MIDP) established in 1995, laid the foundation and contributed to the stable growth of industry both in the domestic and global markets. This is so in terms of employment increase (although it is still male- dominated), and sales and exports, all seen as crucial to achieve economies of scale and maintain global competitiveness. In the third section, I discuss the different industry stakeholders, namely NAAMSA, NAACAM, and trade unions for their strategic role in the overall direction of the industry and the economy as a whole. I show in this section that there is relative degree of coordination between employers’ associations and unions in the automotive sector in South Africa. In section four I reflect on technological changes in the sector, showing that automation is the future in the sector and is central to the sector’s growth, sustainability, and stability to compete at a global level. There seems to be a 17 consensus in the policy reports, government documents, and the literature that technological changes in the industry require a new set of skills. My research was conducted prior to the COVID-19 pandemic. I therefore only very briefly reflect on the negative impact of the pandemic on industry performance. 2.2 THE ROLE OF AUTOMOTIVE IN SOUTH AFRICAN ECONOMY The automotive sector is important in the South African economy, accounting for 6.8% of Gross Domestic Product growth in 2018 (Davies & Vincent, 2020; Davies, 2018; Deloitte, 2019). When looking at the overall picture in manufacturing broadly, the GDP share stood at 11.8% in the same period, and the industry contributed a significant share of the entire manufacturing capacity (Automotive Industry Export Council, 2018, 2019, 2020). Since 1995 with the establishment of the MIDP, the first national industrial policy in the sector post-1994, there has been a steady growth in terms of exports and sales and employment (Meyer, 2016). This growth and performance of the industry were acknowledged by President Zuma in his state of the nation address when outlining the initiatives meant to boost and incentivize the automotive industry, which at the time had attracted five billion rand of investments over the previous five years (The Presidency, 2016). This is in stark contrast with the broader manufacturing sector in South Africa. Black, Craig, and Dunne (2018) argue that the performance of the manufacturing sector compared to other countries has been poor since the early 1990s. The Department of Trade and Industry (2018) also acknowledges that the manufacturing sector is extremely poor by global comparison, especially when compared to the East Asia and Pacific region as well as other middle-income countries. It has been under severe strain as its gross domestic product has declined over time to about 13.2% in the last three years compared to almost 25% in the 80s. Despite the poor performance of the manufacturing sector as a whole, there is consensus in the literature that significant structural changes have taken place in the automotive industry post-1994 and the MIDP is seen to 18 have contributed immensely in this regard (Barnes & Kaplinsky, 2000; Black, 2009; Fund for Research Industrial Development, Growth and Equity, 2005; HSRC Automotive Industry, 2008; Lamprecht, 2009; Mashilo, 2010). The structural changes have had significant impact with backward and forward linkages within the primary, secondary, and tertiary sectors that stimulate economic spinoffs and multiplier effects on the local economy (Numsa, 2016). The labour union, NUMSA, which plays an important role in the manufacturing industries in South Africa acknowledges the industry’s significance in the South African economy, particularly the Original Equipment Manufacturers (OEMs), in terms of employment creation and compensation, government revenue, exports, and capital investments (Numsa, 2016). This reflects the power of combining good industrial policy and foreign investment as necessary ingredients in ensuring greater economic growth (Gastrow, 2012). The first industrial policy, introduced in 1995, was the Motor Industry Development Programme (MIDP), which is acknowledged for having revised and stabilised the automotive manufacturing sector in South Africa (Automotive Industry Export Council, 2014 2017, 2018, 2019, 2020; Lamprecht, 2009). Black (2009) argues that the MIDP was established to reduce the tariffs to 40%, especially for light and commercial vehicles; and reduce by 30% the tariffs for components and parts by 2002. Barnes & Black (2013) argue that the light cars manufacturers for the local market were entitled to a duty-free allowance, and components to the figure of 27% of the wholesale price of the car could be imported duty-free. The MIDP is acknowledged for having gradually phased off tariffs leading to more exports incentives to improve the local industry’s global standard in terms of competitiveness and affordability in the domestic market that also stabilized employment (Department of Trade and Industry, 2007a, 2007b, 2009; Mashilo, 2010; The Department of Trade and Industry, 2007a, 2007b, 2012). 