Government wants to intervene in latest factory closure
However, within the context of rising unemployment in the province, industry stakeholders believe an economic disaster is looming. Once considered the heart of South Africa's manufacturing sector, the Eastern Cape's unemployment rate now sits at 49%. The level of unemployment in the province is so worrying, Stats SA highlighted as much in its latest Quarterly Labour Force Survey 2025. Above-inflation increases to energy and transport costs are making tyre manufacture in South African unviable. Image: Pexels
Nevertheless, the Department of Trade, Industry, and Competition (DTIC) hopes to intervene to prevent the factory closure, reports BusinessTech . Besides the factory closure itself, the DTIC worries about secondary industries dependent on the plant. 900 potential job losses don't account for the likes of catering, cleaning, security, and corporate investment initiatives.
Similar to interventions to prevent steel giant ArcelorMittal South Africa (AMSA) from shutting down, government hopes to find a solution. However, this is provided the company is willing to cooperate. So far, the multinational has remained silent on the matter, saying it only wants to 'optimise its footprint in South Africa.' As such, the closure forms part of a broader streamlining operation across Europe, the Middle East and Africa. The factory closure is part of a broader restructuring and may not be reversible. Image: File
Former South African ambassador to Japan, Smuts Ngonyama, urged government to intervene. He stressed that the plant's continued operation is vital not just for the region's economy but also for the dignity and livelihoods of its workers. Meanwhile, labour unions have also raised concerns with the South African Federation of Trade Unions (SAFTU).
'These decisions will deepen poverty, accelerate migration, and destroy any hope of economic transformation in the Eastern Cape,' warned the unions. Only time will tell if the company's commitment to global transformation will stymie any efforts to reverse this decision.
Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1.
Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
eNCA
an hour ago
- eNCA
SA's automotive sector changing fast with cheaper Chinese brands entering market
JOHANNESBURG - South Africa's automotive sector is changing fast with cheaper Chinese brands entering the market. Traditional brands are struggling, and many are starting to close down. BMW has had its own challenges. eNCA Money Desk anchor, Rofhiwa Madzena, spoke with BMW SA CEO Peter van Binsbergen about the current trends and the auto manufacturer's plan of action to deal with the changes.
eNCA
an hour ago
- eNCA
France says 'major issues' remain despite brandy price accord with China
PARIS - France on Friday praised China's steps to settle a trade dispute over European brandy imports but warned that "major issues" remained unresolved. The signs of a thaw in the row over the alcohol came as China's Foreign Minister Wang Yi met French President Emmanuel Macron and Foreign Minister Jean-Noel Barrot in Paris. In recent months China and the European Union have butted heads over Beijing's generous subsidies for its domestic industries. Beijing launched an investigation last year into EU brandy, months after the bloc undertook a probe into Chinese electric vehicle (EV) subsidies. In the latest salvo, China will from Saturday require European brandy exporters to raise prices or risk anti-dumping taxes of up to 34.9 percent. Beijing said 34 European brandy makers, including several French cognac producers, had signed an accord to avoid tariffs as long as they stick to an agreed minimum price. France's cognac makers' association BNIC, which includes key producers Hennessy, Remy Cointreau and Martell, confirmed that some companies had agreed to price increases in China to avoid anti-dumping taxes. Macron and Barrot praised China's steps to resolve the dispute but stressed they would discuss the outstanding differences with Wang. In a statement to AFP, Barrot said: "Several major issues remain unresolved, in particular the exclusion of certain players from the scope of the exemptions." "We remain fully committed to reaching a definitive solution based on the conditions that existed prior to the investigation," he said. Wang has held fraught meetings in several European countries this week. After meeting Macron and Barrot, Wang told a press conference: "The two sides had in-depth, active and sincere exchanges on Sino-French and European relations." No mention was made of the brandy dispute.
eNCA
5 hours ago
- eNCA
Tariffs threaten export sector
JOHANNESBURG - South Africa's automotive sector is changing fast with cheaper Chinese brands entering the market. Traditional brands are struggling, and many are starting to close down. BMW has had its own challenges. eNCA Money Desk anchor, Rofhiwa Madzena, spoke with BMW SA CEO Peter van Binsbergen about the current trends and the auto manufacturer's plan of action to deal with the changes. "Tariffs are bad for our auto industry because the South African auto industry is export-driven, and ideally we need tariff-free access to the markets we support," he said.
