The goodyear factory in Kariega, Nelson Mandela Bay has announced that it will close. The Daily Maverick reports:

The factory, in Kariega (formerly Uitenhage), was opened in 1947. About 900 employees will lose their jobs, but fears are that this will have a larger secondary impact as other industries, such as catering, security and corporate social investment projects will be affected by the decision.

Goodyear says that they are optimising their portfolio and footprint and the closure of manufacturing in South Africa is not a reflection on the years of dedication of the South African team. They will maintain sales and distribution and their Hi-Q retail presence here.

The Nelson Mandela Bay Business Chamber comments on the causes:

“This highlights the massive pressure which tyre manufacturers are under due to enabling environment issues such as the logistics challenges; lack of service delivery at a municipal level; inadequate maintenance of electricity, water and sanitation infrastructure; increased costs relating to safety and security; above-inflation input costs for essential services such as electricity; as well as cheap tyre imports which are flooding the market,” she said. 

That brings us to the policy choices. We can levy tariffs on imported tyres and make South African tyre manufacturing great again. That is relatively easy to do, and we have been doing it with little success. Or we can try to fix the supply side to make local manufacturing more competitive. That is relatively difficult, but we have been talking about it quite a bit.

We can write as similar post about local long steel, or poultry.

To my mind the bit that is frequently missed when arguing for protection of local jobs is that consumers pay for it. And when the protected product is an input in someone else’s production process, it adds to the cost of doing business and makes the next sector uncompetitive.