Goodyear to close RP plant

MANILA, Philippines – Goodyear Philippines announced it will be closing in September its manufacturing plant in the country after more than 50 years of operations and 500 of its 600 employees will be losing their jobs. Goodyear produced its first tire here in 1956.

“We are here to announce the cessation of manufacturing of Goodyear Philippines on Sept. 30, 2009,” Dave Morin, president and managing director of Goodyear Philippines said in a press conference yesterday.

Morin said they are closing the plant in Las Piñas because of weak export demand given the slow sales of tires overseas.

During the fourth quarter last year, Morin said they saw the severe impact of the global economic condition to the local manufacturing operation. In fact last December, they retrenched 46 people, representing seven percent of their workforce.

Morin said they tried to assess their cost competitiveness. “We hoped the export business will come back. To date it has not come back,” he noted. “We don’t anticipate recovery.” 

With their business model becoming unsustainable, Morin said they decided to make changes in the cost structure.

If the drop was only in the domestic demand, Morin said the plant could have continued its operation. But because overseas sales were affected, he said they could no longer sustain the plant.

Goodyear tires produced in the country are being sold in North America, South America, Europe and the Caribbean Islands, Morin said, adding that their manufacturing plants in Malaysia, Indonesia and Thailand will now be supplying the local demand. 

When asked if the cost of doing business here in the Philippines was a factor in their decision to close, Morin said their biggest concern remains to be the capacity utilization but power is a significant cost. 

As for the 500 people who will be losing their jobs, Morin said they will be offering retrenchment packages that exceed the legal requirement.

Likewise, they will be investing P1 million for transitional programs. The employees can choose two of the 13 programs that can train and aid them in their search for new jobs.

 “We want to make the transition as easy as possible,” he said. 

The remaining 100 employees are from marketing, sales, distribution and administration.

Morin said their business and supply arrangements with local customers will remain.