IDC denies seeking strategic partner for Goodyear plant amid worker uncertainty

The Industrial Development Corporation (IDC) has denied reports that it has made an expression of interest to an identified strategic partner to take over operations of Goodyear tyres manufacturing plant in Kariega, Eastern Cape.

This comes after the National Union of Metalworkers of South Africa (Numsa) on Monday announced that the IDC had made an offer to buy the plant as Goodyear was very upfront that it will not allow anybody to use their intellectual property to manufacture tyres.

However, the IDC told Business Report that it acknowledged the challenges currently facing Goodyear in Kariega and was monitoring the situation as a key stakeholder in South Africa’s automotive sector.

"At present, IDC has not made any formal or informal offer to purchase, finance, or partnerwith Good Year. We note recent public comments suggesting IDC’s involvement in rescueefforts and wish to clarify that no such engagement has taken place," said Tshepo Ramodibe, IDC's head of corporate affairs.

"IDC remains committed to supporting industrial sustainability. If the Corporation is engaged to contemplate support, this will be considered through IDC’s established investment protocols and communicated through official channels and direct engagement with stakeholders and the media." 

This development comes on the heels of the Numsa confirming that lucrative exit packages have been secured for around 700 workers who are union members, along with others affected by the plant's uncertain fate.

During a media briefing earlier on Monday, Numsa's General Secretary Irvin Jim claimed that the IDC had expressed interest to acquire Goodyear's plant during the union's engagement with Goodyear and the Department of Trade Industry and Competition (the dtic).

"We started locally with the local brands that are manufacturing tyres. We knocked at their doors. Obviously, all of them feel that they are under strain," Jim said.

"And, therefore, cannot afford to take the burden of starting another plant whilst they are fighting for survival. Yes, there is one strategic partner that we are talking to." 

He refrained from disclosing the identity of the strategic partner in discussions but emphasized a commitment to ensuring that workers will have a stake in the potential new ownership model.

"It means workers of Goodyear would also have to have a stake if IDC gets to be involved. It can't be that they are going to save the plant only for strategic partners to get involved and workers are left out," he said.

"And yes, Numsa will be part of those particular engagements to look as to what is the viable option. That includes opening up opportunities to individuals who can invest."

However, Jim pointed to a broader concern regarding the influx of imported tyres that continue to flood the South African market, even after the International Trade Administration Commission (ITAC) successfully advocated for increased tariffs against unfair practices. 

"We continue to experience leakages of tyres that are coming from Vietnam, Cambodia, India and China that still find their way into our local market," Jim said, calling for stricter customs regulations to monitor tyre imports effectively.

He also called upon the government to impose a complete ban on imported tyres and enforce tighter regulations on companies that benefit from local manufacturing incentives yet still seek to import certain products.

"We are saying the government must be watertight because the very companies are basically beneficiaries of government incentives as they manufacture locally," Jim said, also bringing attention to the implications of the increasing number of imported vehicles penetrating the local market.

"We've got a crisis of jobs here. You can't be dumping 65% of complete finished built cars into our local market. Those brands must basically set up plants here and assemble," he said.

"And we can be very clear also there's nothing stopping us to say you can't bring cars here that have got tyres. If you're bringing cars, you must source tyres locally." 

BUSINESS REPORT