Goodyear shuts Vic tyre plant

Tag : Low Volume Production

Almost 600 jobs will be lost when a Goodyear tyre factory inMelbourne's outer north closes at the end of the year.

Workers were delivered the devastating news that South PacificTyres at Somerton - which has been the subject of speculation aboutits future - will close on December 31.

In a statement this morning, the company, which was bought byGoodyear in 2006, said all 587 employees' full entitlements undertheir collective agreement would be honoured.

Chief executive Judith Swales said the factory's viability had longbeen under a cloud, primarily because of its high operating costsand low volume capabilities to produce the types of tyres consumerswere now buying.

"To put this in perspective, conversion costs ... are almost doublethat of our average plants overseas and almost six times that ofour most cost-competitive plant,'' Ms Swales said.

"Despite the best efforts of our manufacturing workers and theirimprovements in the area of quality, safety and waste, the Somertonfactory is still not cost competitive.''

South Pacific, which produces Goodyear and Dunlop tyres, said itwould work with the various unions as it prepared to wind downoperations and also said the closure was "in no way related to anylack of support from federal, state or local governments''.

"South Pacific Tyres respects the role of various unions inrepresenting its workforce and will engage and collaborate withassociates and their unions to ensure a smooth transition,'' MsSwales said.

"South Pacific tyres recognises the potential economic and socialrepercussions of this announcement and will work with local andstate governments as appropriate to ease its effect.''

The National Union of Workers (NUW) said today's announcement bySouth Pacific was "a timely reminder of the critical threat facingAustralia's automotive industry''.

NUW Victorian secretary Antony Thow said many of the workers hadbeen with the company for more than 20 years.

"Their immediate prospects of finding good jobs now are prettybleak,'' Mr Thow said.

"We know from experience it often takes these workers two to threeyears to find comparable full time jobs again in manufacturing.Many will end up stuck in casual employment.''

Mr Thow said the closure would also have a knock-on effect amongother local suppliers "whose futures and jobs are now under acloud''.

"The knock-on effect of this closure could be enormous. That's whyit's so important the federal government gets its AutomotiveIndustry plan right and under way as soon as possible,'' Mr Thowsaid.

"Productivity at the SPT factory has jumped in recent years, butthe high Australian dollar and skyrocketing oil prices are makinglife very difficult for local manufacturers.

"Poor management decisions don't help. SPT got it wrong when theyclosed their local truck tyre manufacturing in 2000 and missed theboom in the market for commercial vehicles servicing the miningindustry.

"They showed a lack of foresight then, and are lacking foresightnow by acting ahead of a refocusing of Australian automotive thatshould deliver a sustainable future for local industry based onproduction of more efficient and greener vehicles.

"As a local producer, SPT would have been well placed to work handin glove with car producers to take advantage of growing local andexport markets.''