Pressure on SA tyre makers

Business Day, 21 February 2000

CAPE TOWN - The lack of a skills base in SA is hampering manufacturers’ attempts to achieve global competitiveness, according to Goodyear SA MD Rich Hauman.

He says tyre-manufacturing companies need to enhance the skills of workers in their plants, from the factory floor through to operations and planning levels, if they are to rise to the challenge of exporting the 30% to 40% of capacity that is excess to domestic demand, and maintain employment levels.

About 15% to 20% of the tyres sold in SA are imported, which he says has put pressure on local manufacturers to remain competitive in terms of both quality and price. “SA tyre prices are already among the lowest in the world, especially in the truck tyre sector.’

He describes SA as a third world country making first world quality tyres with first world equipment, training and operational methods. However, manufacturers are under pressure to offer third world prices and have to contend with third world practices, such as imports of used tyres.

He warns that wildcat strikes, such as those experienced recently by Volkswagen, influence investment decisions and run a real risk of causing permanent damage to the country's reputation.

Until SA's first democratic election the US-based Goodyear group merely supplied tyres to the SA market, but the output of its Uitenhage plant has increased steadily over the past five years to the point where it is currently exporting up to 40% of its production. The main export markets are in Europe, the US and other African countries.