The Philippine Daily Inquirer reported on 17 July 2009 that the Philippines Goodyear Tire and Rubber Co. has decided to shut down its manufacturing plant in Las Piñas City starting 30 September 2009 after 50 years in the business. This move will displace an estimated 500 employees.
In a briefing, Goodyear Philippines Inc. managing director Dave Morin said the local manufacturing facility was no longer operating competitively in terms of costs due to the erosion of its export business.
"Our business model here has become uncompetitive on the cost side, so we need to make some changes on the cost structure. We need to close our manufacturing operations here and just import tires from our sister companies in the region," Morin said, adding that the company would still maintain its presence in the country through its dealer network.
To continue to be able to provide the tire requirements of its replacement and original equipment customers, he said, Goodyear Philippines would source its supply from plants in Indonesia, Malaysia and Thailand.
"The domestic market is improving, but it can’t grow at a rate fast enough to offset the loss in our export business," Morin said.
He explained that exports made up 45 to 50 percent of Goodyear’s overall business in the Philippines.
For employees that would be displaced, he said Goodyear Philippines would be providing retrenchment packages that 'far exceeds what’s legally required.' Morin declined to elaborate more about the package.
Also, the company had set aside PhP 1 million for 'transitional programs' that would prepare workers to be laid for alternative livelihoods or jobs in other sectors, he said.
The company would retain around 100 of its employees for the sales, marketing, distribution and administrative aspects of its business.
In the fourth quarter of 2008, Goodyear Philippines started to feel the impact of the global recession 'severely and swiftly' as its export business shrank to almost nil, Morin said.
Because of that, the company implemented steps to stay afloat, one of which was to retrench 46 employees, or seven percent of its total workforce, he said.
"We hoped that our export business would come back," Morin said of the time. "But it has not come back, and we don’t anticipate it will in the future."
He explained that since there was no longer any overseas demand for tires manufactured in the Philippine facility, the company’s cost per unit went up, owing to the production of a significantly smaller number of tires while maintaining the same overhead costs.
"We’re no longer running at a capacity level that’s sustainable,” Morin said. “We’ve had to deal with unrecovered overheads. The local market is simply not sufficient to offset the loss of exports."
In a briefing, Goodyear Philippines Inc. managing director Dave Morin said the local manufacturing facility was no longer operating competitively in terms of costs due to the erosion of its export business.
"Our business model here has become uncompetitive on the cost side, so we need to make some changes on the cost structure. We need to close our manufacturing operations here and just import tires from our sister companies in the region," Morin said, adding that the company would still maintain its presence in the country through its dealer network.
To continue to be able to provide the tire requirements of its replacement and original equipment customers, he said, Goodyear Philippines would source its supply from plants in Indonesia, Malaysia and Thailand.
"The domestic market is improving, but it can’t grow at a rate fast enough to offset the loss in our export business," Morin said.
He explained that exports made up 45 to 50 percent of Goodyear’s overall business in the Philippines.
For employees that would be displaced, he said Goodyear Philippines would be providing retrenchment packages that 'far exceeds what’s legally required.' Morin declined to elaborate more about the package.
Also, the company had set aside PhP 1 million for 'transitional programs' that would prepare workers to be laid for alternative livelihoods or jobs in other sectors, he said.
The company would retain around 100 of its employees for the sales, marketing, distribution and administrative aspects of its business.
In the fourth quarter of 2008, Goodyear Philippines started to feel the impact of the global recession 'severely and swiftly' as its export business shrank to almost nil, Morin said.
Because of that, the company implemented steps to stay afloat, one of which was to retrench 46 employees, or seven percent of its total workforce, he said.
"We hoped that our export business would come back," Morin said of the time. "But it has not come back, and we don’t anticipate it will in the future."
He explained that since there was no longer any overseas demand for tires manufactured in the Philippine facility, the company’s cost per unit went up, owing to the production of a significantly smaller number of tires while maintaining the same overhead costs.
"We’re no longer running at a capacity level that’s sustainable,” Morin said. “We’ve had to deal with unrecovered overheads. The local market is simply not sufficient to offset the loss of exports."
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