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30 January 2008

Programme director
The CEO of the Ford Motor Company of Southern Africa, Mr Hal Feder
MEC, Mr Paul Mashatile
Charge de Affairs, US Embassy, Mr Don Tietelman
Councillor, City of Tshwane, Mr Galala Makama
Members of the Media
Distinguished guests
Ladies and gentlemen

I am honoured to be part of this official event. We are gathered here today to celebrate the announcement of Ford's R1,5 Billion investment plan for the production of T6 pick up trucks in Tshwane and diesel engines in the Nelson Mandela Metropole. This investment is strategically important both for South Africa and the Ford Motor Company. Let me take this opportunity to congratulate the Ford Motor Company for its decision to make this investment in South Africa, and in particular, in the cities of Tshwane and the Nelson Mandela Metropole.

I am told that Ford South Africa had to bid against a number of other possible locations for these projects. I want to congratulate everyone who had a part in ensuring that these projects came to South Africa. It is indeed very encouraging that we adopted a Team South Africa approach in this endeavour in which all three spheres of government, labour and the private sector worked tirelessly to make this investment a South African one.

Today's event is testimony to the important partnership we have been able to build between business, government and labour and the role that such partnerships can play in the economic development of our country. We are glad that the Ford Motor Company understands and is committed to building such partnerships that can play a critical role in the social and economic life of our country.

The automotive industry is one of our most important industrial sectors contributing 7,53% to the country's Gross Domestic Product (GDP) in 2006. Our National Industrial Policy Framework (NIPF) has confirmed that government sees the automotive sector continuing to play a pivotal role in ensuring that South Africa achieves higher rates of economic growth which we need. The Ford Motor Company South Africa has been a critical part of that process and we look forward to it continuing to play a major role in ensuring that South Africa becomes an even more globally competitive manufacturing location especially through increased investment in modern plant, as well as skills development.

The T6 pick up truck will be on a global platform and will make the Ford Motor Company South Africa, a volume based exporter. We have no doubt that your export orders will grow and that you will benefit in this regard from the favourable market access arrangements that South Africa enjoys with the European Union (EU), Southern African Development Community (SADC) and the United States of America (USA) among other destinations. We are very excited that this project is the start of bigger things to come for the Silverton plant. The engine plant in Port Elizabeth will be a first for South Africa, a new diesel technology plant.

The Rocam engine produced in the Struandale plant has become a symbol of reliability the world over and South Africans are proud that an engine of such high quality is the product of their labour. Both these investment projects have significant potential for job creation and skills development. We are encouraged by your approach to the development of new suppliers, particularly Black Economic Empowerment (BEE) firms as part of your supply chain.

We are very happy that Ford is committed to investing in South Africa knowing that as a company, you have seen the benefits of investing in our country and are convinced that you will continue to do so well into the future. We are confident that we will remain a reliable partner for the benefit of all our people and our economic development. As a country, we are proud of the quality products that have been developed in your plants and we are confident that they are some of the best in international markets.

We are well aware that increased investment not only contributes to the objectives of growth and development to which our government aspires, it also creates employment opportunities that can contribute to poverty eradication.
We therefore look forward to the continuation of the healthy and mutually beneficial relationship between the Ford Motor Company and ourselves as government.

Chairperson, government has since 2005 been reviewing the Motor Industry Development Programme (MIDP). As you know, one of the objectives of this review has been to evaluate the performance of the industry against the MIDP's stated objectives, viz, making vehicles more affordable, growing exports, rationalising production platforms and stabilising and growing employment. At the same time, the thrust of this review is to ensure that our automotive industry remains globally competitive and is integrated into the global value chain.

I am aware that you, like the rest of the automotive industry, are concerned that we should complete this review as soon as possible. Government agrees with you in this regard. As you know, the Department of Trade and Industry publicly indicated in December 2007, that we are determined to complete within the very near future, the process of outlining a support programme for the industry that will be implemented after the current MIDP expires in 2012.

It is clear that in determining the level of support, the future programme will have to respond to the needs of the industry with regard to competitiveness, localisation and transformation. We will arrive at these decisions after comprehensive and sustained discussions that we are undertaking with the automotive industry as a whole. Through our National Industrial Policy Framework, government has indicated that we will encourage and support the automobile sector as one of the lead sectors in our programme of expansion and deepening of our manufacturing sector.

I say this to confirm that we are as keenly interested as you are, to resolve all matters that relate to the MIDP as quickly as possible. Yet, I must also say that in this regard, together we must ensure that we do not expose ourselves to any challenges in terms of World Trade Organisation (WTO) rules and agreements.
Our government will therefore honour its obligation consistently, to engage all our relevant social partners to produce an arrangement that meets our common desire to ensure the further and rapid expansion of the automobile sector.

Programme Director,

The economic restructuring that is taking place currently in South Africa through the introduction of the National Industrial Policy Framework, seeks to respond to various economic and industrial policy imperatives. It also seeks to address a weakness that exists in our economy, which, among other things, has resulted in the current balance of payments deficit. Part of our vision of the National Industrial Policy Framework (NIPF), is to move us onto an industrialisation trajectory that is responsive to the:

* intensification of South Africa's industrialisation process and movement towards a knowledge economy
* provision by domestic manufacturers of the capital goods that our growing economy needs and will continue to demand
* promotion of more labour-absorbing industrial sectors, with an emphasis on tradable labour-absorbing goods and services and economic linkages that catalyse employment creation
* promotion of a broader based industrialisation path that is characterised by greater levels of participation of historically disadvantaged people, and marginalised regions in the mainstream of the industrial economy.

We are determined to pursue all these objectives, which are integral to the Accelerated and Shared Growth Initiative for South Africa (AsgiSA). We know that in this regard we have no choice other than to succeed; hence our Industrial Policy Framework and its Action Plan are critically important to an accelerated and sustained advance towards overcoming the challenges of unemployment and poverty and creating a better life for all our people. I am indeed very pleased to be here today to join the management of the Ford Motor Company South Africa, the team from government, labour and training institutions, at this important announcement. We are proud to have Ford as one of our leading corporate citizens and assure you of the commitment of our government to work with you as we, again together and in partnership, continue to respond to the challenge of building a winning nation.

I wish the CEO of Ford Motor Company South Africa, Mr Hal Feder and Mr John Parker, Vice President, Latin America, Africa and the Middle East, who made this investment decision possible, every success as Ford Motor Company South Africa grows from strength to strength, driven by the determination to succeed and the confidence in our country, represented by the new and additional investment we celebrate today.

Thank you.

Issued by: Department of Trade and Industry
30 January 2008
Source: Department of Trade and Industry (http://www.thedti.gov.za)