19 As a result, the domestic production of vehicle models has been significantly rationalized to achieve increasing economies-of-scale benefits in the domestic and export markets (Barnes & Black, 2013). The mandate of the MIDP was to drive export development, lower production costs, enable wide access to both domestic and international markets by ensuring that South Africa becomes the export base, and also increase investment (Barnes & Black, 2013; Barnes & Kaplinsky, 2000; Black, 2001, 2011; Black & Mitchell, 2002; Fund for Research Industrial Development, Growth and Equity, 2005; HSRC Automotive Industry, 2008; Masondo, 2018). This did not only improve employment growth but the GDP also increased from 5.7% in 2002 to 6.4% a year later (NAAMSA, 2004). The industry has been steadily growing since then and is regarded as the backbone of the South African economy with regards to employment, economic development, GDP contribution, sales, and exports (Automotive Industry Export Council, 2014, 2017, 2018; Meyer, 2016; The Presidency, 2016). It is seen to have established itself to be fully equipped and capable to compete globally and this is attributed to the industrial policy adopted in 1995 (Meyer, 2016). The Automotive Production Development Programme (APDP) is the second industrial policy, replacing the MIDP and having the aim to increase production volumes in the motor vehicle (Automotive Industry Export Council, 2014; Barnes et al., 2018; Masondo, 2018). NAACAM (2019b) indicates that the APDP was introduced to create a conducive environment that enables registered OEMs and component suppliers to significantly increase production volumes, and thereby create employment across the automotive value chain. Despite APDP efforts to grow production volume, the industry is still regarded as a global tier 2 as it still produces below the target of one million vehicles per annum (Barnes et al., 2018). 20 The newly adopted South African Automotive Masterplan (SAAM) for 2020- 2035, the APDP part 2, is the third policy framework geared towards improving the domestic industry's global standards in terms of competitiveness and stimulate production to reach at least 1% vehicle production of global output by 2035 (Barnes et al., 2018). The SAAM has set itself a target to yearly produce 1.4 million cars at an aspirational 60% local content by 2035, accompanied by improving productivity. This alone should increase employment and contribute to the country’s economic trajectory. The long-term mission of the automotive master plan is to drive automotive growth, upgrade the technological base, and improve competitiveness all of which are centred on job creation (Trade and Industrial Policy Strategies, 2019). 2.2.1 Control and Ownership Patterns This section reflects on the control and ownership patterns in the industry, arguing that before the political breakthrough foreign control was quite minimal, and in some instances, there was a mixture of ownership in the 1990s with the majority of firms owned locally (Barnes, 2013; Ngcwangu, 2016). However, post-1994 this picture completed changed, and the literature suggest that the integration of the South African economy and rapid increase in exports have paved the way for foreign dominance and control; and also the industrial policy is seen to have facilitated foreign dominance in the industry, thus the majority of companies are foreign-owned (Barnes, 2013, 2013; Fund for Research Industrial Development, Growth and Equity, 2005; HSRC Automotive Industry, 2008; Lamprecht, 2009; Mashilo, 2010, 2010, 2019; Masondo, 2018; Ngcwangu, 2016). The foreign ownership patterns and control of the automotive manufacturing sector especially around the mid-1990s before the 1994 democratic dispensation were quite minimal in the assembly plant manufacturers and components suppliers (Barnes, 2013; Lamprecht, 2009). (Barnes, 2013; Ngcwangu, 2016) argue that there was a mixture of 21 ownership in the 1990s with the majority of firms owned locally. Lamprecht (2009) agrees that there was very little foreign presence in the auto industry in the early 1990s apart from the direct German equity in two original equipment manufacturers (OEMs). The original equipment manufacturers except BMW and Volkswagen were to a greater extent owned by the South African companies albeit functioning under the franchise agreements with parent companies (Masondo, 2018; Ngcwangu, 2016). Since the existence of the automotive industry in South Africa in the 1920s, the two German vehicle manufacturers were the only two companies who continued to operate as wholly controlled subsidiaries, whilst the rest of OEMs were owned locally and encouraged partnership with components manufacturers (Barnes, 2013; Lamprecht, 2009; Mashilo, 2019; Ngcwangu, 2016). However, the integration of the South African economy to the global economy, especially after sanctions ended, led to the rapid increase in the export market which paved foreign control and dominance (Black, 2011). The Motor Industry Development Programme as the new industrial policy framework could be argued to have facilitated the dominance of international companies in the sector post-1994 as most if not all vehicle manufacturers have become fully integrated into the global network