09 June 2025
Business Live
by Ayabonga Cawe
Goodyear SA MD Paul Gerrard was accompanied by bodyguards to a staff meeting in the Despatch town hall last week, as fury mounted in the Mandela Bay area over looming layoffs at the nearly 80-year-old Kariega plant. More than 900 jobs are on the line, though not through any fault of Gerrard and his team, a company statement suggests.
The reason is ostensibly a change in Goodyear’s “go-to-market” strategy in the Europe, Middle East & Africa (Emea) region — specifically a change in who makes what across the group’s French, German, Slovenian, Polish, Turkish and Kariega plants.
It seems this is a corporate strategy response to a crisis in the world market for tyres. The locations of Goodyear’s Emea plants within the American multinational’s global production network are characterised by intense competition, with increasingly footloose Chinese and other Asean exporters targeting Europe in particular.
It is a characteristically different marketplace to when, in 1947, the Americans charmed the Uitenhage town council to get a favourable land deal to set up shop. Nor is it the same market Goodyear rejoined in the late 1990s after having divested after the Comprehensive Anti-Apartheid Act of the late 1980s. So much has changed. For instance, in Europe imports now constitute a third of all tyre sales across the passenger, truck and bus segments. Chinese exporters have enjoyed a rising share of the European common area market, from under a quarter of all imports in 2014 to nearly a third (31%) by 2023.
Where these Chinese imports came at volumes that displaced European producers or prices that undercut them, the European authorities imposed dumping duties, first in 2018 and again in April 2023. The UK is similarly busy with a review of anti-dumping measures on tyres from Chinese exporters.
SA has not been spared. As imports of certain tyre categories grew, with price undercutting proven in an investigation concluded in 2023, the International Trade Administration Commission (Itac) levied anti-dumping duties on a long list of Chinese products.
Local tyre manufacturer body SA Tyre Manufacturers Conference (SATMC) is now asserting in a new application that these measures are being circumvented, with some of the affected Chinese exporters operating through subsidiaries or related parties located in Cambodia, Thailand and Vietnam rather than China. ITAC has petitioned the SA Revenue Service commissioner to levy provisional duties on imports from these countries while it concludes its probe.
Meanwhile, it would seem that the circumstances giving rise to the section 189A process at Goodyear are closely related to the trade developments that European, British and SA anti-dumping measures have sought to remedy. This context is important, especially as Goodyear restructures the distribution of its manufacturing facilities and decides where it may retain a presence as a distributor only. It comes down to a corporate strategy choice in particular markets.
The Kariega situation with Goodyear is one of many manifestations of the crisis confronting industrial firms within buyer-driven value chains, which are increasingly characterised by overcapacity. It tells us something about the spillovers from unfair trade flows, and how firms in tradable sectors respond to arbitrage opportunities in world markets.
As one trade official suggested in a discussion recently, it sometimes feels like a game of “whack a mole” between exporters and regulators. Unfortunately, those who are getting “whacked” hardest in SA are residents of the KwaNobuhle and Rosedale townships near Kariega, whose livelihoods are being taken away by market shifts triggered elsewhere in the world. These are “exogenous factors”, as economists might say, the same as when Goodyear left in 1989. All we can do is hope the markets and politics turn; that the global glut will ease.
• Cawe is ITAC Chief Commissioner. He writes in his personal capacity.