The announced closure of Goodyear’s factory in Kariega has raised concerns from the Department of Trade, Industry, and Competition over the loss of jobs and the economic impact the move will have on the area.
The Department has opened talks with Goodyear in an effort to prevent the closure, with the goal of saving the more than 900 jobs now at risk.
Yamkela Fanisi, a Department Spokesperson, indicated that a potential solution would be for a deal to be struck similarly to the one used by the Industrial Development Corporation (IDC) to avert job losses at ArcelorMittal.
This deal furnished ArcelorMittal with a R1.68 billion facility, leading to the deferring of two key steel mill closures and saving 3,500 jobs.
If a similar deal isn’t struck with Goodyear, the Department has indicated that the closure will devastate the local economy.
This is because the closure will impact secondary industries such as catering, security, and corporate social investment projects that rely on Goodyear.
However, the reasons for Goodyear’s factory closure are similar to those that led ArcelorMittal to announce the closure of its facilities.
These include competition with cheaper products and high electricity costs.
Based on this similarity, there is some hope that an agreement could be reached in much the same manner as ArcelorMittal and the Kariega factory kept in operation.
Thus far, Goodyear has made no direct public response to the talks from the Department and has only released a statement indicating it was committed to supporting its impacted workers.
This closure forms a part of the company’s goal of transforming 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.”
Union intervention
The South African Federation of Trade Unions (Saftu) has announced its solidarity with the impacted workers.
Saftu National Spokesman Newton Masuku stated that the decision from Goodyear is nothing short of a betrayal of the individuals and communities that have supported it for nearly a century.
“We now face a coordinated wave of industrial disinvestment across the Eastern Cape – and workers are being left to carry the cost,” he said.
This closure also follows Conti-Tech, a subsidiary of Continental Tyres operating in the same area, reducing its operations, and Aspen Pharmacare, a major pharmaceutical company, retrenching workers.
“All these decisions are being taken in a province where the expanded unemployment rate is already at a staggering 49%,” said Masuku.
“These closures will deepen poverty, accelerate migration, and destroy any hope of economic transformation.”
He went on to state that the closures aren’t due to collapse but rather the pursuit of cost-cutting and global restructuring that comes at the expense of South African workers.
Masuku also noted that this is an abuse of public trust and a demonstration of why corporate control cannot be trusted to deliver economic justice.
In response to the announcement, Saftu has called on Numsa, Goodyear, Conti-Tech, Aspen, DTIC, and other relevant public agencies to convene crisis negotiations that will halt closures and develop job-saving alternatives.
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