established by their foreign parent companies (Lamprecht, 2009). Black (2009) argues that presently, all OEMs are exclusively under the control and ownership of the multinational companies, with headquarters outside South Africa. The fundamental shift towards foreign ownership commenced around 1995, which was the same year the MIDP was established. Barnes (2013) argues that it was to be expected given the limited size of the domestic market, and the Automotive Production Development Programme (APDP) introduced in 2013 is unlikely to shift ownership trajectory. He does, however, acknowledge that ownership drastically changed in the late 1990s, thus Original Equipment 22 Manufacturers (OEMs) are now Multi-National Corporations, and leading major part components firms were foreign-owned around 2010. This foreign ownership extends to component supplier firms with mainly major components firms that have employees over 500 also under foreign control. There is another perspective, which suggests that the changes with regards to ownership and control were driven by economies of scale pressures, pricing, the technology advances, which re-organized production capacity, that enhanced the Multi-National Corporations’ control of the domestic auto industry (Barnes & Kaplinsky, 2000; Barnes, 2013; Black, 2011). Domestic firms had to adapt to the changing competitive outlook and forge alliances at an international level (Barnes, 2013). This trajectory suggests that investment decisions and compliance to quality standards are now determined out of South Africa as the country in which these subsidiaries are operating. Masondo (2018) argues that the major operation of the domestic auto companies which are subsidiaries is to manufacture and assemble automobile products, whilst research and development, design, and decisions on new and latest technology are implemented outside South Africa by countries of companies’ origin. The foreign control gives the company wider options to locate their production in different parts of the world based on low costs related to production and access to markets (Barnes, 2013; Masondo, 2018). Masondo argues no efforts were made by the ANC government to at least control the decision on investments of the different OEMs, except only using the 1995 industrial policy programme (the MIDP) to incentives these companies to produce for exports under mutual agreements which still expected the state to support it to compete globally. As result, Masondo (2018) argues companies can on their own fundraise and mobilize financial resources outside the country with no recourse to the country’s state. For him, the democratic government had somehow dropped the ball by not exerting necessary pressure and discipline 23 on the OEMs to increase investments and reduce car models to achieve economies of scale. Thus, He doesn’t see the industrial policy as a successful policy in part because it enabled the OEMs to import components on duty free at the same time subsiding transportation costs to markets that are located far from South Africa. For him, the auto investment between 1996 and 2010 could be associated with the interest to capture the local market and at the same time maximize export gains with the industrial policy. Mashilo (2019:23) argues that access opened by the MIDP led to OEMs which are foreign-owned to put pressure on company level upgrading as a pre-condition in awarding components manufacturing contracts, investments in their local subsidiaries, which entail allocation of new models and production volumes. Barnes (2013) concurs that importers had gained access to the local market in line with the MIDP, hence placing a new set of demands on South African subsidiaries. 2.2.2 Employment Outlook in the Sector This sub-section argues that the automotive industry is crucial because of employment capabilities in the country’s economy. Since the adoption of the first industrial policy, MIDP, the industry has consistently created employment over the last decades especially in the period between 1995 and 2005 (Barnes, 1998, 2000; HSRC Automotive Industry, 2008; Lamprecht, 2009; Meyer, 2016). This was also confirmed by the empirical research conducted by the Fund for Research Industrial Development, Growth, and Equity (2005) that the automotive companies had increased employment figures from 1995 to 2004. Although more employment was recorded between 2001-2004 as opposed to job losses, this varies by company size and type (Barnes, 1998, 2000; Barnes & Kaplinsky, 2000; Fund for Research Industrial Development, Growth and Equity, 2005; HSRC Automotive Industry, 2008; Lamprecht, 2009; NAAMSA, 2004). The employment levels in the industry, which are normally monitored by employer associations supplemented by the research of independent bodies, remained relatively stable between 1995 and 2008 (Lamprecht, 2009). Essential to the steady growth of employment is the resilience of the industry, growth, and 24 investment ventures which are seen as crucial to sustaining an employment trajectory (Claassen, 2014; Lamprecht, 2009; NAAMSA, 2012). In 2018 the industry had employed about 110 000 people across the vehicle and component