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The Goodyear Tire & Rubber Co. will be closing its manufacturing operations in the Philippines. The announcement was made on Friday by its Philippine subsidiary, Goodyear Philippines Inc. Said closure, which will be effective on September 30 this year, will displace 500 workers, or about 83% of its employees in the country. The decision was made as the company continues to find ways to cut its losses amidst the weak demand and high costs at the facility.

The tire plant that will be closed is located in barangay Almanza in Las Piñas City.

The company wasn’t spared from the effects of the global economic recession as it has slashed sales by almost 30% as consumers and auto makers skipped purchases or cut orders.

Pierre Cohade, president of the company’s Asia-Pacific region said, “Due to high costs compared to other plants in the regions, tires produced in the Las Piñas plant are not competitive in the marketplace.”

Meanwhile, David Morin, president and managing director of Goodyear Philippines said that their business model wherein 45 to 50 percent of their production is export and 50 percent for the domestic market has been doing well until the global financial crisis took its toll on their export business.

“In the fourth quarter last year, our export was severely and swiftly impacted by the global financial crisis that in December last year we retrenched 46 people,” he said.

The closure of the plant will result in the reduction of about 2 million units of annual capacity, part of Goodyear’s plan to cut 15 million to 25 million units in the next two years. Its production would be moved to lower-cost plants in the Asia-Pacific region.