600 jobs lost as tyre plant shuts

United States tyre giant Goodyear Tyre and Rubber Company has announced it will shut its Australian manufacturing operations on 31 December and sack 587 workers.

In another blow for the beleaguered manufacturing industry, United States tyre giant Goodyear Tyre and Rubber Company has announced it will shut its Australian manufacturing operations on 31 December and sack 587 workers.

The manufacturing operations are controlled by Goodyear’s Australian subsidiary, South Pacific Tyres (SPT). The chief executive of SPT, Judith Swales, says production costs at the plant in the Melbourne suburb of Somerton had simply become too high. She says production costs are running at twice the level of Goodyear’s average tyre plant and six times more than its most cost-competitive plants.

“Despite the best efforts of our manufacturing workers and their improvements in the area of quality, safety and waste, the Somerton factory is still not cost competitive.”

The sacked employees will receive their full entitlements, although union officials claim their prospects for re-employment are bleak.

Goodyear, which is based in Ohio in the US, purchased 100% of South Pacific Tyres in 2006, buying out then joint venture partner Ansell (previously Pacific Dunlop).

The company is currently in the middle of a restructure that aims to reduce high-cost production by about 25 million units and achieve annual cost savings of more than $US150 million.

Goodyear chief executive Robert Keegan says closing the SPT plant will eliminate approximately three million units of high-cost production and provide Goodyear with annual cost savings of approximately $US35 million.

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