manufacturing sectors, producing over half a million vehicles (Davies & Vincent, 2020; Davies, 2018; Deloitte, 2019, 2020). Furthermore, the quarterly report by the employer association (NAAMSA) showed aggregate employment growth by 187 new jobs in the vehicle manufacturers in December 2019 (NAAMSA, 2019a). Statistics South Africa (2018a) revealed that the industry had about 270 440 people employed, the majority of whom were in retail sales of automotive fuel (32.4%), and retail sales of motor vehicles (29.9%). Furthermore, the employment in maintenance and repair of vehicles and sales of new motor car parts was also substantial. In addition, the local procurement is expected to increase in the next five years. This growth will be accompanied by 16 000 new employment opportunities mainly in the component manufacturing sector with local content growing by 5%, which is what the South African Automotive Masterplan (SAAM) is driving (Motor News Reporter, 2019). While the industry has been growing in terms of employment, it has been male-dominated, with women continuing to be underrepresented in the sector. The sub-section below discusses the employment gender disparities in the sector. 2.2.2. Gender Employment Patterns in the sector Gender parity in employment is crucial to understand the extent to which women have been considered at the point of hiring especially when companies are growing. The employment growth over the years in the sector seems to have not been gender inclusive, as males in the motor trade stood at 72% and females standing at 28% (Statistics South Africa, 2018). The skewed representation of women in senior positions remains unacceptable in the sector, cutting across sectors (Department of Trade and Industry, 2018). As a consequence, the Motor Industry Staff Association (MISA) has been calling for 25 an acceleration of gender equality in the industry (Wheels24, 2019). Supporting the gender equality call in the auto industry was Jeanne Esterhuizen, the President of the Retail Motor Industry (hereafter, RMI), who agreed with the Motor Industry Stuff Association (MISA) that there was much still to be done to turn the tide, considering the given glaring disparities in remuneration, conditions of service, skills development, and economic access (Wheels24, 2019). To this end, the RMI and many organizations in the sector continue to call for all automotive and component companies to train, reskill, upskill, and promote women from the lower level to the managerial and executive level (Wheels24, 2019). Essentially, there has to be a collaborative approach at a broader level especially between social partners at NEDLAC and a wide civil society to address gender disparities in the workplace (Department of Trade and Industry, 2018). 2.2.3 Export and Sales Market The global financial meltdown of 2008 was destructive in many economies including the South African one. It resulted in a decline in global demand for many of the domestic commodities which affected negatively the exports and investment in South Africa (Department of Trade and Industry, 2018). Component suppliers were severely affected by the declining OEM sales in general and particularly, the production of catalytic converter sales in South Africa (Gastrow, 2012; Statistics South Africa, 2018). Furthermore, several component suppliers had to reduce their capacity as cost-cutting measures, and that negatively affected the lower tiers of the supply chain (Gastrow, 2012). However, the South African automotive industry regained its strength post-financial crisis, enjoying rapid growth in terms of sales and exports (Automotive Industry Export Council, 2014). The Automotive Industry Export Council (2014) has attributed the industry export increase to the performance and direction of international markets. For the sector to be competitive in the international arena, it needs to achieve a 26 certain volume of production, which at the present moment the country’s local demand does not meet. The industry is well-positioned in terms of export markets in the Eurozone and North America Free Trade Area (NAFTA), and this remains crucial in terms of technology and knowledge exchange, and transfer (Automotive Industry Export Council, 2019). Similarly, in the recent past, the African region and Asia have also become important for the domestic industry products as both of these economies have expanded and trade relations with the South African economies have strengthened in a profound way (Automotive Industry Export Council, 2019, 2020). The expansion to the African continent and sub-regions signals an opportune moment for the domestic economy, in which its value-add exports are small and highly commodity-intensive (Department of Trade and Industry, 2018). In 2018 the automotive industry exported products at 14% of the export basket (Motor News Reporter, 2019). Deloitte (2019) indicates that the automotive export has increased and is valued at 180bn, consisting of 14.3% of South African exports. There seems to be a convergence in the industry literature that for the last three decades (1990-2020) the industry continues to be crucial to the country’s economy in terms of the export market (Automotive Industry Export Council, 2014, 2014, 2017, 2018, 2019, 2020). 