600 jobs lost as tyre firm shuts

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600 jobs lost as tyre firm shuts

A tyre factory in Melbourne’s outer north will close at the end of the year with the loss of almost 600 jobs — and the major union blames short-sighted management.

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A tyre factory in Melbourne’s outer north will close at the end of the year with the loss of almost 600 jobs - and the major union blames short-sighted management.

However, management says it respects the role of the unions in representing the workforce.

South Pacific Tyres at Somerton - which has been the subject of speculation about its future - will close on 31 December; and the workers were delivered the news this morning.

In a statement, the company said all 587 employees' full entitlements under their collective agreement would be honoured.

Viability ‘under a cloud’

Chief executive Judith Swales said the factory's viability had long been under a cloud, primarily because of its high operating costs and low volume capabilities.

‘To put this in perspective, conversion costs ... are almost double that of our average plants overseas and almost six times that of our most cost-competitive plant,’ Swales said.

‘Despite the best efforts of our manufacturing workers and their improvements in the area of quality, safety and waste, the Somerton factory is still not cost competitive.’

The South Pacific plant produces Goodyear and Dunlop tyres.

Management said it would work with the various unions as it prepared to wind down operations.

‘South Pacific Tyres respects the role of various unions in representing its workforce and will engage and collaborate with associates and their unions to ensure a smooth transition,’ Swales said.

‘Got it wrong’

However, NUW Victorian secretary Antony Thow said the company ‘got it wrong’ when it closed the local truck tyre manufacturing in 2000 and missed the boom in the market for commercial vehicles servicing the mining industry.

‘They showed a lack of foresight then, and are lacking foresight now by acting ahead of a refocusing of Australian automotive that should deliver a sustainable future for local industry based on production of more efficient and greener vehicles,’ Thow said.'

‘As a local producer, SPT would have been well placed to work hand in glove with car producers to take advantage of growing local and export markets.’

Bleak prospects

Thow said the immediate prospects of the workers finding good jobs now are ‘pretty bleak’.

‘We know from experience it often takes these workers two to three years to find comparable full time jobs again in manufacturing,’ he said. ‘Many will end up stuck in casual employment.’

Thow said the closure would also have a knock-on effect among other local suppliers ‘whose futures and jobs are now under a cloud’.

‘The knock-on effect of this closure could be enormous. That's why it's so important the Federal Government gets its Automotive Industry plan right and under way as soon as possible,’ he said.

‘Productivity at the SPT factory has jumped in recent years, but the high Australian dollar and skyrocketing oil prices are making life very difficult for local manufacturers.’


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