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Around 500 employees will be displaced as Goodyear Tire and Rubber Co. decided to close its manufacturing plant in Las Pinas City on September 30 this year.

Goodyear Philippines Inc. Managing Director Dave Morin said the facility’s operating costs were no longer competitive after it lost its export business.

Morin said exports consist 45 to 50 percent of Goodyear’s business in the country. He said losing it, it was necessary to make some changes on their cost structure. “We need to close our manufacturing operations here and just import tires from our sister companies in the region,” he explained.

Goodyear Philippines would continue to provide the tire requirements of its replacement and original equipment customers by sourcing its supply from plants in Indonesia, Malaysia and Thailand.

“The domestic market is improving but it can’t grow at a rate fast enough to offset the loss in our export business,” Morin added.

The company started to feel the impact of the global recession late 2008 when its export business significantly shrank. To stay fluid, the company cut down seven percent of its total workforce, retrenching 46 employees.

Morin said that at the time, the company hoped the export business would bounce back. “But it has not come back and we do not anticipate it will in the future.”

The managing director said that employees who will be displaced will be given retrenchment packages that “far exceeds what is legally required.”

He added that the company has also set aside P1 million for “transitional programs” which would help the workers establish alternative livelihoods.

Despite closing its manufacturing facility, Goodyear Philippines would keep its presence in the country through its dealer network, Morin said.

The company would keep 100 of its employees for the sales and marketing, distribution and administrative function of its business.