2.2.4. Skills and Industrial Policy in the sector While extensive literature recounts the industrial policy as a strategic driver of export sales and employment (Department of Trade and Industry, 2007a, 2007b, 2018; Fund for Research Industrial Development, Growth and Equity, 2005; Lamprecht, 2009; Mashilo, 2010), Laseinde and Kanakana (2017) argue that skills have been essential for the Automotive Production Development Programme (hereafter APDP) to sustain the industrial development of South African automotive manufacturing both locally and internationally. For them, the APDP was more emphatic on the necessity to prioritize skills programmes that capacitate employees because human capacity is the greatest 27 intangible asset, moreover that the skills needed in the industry are linked to employment composition. Similarly, the newly adopted South African Automotive Masterplan 2020-2035 (SAAM) also places the importance of skills development at the centre of growth to sustain global competition. In this regard, Barnes et al (2018) argue that the future of the industry is crucial to ensure skills obstacles do not impede growth and development, thus, the SAAM skills requirements have to be consistent with modern technology as is the case globally (Barnes et al, 2018). However, Laseinde and Kanakana (2017) seem to agree that the skills developed in the context of stiff competition and modern technology globally play an important role. For them, the role of skills in the industry is much more than maintaining global competition and sustaining growth. They argue that skills enhance the strength of the industry in meeting global compliance demands for satisfactory production. T he Industrial Policy Action Plan of 2010/11 shows that the country’s skills system is weak as it doesn’t sufficiently address the needs of the industry. In this regard, the literature argues that there is the need for skills and industrial policies to be aligned to priority sectors and vice versa (Department of Trade and Industry, 2011). 2.3 KEY STAKEHOLDERS IN THE SECTOR In this section I discuss different stakeholders namely, NAAMSA, NAACAM, and trade unions, and the role in the overall direction of the industry and the economy as a whole. I commence the section with Naamsa, followed by Naacam and finally Numsa to show that there is relative degree of coordination between employers’ associations and unions. 2.3.1 National Association of Automobile Manufacturers of South Africa. The industry is used as a benchmark by other economic sectors for its good organizational structure, constructive engagement, and collaboration amongst relevant stakeholders. As a consequence, the Department of Trade 28 and Industry is executing the master plans in a few sectors inspired by the South African Automotive Masterplan 2020-2035 (Barnes et al., 2018; The Presidency, 2020). The industry is recognized and respected globally as an important partner that contributes to international competitiveness and the transformed industry through its contribution to sustaining the existence and development of the automotive industry in South Africa (Deloitte, 2020; NAAMSA, 2019b). NAAMSA looks after and promotes the interest of all OEMs, as well as major companies that operate in the distribution and importation of new vehicles in the country (Deloitte, 2020; NAAMSA, 2019b). It encourages its companies to drive skills training programmes that are not only beneficial to companies but society at large. As a result, all seven OEMs have spent billions of rand on various training programmes including in-house training. For example, Volkswagen South Africa (VWSA) has initiatives like R86m Black supplier development fund; Toyota has a R42m empowerment trust; and Ford and Nissan have incubation programmes (Davies & Vincent, 2020; Deloitte, 2020; NAAMSA, 2019b). Furthermore, President Cyril Ramaphosa and NAAMSA have recently announced the Automotive Industry Transformation Fund of 6 Billion rands to further leverage industry funding to provide necessary training and drive skills development in the auto sector (NAAMSA, 2019b). NAAMSA releases quarterly reports on the latest development in the sector in terms of sales, employment, consumer trends, export performance, and fiscal data figures, which are crucial for the economic measure in the country’s economy (Barnes et al., 2018; NAAMSA, 2019a). In its first quarterly reports in 2020 for instance, Naamsa indicated that like any sector, the industry has been severely strained by the Coronavirus (COVID-19) (NAAMSA, 2020). Despite the COVID-19 disruptions, NAAMSA continues to play an important role in the sector in collaborations with other stakeholders. It continues to coordinate the industry activities of its member companies. 29 Its vision is to facilitate progressive changes in the domestic auto industry and associated industries to promote the country as a significant player of products of international standard for global markets (Automotive Industry Export Council, 2014, 2017, 2018, 2019, 2020; Deloitte, 2020; Modiba, 2020; NAAMSA, 2004, 2012, 2012, 2019a, 2019b, 2020). The association works collectively with other partners and NAACAM (to be discussed below) in monitoring COVID-19 related developments in South Africa and globally. It monitors production- related constraints to inform the markets at large on the material changes (NAAMSA, 2020). 