Goodyear has announced the shutdown of its Kariega tyre manufacturing facility in Nelson Mandela Bay as part of a restructuring of its operations in South Africa.
The factory, which has been in operation since 1947, employs around 900 workers and supports thousands of other jobs in secondary industries, such as catering and security.
This announcement has raised concerns over the 900 workers’ jobs as well as how it will impact associated businesses.
Goodyear released a general statement that addressed some of these concerns on 5 June, noting that the company will transform its go-to-market strategy in the Europe, Middle East and Africa region to optimize its footprint and portfolio.
“As part of that transformation, Goodyear South Africa is launching a restructuring process in accordance with the provisions of the Labour Relations Act to address proposals regarding the closure of its manufacturing facility in South Africa and the realignment of certain sales, administration and general management functions,” the statement said.
“Goodyear South Africa will continue to maintain a sales and distribution, and Hi-Q retail presence in South Africa.”
Along with this, the statement noted that the closure was in no way a reflection of the efforts and years of dedication from its South African team.
Goodyear went on to confirm that it understands its responsibilities as an employer and that it is committed to acting fairly and providing employees with appropriate support.
The process will be overseen by the Commission for Conciliation, Mediation, and Arbitration (CCMA), the statutory body established by the Labour Relations Act to facilitate resolutions in workplace disputes.
The CEO of Nelson Mandela Bay Business Chamber, Denise van Huyssteen, indicated that the organization’s job loss mitigation initiative would be used to help those impacted by this closure.
This initiative assists workers whose positions have been made redundant by connecting them with new companies interested in their skills.
Issues in the tyre industry
This announced closure follows restructuring by Dunlop Tyres South Africa conducted at its Ladysmith plant in February this year, which resulted in retrenchments among local employees.
These restructurings highlight the heavy strain tyre manufacturers now face in South Africa.
Lack of municipal service delivery, inadequate and unreliable electricity supply, and above-inflation cost for essential services have all contributed to this circumstance.
The arrival of cheap tyre imports from China has also further escalated the problem and placed more strain on South African tyre manufacturers.
In response to the Goodyear announcement, Nduduzo Chala of the South African Tyre Manufacturers Conference indicated that trading conditions for local tyre manufacturers had become increasingly more difficult over the last few years.
“The market has been plagued with an unfair trade environment. It is a question of producers vs importers, and low-cost products have been introduced into the market,” Chala said.
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