8-3-2024 (KUALA LUMPUR) One of the world’s leading tyre manufacturers, Goodyear Tire & Rubber Co, is set to close its plant in Malaysia on June 30, a move expected to have repercussions for more than 500 employees, as revealed by the company and Malaysia’s investment promotion agency.
The decision to shutter the plant located in the Shah Alam district, Selangor state, comes as part of Goodyear’s corporate restructuring initiative known as Goodyear Forward. The program, aimed at achieving US$1 billion in cost reductions by 2025, is a strategic effort to streamline operations and enhance efficiency.
In a statement issued on Thursday (Mar 7), Goodyear acknowledged the gravity of the decision, emphasizing their commitment to treating associates with care and respect. The company assured that it would continue to serve the Malaysian market through its high-quality products and solutions produced at other manufacturing sites within Goodyear’s global footprint.
However, this closure follows years of allegations against Goodyear, including claims of labour abuses at the Malaysian manufacturing plant. Accusations ranged from unpaid wages to excessive overtime and threats against migrant workers. In 2022, a settlement agreement was reached between the company and the workers, with each employee receiving compensation ranging from 50,000 ringgit to 200,000 ringgit (US$10,600 to US$42,600), dependent on their length of employment, according to Reuters.
Addressing the impact of the plant closure, the Malaysian Investment Development Authority (MIDA) released a separate statement on Friday. MIDA indicated that approximately 550 employees would be directly affected by the plant’s closure. Collaborative efforts between the Malaysian government and Goodyear are underway to establish a support framework for affected workers. This includes initiatives such as upskilling and reskilling programs, along with facilitating job placements to ease the transition.
Malaysia, grappling with accusations of labour abuses in various sectors, has faced scrutiny from its Human Resources Ministry and U.S. authorities. The country relies on millions of migrant workers for the production of a wide range of goods, from palm oil to medical gloves and semiconductor chips. In response to the allegations, the Malaysian government has set a target of 2030 to eliminate forced labour practices, reflecting a commitment to addressing labour-related concerns in the nation’s industries.
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