2.3.2 National Association of Automotive Component and Allied Manufacturers. The National Association of Automotive Component and Allied Manufacturers (NAACAM) is one of the critical voices of the country’s automotive component suppliers, both locally and abroad. It is a company-controlled and driven association that champions industry leadership, representation in policy discussions to promote the component suppliers, and engages with a variety of stakeholders, businesses, government, and unions for the betterment of the component manufacturers. The membership of NAACAM provides components service to OEMs for manufacturing and assembling of cars, as well as Original Equipment export markets both locally and internationally (Automotive Industry Export Council, 2020; Davies & Vincent, 2020; Deloitte, 2020; Modiba, 2020; NAACAM, 2019a; NAAMSA, 2020). Most of the suppliers to OEMs are multi-national companies, effectively globally controlled and owned, though there is an emphasis on growing the local participants in the supply space through localization programmes and transformation, which is driven by the NAACAM (Barnes et al., 2018; Deloitte, 2020; Modiba, 2020; NAACAM, 2019b). NAACAM engages in wage and industrial relations negotiations in the component sector; builds and maintains relations with strategic decision- 30 makers in the assembly sector i.e., NAAMSA (NAACAM, 2019a). It is central in the implementation of localization and transformation of the domestic industry as expressed in the recently adopted SAAM (Barnes et al., 2018; NAACAM, 2019b). It also releases data on key trends on issues relating to the components, builds a network, does marketing, and profiles its members. It engages in policy, regulatory, and other strategic industry topics. Like other companies, the associations acknowledge the economy is reeling from the ruins of COVID- 19, which have slowed the pace in growth. NAACAM (2020) attributes the slowdown in economic activity to travel embargos and quarantine measures that have led to shutdowns of plants in major industrial hubs, affecting the components supply in terms of costly logistics as a result of delays in the global supply of the components. The ruins of coronavirus among both component suppliers and car manufacturers reflect the destruction the pandemic has had on the sector, especially on manufacturing in South Africa. 2.3.3 The dominant trade Union—National Union of Metal Workers of SA The National Union of Metal Workers of South Africa (NUMSA) is the dominant union in the industry. The union was established after merging with four different unions, namely, Metal and Allied Workers Union, Motor Industry Combined Workers Union, National Automobile and Allied Workers Union, and United Metal, Mining, and Allied Workers of South Africa in 1987 during the state of emergence (Bird, 2020; Forrest, 2011; Hlatshwayo, 2013; Saliem, 2015). Motor Industry Combined Workers Union and National Automobile and Allied Workers Union, came together in the mid-1980s to explore ways of working together in organizing work as they had overlapping interests in the vehicle industry with no platform available to address these disputes (Forrest, 2011). The overarching vision was the establishment of single industrial union which will forge worker unity and control. Bird (2020) argues that Numsa therefore became the centre of the South African manufacturing sector. Numsa became a truly a giant union 31 by South African standards, and with its membership of 261 901 at the time place it as the second biggest affiliate of Congress of South African Trade union (COSATU) in 1987 (Bird, 2020; Forrest, 2011; Hlatshwayo, 2013; Ngcwangu, 2016; Saliem, 2015). Its dominance in the metal industry was a result of various, and combined experiences and traditions of its merged unions, outplaying the other older racial unions in the Metal Industry Bargaining Council (Forrest, 2011; Hlatshwayo, 2013; Ngcwangu, 2016; Saliem, 2015). In the early 90s, it introduced a new approach to South African bargaining agreements of concluding agreements with a life span of three years instead of the usual one year (Numsa, 2016). This afforded the industry breathing space to focus on implementing programmes aimed at improving the competitiveness of the industry during intervening years (Numsa, 2016). Numsa also played a significant role in the fight against the apartheid system in South Africa, not only involving itself in the worker struggles but also contributing to building a civic movement. While it played a role in the political breakthrough of 1994 which ushered the democratic government under the ANC, it was not prepared for economic liberalization and its negative effects on workers, which took place in the form of retrenchments and outsourcing (Hlatshwayo, 2013). Thus, it had to learn more sophisticated strategies to respond to