UK tyre sector may face same job cuts as steel, warns industry association

A sobering message has been issued by the Retread Manufacturers Association – the future of 2,500 employees across the UK’s tyre industry is under threat unless something is immediately done to support the local industry. The RMA has spoken out in response to this week’s announcement that Tata Steel is to cut 1,050 jobs in the UK – including 750 at Port Talbot, the country’s biggest steelworks – as a result of a slump in global demand and cheap imports, particularly from China.

The RMA calls the steel imports entering the UK a “deluge” and opines that the dumping of cheap tyres from China into the UK market is devastating the retreading industry in the same way. This has, the association adds, direct implications for employment, the tyre recovery programme and the environment. The RMA is therefore calling for “urgent action” to allow the UK retreading industry to “compete on an equal footing with the cheap and subsidised imports coming in from China.”

Representatives from the RMA and the tyre industry have already raised the matter with ministers from the Department for Business to press for urgent measures to address this threat to the UK and European retreading sector.

The difficulties the local industry is experiencing become plain to see when comparing the cost of raw materials with the retail price of Asian imports. For a truck tyre, which typically weighs 60 kilogrammes, the materials cost approximately £1.16 per kilogramme, giving an overall total cost of £70. Meanwhile, Chinese imports are being sold at around £73, leaving a margin of just £3 for manufacturing, transportation, import duty and profit. The RMA asserts it is impossible for a commercial operation to retail tyres at this price without significant subsidy from a backing organisation or government.

At the meeting with minsters, the RMA reiterated that of the €1 billion the industry generates across the European Union, 60 per cent is generated by SME businesses, which are particularly vulnerable to the impact of dumping practises.

RMA chairman Patrick O’Connell, who led the tyre industry deputation to ministers, said: “We were extremely sorry to learn that the flooding of cheap imports into the UK steel industry has had such a devastating effect. This is terrible news for everyone affected and those working within the steel industry.

“Unfortunately, this mirrors what is happening in the UK’s tyre industry, with jobs under threat as a result of a flood of cheap tyres from China into the UK.”

“We are calling on the British Government and European Commission to take immediate action on the ‘dumping’ of tyres from China into the UK and European markets. Data supports the view that without intervention, the future of 2,500 employees, either directly or indirectly employed by the UK retreading industry, is under threat.”

O’Connell concluded: “We are committed to lobbying on behalf of the retread industry to secure its long-term future in the UK.”

Jukka Heiskanen January 20, 2016
Rubber price is under 1 pound per kg. Other matherials are much cheaper. So cost for 60 kg tyre is under 60 pounds. Some 30 - 45 is realistic,
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