Major international company shuts down operations in South Africa

Goodyear has confirmed it is closing its manufacturing operations in Nelson Mandela Bay in what worker union NUMSA has called a major blow to employment in the Eastern Cape. 

The plant, which has been operational since 1947, currently employs around 900 people directly and supports more jobs through its broader value chain, including catering, security, logistics, and maintenance services.

The move forms part of a broader restructuring of Goodyear’s operations in Europe, the Middle East and Africa (EMEA), as the global tyre giant adapts its footprint and product portfolio to new market conditions. 

While the company will retain a sales and distribution presence in South Africa and its Hi-Q retail network, its manufacturing operations in the country are shutting down.

Goodyear South Africa is part of Goodyear Tyre & Rubber Holdings and operates within the company’s Emerging Markets cluster. 

It has long been recognised for its diverse product range, producing quality tyres for passenger vehicles, SUVs, 4x4s, trucks, off-road vehicles, and aircraft. 

The company’s announcement was accompanied by a formal restructuring process in line with South Africa’s Labour Relations Act. 

The Commission for Conciliation, Mediation, and Arbitration (CCMA) will oversee the proceedings. Goodyear stated that it is committed to supporting affected employees fairly and responsibly.

“This proposal is in no way a reflection of the commendable efforts or the years of dedication of our South Africa team, for which we are grateful,” the company said in a statement. 

“We recognise our responsibilities towards our employees and their families and are firmly committed to acting fairly and providing them with appropriate support.”

However, the news has sparked strong criticism from labour unions. The National Union of Metalworkers of South Africa (NUMSA) has warned of dire economic and social consequences following the closure. 

An unfair trade environment

The union confirmed it had received a Section 189A notice from the company, initiating a consultation process that typically precedes retrenchments.

NUMSA spokesperson Phakamile Hlubi-Majola said the ripple effects would be felt beyond Goodyear’s factory gates. 

“This decision is not just going to affect the jobs of workers at Goodyear directly, but also the many jobs linked to its value chain,” she said. 

“There are smaller companies that provide services to Goodyear, and the closure of that plant means those companies are also likely to be affected. So we are actually likely to see far more than 900 jobs being impacted.”

The Eastern Cape is already grappling with South Africa’s highest provincial unemployment rate, which is 41.9%.

As one of the few remaining industrial anchors in the province, the closure of the Kariega facility could have lasting effects on business confidence, household income, and regional stability.

Although Goodyear has not publicly detailed its reasons for the closure, experts believe the company is reacting to a perfect storm of adverse conditions. 

These include global economic headwinds, rising operational costs, and increasing competition from low-cost tyre imports, particularly from Asia.

Denise van Huyssteen, CEO of the Nelson Mandela Bay Business Chamber, pointed to several structural issues undermining the viability of manufacturing in the region. 

She highlighted that tyre manufacturers face significant pressure from various environmental challenges, including logistics issues, inadequate municipal services, and rising costs for essential services. 

Additionally, Van Huyssteen noted that the influx of cheap tyre imports is exacerbating the market situation.

Nduduzo Chala from the South African Tyre Manufacturers Conference echoed these sentiments and added that trading conditions for local manufacturers had been very difficult over the past few years.

The conference will include the four big tyre manufacturers in South Africa: Bridgestone, Dunlop, Goodyear, and Continental.

“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,” he said. 

He said they had persuaded the government, even though it took over a year, to introduce anti-dumping duties on China recently.

“It was a very unfair trading environment,” he said. “But there are always loopholes, and the Chinese companies are now shifting operations to Thailand, Cambodia and Vietnam. We then had to do the same for these countries,” he said.