political, organizational, and economic outlooks post-1994 (Saliem, 2015). It has since transformed itself from the phase of representing semi-skilled and unskilled migrant workers to now having an urban-based, formally educated, skilled and semi-skilled worker-base and thus, perceived as an intellectual and radical union, increasingly so since its formation to date (Hlatshwayo, 2013). Despite workplace changes in the workplace in terms of technology, product and work organization to enhance production and maximise profit, the labour movement has continuously consolidated and expanded its membership. Between the 1990s to 2016, the labour movement 32 has grown from around 260 000 to 338 000 members in the context of the economy that has shed jobs (Hlatshwayo, 2013; Saliem, 2015). It continues to play an important role in the manufacturing sector of South Africa, through raising critical issues of class interest not just for debate but for action, policy, and strategy. In the context of the automotive industry, it jointly with stakeholders and notable Motor Industry Staff Associations negotiates all conditions of employment, including wages, productivity, quality, safety, and training in the workplace (Numsa, 2016). It has been forward-looking and open to new, creative, and innovative measures to grow the industry sustainably and was very active in the skills policies such as the National Qualifications Framework (NQF) which were implemented after the transition to democracy (Allais, 2003). There is consensus in the literature that the labour movement was central in conceptualizing the skills development policies as early as in the 1990s, and created various initiatives to strengthen its capacity internally to constructively shape and contribute to economic restructuring debates (Bird, 2020; Ngcwangu, 2016). The Numsa not only produced the research material to support its perspective and views around training, it also established links both locally and internationally to ground its intellectual base (Ngcwangu, 2016). Skills policies, in particular the NQF and the establishment of the skills levy, were viewed as a panacea to the Job Reservation Act and also being integral to economic strategy (Allais, 2003). The NQF arose as a consequence of negotiations between the trade union movement, particularly Numsa, and industry representatives about industrial training development in South Africa. Numsa and the broader trade union movement were particularly concerned about the poor and weak education and training system that Black people were receiving, in addition to the difficulties confronted by Black people in accessing education, and the unfair job reservation system which excluded 33 Black people, and on other hand, the industry was also concerned about low skills levels in the workplace (Allais, 2007; Hlatshwayo, 2013, 2017; McGrath, 1996; Ngcwangu, 2016; Saliem, 2015; Sooklal, 2005). The principal problem of the job reservation system for Black workers was that White workers with less experience albeit with formal certificates had access to skilled jobs, yet their Black counterparts who possessed skills and experience although without qualifications could only access low-level paying jobs (Allais, 2007). Thus, the labour movement advocated for recognition of knowledge and skills that workers already possessed, in addition to experience gained in the workplace. The education policy reform debate around the 1990s were centred on equity and the economy. The social forces mainly from the working class movement and the labour union were concerned with questions around redressing the historical disparities and economic imperatives. For the the labour movement the overarching views were around work education and training and empowering of workers with skills in order to working conditions and better wages . Allais (2003) argues that negotiations were held and a conclusion was reached between the union and industry representatives through the National Training Board (NTB) that the national framework of learning outcomes be integrated into a qualification and part qualifications, to address the set training and skills related concerns. The union’s perspective was integrated into the policy development process within the educational organization that was part of the broader mass democratic movement (Allais, 2007). Although these views were contested initially, they were integrated as part of solutions to the problems of the education system in the country and finally absorbed by the ANC through its policy structures (Allais, 2007). There was a broader consensus across sectors and organizations around the idea of the national qualifications framework (Allais, 2003, 2007). This shows the role the trade union movement played, not only on the shop floor but also in policy issues related to skills and educational training. Numsa, together with 34 employer or industry associations discussed above, and government as social partners or stakeholders, negotiate industrial policy matters concerning the automotive manufacturing industry. It continues to play a significant advocacy role regarding the worker’s rights, skills development programmes, improving