[Image: Px Here]
After nearly eight decades of rolling rubber and Saffa grit, Goodyear South Africa is pulling the brakes on its tyre manufacturing plant in Kariega.
This dramatic exit after 78 years has sent economic analysts, unions, and policy wonks into a tailspin, raising tough questions about whether our macroeconomic policy is more pothole than pathway when it comes to attracting and holding onto investment, per the IOL Business Report.
Goodyear dropped the bomb on Monday, confirming that it’s initiating a full-on “restructuring” at its plant—corporate speak for more than 900 jobs circling the drain.
Manufacturing in SA has already been coughing and spluttering, and this announcement feels like another nail in the sector’s rusting coffin. The National Union of Metalworkers of South Africa (Numsa) confirmed it had received a Section 189 notice, legalese for: “We’re preparing to downsize. Buckle up.”
The tyre titan is apparently reworking its strategy across Europe, the Middle East, and Africa to “optimise its footprint and portfolio.” Sounds fancy, but here’s the fine print:
“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 (SAG) functions. Goodyear South Africa will continue to maintain a sales and distribution, and HiQ retail presence in South Africa,” it said.
“The process will be facilitated by the CCMA, and Goodyear will engage in it with transparency and fairness, ensuring that the dignity and interests of all those potentially impacted by the process are appropriately safeguarded. As a company, we recognise our responsibilities towards our employees and their families and are firmly committed to acting fairly and providing them with appropriate support.”
Nice words. But good luck finding comfort in HR-approved corporate compassion when you’re one of 900 people suddenly having to explain to your kids why dinner’s looking a little lighter this month.
Over at the National Automobile Dealers’ Association (NADA), the tone was predictably diplomatic. They acknowledged that Goodyear’s decision was “difficult” but part of a broader global shuffle. No kidding.
“Our thoughts are with the employees, families and communities who may be affected by this change,” NADA said.
“This development underscores the importance of creating a supportive environment to sustain industrial operations and employment in the country.”
However, not everyone is in the mood for eulogies. Efficient Group chief economist Dawie Roodt dispensed with diplomatic restraint, pointing fingers squarely at government economic policy—or, in his view, the lack thereof.
“South Africa is in a process of deindustrialising, which means we are losing our factories and investments. The reason for this is that we have the wrong macroeconomic policies and I know trade unions are going to be concerned about this,” Roodt said. “Unfortunately that is part of the problem: organised labour in South Africa is too strong and they get too much legislative protection.”
“Until we change these policies these trends that have become apparent for a number of years will continue. It’s really disappointing for the workers and for the South African economy.”
While Roodt places macroeconomic strategy in the crosshairs, Professor Waldo Krugell of North-West University zooms out further, citing a globalised playing field where South African manufacturing is simply outgunned.
“It is caused by a combination of cheap import competition from China and the local supply side issues facing manufacturing. The loss of jobs will hit the local community hard. It also spills over into the staff of support industries, security, and cleaning,” he said.
Krugell tossed out a few possible moves for the government, too: slapping tariffs on imports or fixing the crumbling supply side, but even he didn’t sound all that convinced.
“That is relatively easy to do, and we have been doing it with little success. Or we can try to fix the supply side to make local manufacturing more competitive. That is relatively difficult, but we have been talking about it quite a bit,” he said.
But before you get all starry-eyed about trade protectionism saving the day, Krugell hit the brakes:
“And when the protected product is an input in someone else’s production process, it adds to the cost of doing business and makes the next sector uncompetitive.”
So there it is: the tyres are deflating, the policy engine is sputtering, and for nearly a thousand workers in Kariega, the road ahead just got a hell of a lot rougher.
[Source: IOL]
