13 hours ago
- Business
- The South African
Government wants to intervene in latest factory closure
Government and trade unions are hosting urgent talks after another major factory closure in South Africa was announced. Specifically, the Goodyear tyre factory in Kariega, Eastern Cape, will be shutting its doors. In the face of cheap Chinese imports and uncompetitive energy and transport costs, the multinational company sees no other option but factory closure.
However, within the context of rising unemployment in the province, industry stakeholders believe an economic disaster is looming. Once considered the heart of South Africa's manufacturing sector, the Eastern Cape's unemployment rate now sits at 49%. The level of unemployment in the province is so worrying, Stats SA highlighted as much in its latest Quarterly Labour Force Survey 2025. Above-inflation increases to energy and transport costs are making tyre manufacture in South African unviable. Image: Pexels
Nevertheless, the Department of Trade, Industry, and Competition (DTIC) hopes to intervene to prevent the factory closure, reports BusinessTech . Besides the factory closure itself, the DTIC worries about secondary industries dependent on the plant. 900 potential job losses don't account for the likes of catering, cleaning, security, and corporate investment initiatives.
Similar to interventions to prevent steel giant ArcelorMittal South Africa (AMSA) from shutting down, government hopes to find a solution. However, this is provided the company is willing to cooperate. So far, the multinational has remained silent on the matter, saying it only wants to 'optimise its footprint in South Africa.' As such, the closure forms part of a broader streamlining operation across Europe, the Middle East and Africa. The factory closure is part of a broader restructuring and may not be reversible. Image: File
Former South African ambassador to Japan, Smuts Ngonyama, urged government to intervene. He stressed that the plant's continued operation is vital not just for the region's economy but also for the dignity and livelihoods of its workers. Meanwhile, labour unions have also raised concerns with the South African Federation of Trade Unions (SAFTU).
'These decisions will deepen poverty, accelerate migration, and destroy any hope of economic transformation in the Eastern Cape,' warned the unions. Only time will tell if the company's commitment to global transformation will stymie any efforts to reverse this decision.
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