conditions of employment, and advocating the transformation of the industry as a whole (Numsa, 2016). It has lost some of its skilled and capable leaders to parliament, government and business since the dawn of democracy. The year 2013 was a turning point for trade unions in the South African political landscape. In its Special National Congress held in 2013, Numsa shifted the political spectrum in South Africa. It not only broke away from the SACP and ANC- aligned workers federation, the Congress of South African Trade Unions (COSATU), to form its own new federation, the South African Federation of Trade Union (SAFTU), it also formed a socialist workers party which contested the 2019 National General Elections. Despite its electoral support setbacks in the national general elections, the union is still important in the automotive sector and as shown is critical in policy discussions aimed at sustaining the industry as a whole. 2.4 THE FUTURE TRAJECTORY OF THE INDUSTRY The automotive industry in South Africa will be impacted by a range of major technological changes which are set to rapidly change the outlook of manufacturing globally. This section shows that automation in the sector is the future and driver of the sector to compete at a global scale. There is consensus in the industry commissioned reports and the literature that the disruptions of the COVID-19 pandemic (more details in the section below) have affected the industry’s performance and the economy at large (Modiba, 2020; NAAMSA, 2020). This disruption has indirectly accelerated motor vehicles design to focus on and adopt new technologies (Automotive Industry Export Council, 2021). Thyagarajan (2018) argues that technological changes and digitalization in 35 the sector improve its competitiveness, and set a strong base from which growth is guaranteed. Industry commissioned reports show that rapid technological changes in the workplace are at the centre of transition to the vehicle of the future, linked to electronics, connectivity, fuel efficiency, and safety (Mabasa & Burger, 2020; MerSETA Motor Chamber, 2018). For instance, motor vehicles have computerized wheels (Mabasa & Burger, 2020). The electric or hybrid vehicles, connected cars, and autonomous driving is a grand vision of the original equipment manufacturers, in which the components must meet through new technologies (Automotive Industry Export Council, 2020). Although the cost to remain in the contest to supply the OEMs has grown, and only the big component suppliers can afford the ever increasing costs of changing technology to make the industry’s vision (hybrid or electric vehicles) realizable, the ability of the components suppliers to grow largely depends on satisfying their customers (the OEMs) (Automotive Industry Export Council, 2019, 2020). Investment in technological equipment is critical to enhance quality in production, improve efficiency, and increase productivity and also reduce waste (Deloitte, 2020; Department of Trade and Industry, 2018; NAACAM, 2019c). The success of these technological changes have been shaped by different contextual factors namely, research and innovation, research and development capabilities, large and global production capabilities, and extensive supply chain (Automotive Industry Export Council, 2021). These technological changes in the workplace seem to be taking place across all sectors at a different rate and with varying levels of impact, and employment opportunities across different sectors are becoming more reliant on digital technology (MerSETA Motor Chamber, 2018; Thyagarajan, 2018). The emerging trends in the literature suggest that automation is broadly linked with lower labour requirements per unit of output in manufacturing, adopting 36 such labour-saving technologies (Frey & Osborne, 2013; Hlatshwayo, 2013, 2017; Hova, 2017; Mashilo, 2010; MerSETA Motor Chamber, 2018; Thyagarajan, 2018; World Trade Organization, 2017). Automation is regarded as crucial to save costs as labour is seen to be getting expensive to compete globally; to improve health and safety in the workplace; and to improve and standardize quality (Birnbaum & Farrow, 2018; Deloitte, 2020). The MerSETA Sector Skills Plan (2017) indicates that skills, especially maintenance skills and problem-solving skills, are required to operate and understand the company's unique technologies. The World Trade Organization (2017) asserts that a skilled workforce is to a greater extent less affected by major technological changes since it is less costly for them to acquire the additional understanding in terms of competencies and skills to adapt. 2.5 THE EFFECTS OF COVID-19 IN THE AUTOMOTIVE SECTOR PERFORMANCE As indicated above, in this section I discuss the effects of COVID-19, to show that the sector was hit hard by the pandemic, leading to production decline and investments decrease. Although the research was conducted long before the pandemic, and this has no bearing on the substance of my research, but it does have bearing on the significance of my research; hence it is important to show the industry performed during the pandemic. Despite the steady economic performance of the industry