After over 50 years of manufacturing operations in the country, Goodyear Philippines Inc. it will cease manufacturing operations at its Las Piñas plant Wednesday displacing 500 workers as a result.

David Morin, president and managing director of Goodyear Philippines, earlier said that company’s business model wherein 45 to 50 percent of their total production is exported and 50 percent for the domestic market has been working well until the global financial crisis took its toll on the its export business starting last year.

“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,” Morin said.

The company made an assessment in the first quarter this year of the economic toll and was hoping for a recovery. Goodyear maintains a market leadership position retail outlets of 5x more than its nearest competitor.

“To date it (exports) has not come and we are not seeing a recovery in the future making our business model no longer sustainable,” he said.

Goodyear Philippines exports to the world including North American, Europe, South Africa, Germany, Middle East among other countries.

With the loss of the exports market, Morin said they are faced with a huge unutilized manufacturing capacity at its plant in barangay Almanza in Las Piñas City.

Morin further said that its domestic sales mostly to original equipment manufacturers (OEMs) has remained positive but the growth would not be sufficient enough to offset the significant loss from their export business.

The first quarter sales this year has been stable with slight improvement in the second quarter but the mid-year sales are not encouraging and the company is expecting a five percent decline.

“We could have managed the situation if it is a domestic discussion but this is not and like many manufacturing companies if their export is bigger than the domestic business then we are left with a huge underutilized capacity,” he said.

The trade liberalization in ASEAN, which allows zero import duty on tires starting next year, has made it easier for Goodyear to arrive at their decision to close the Philippine plant.

Morin said they will import the tire requirements from Goodyear’s sister companies with manufacturing operations in Indonesia, Thailand and Malaysia to supply the Philippine market.

“We see right now that 50 percent of the market is imported so this is a natural progression,” Morin said.

Morin further said that the exports markets that they serve may now be taking orders from their nearest suppliers and not necessarily from the three ASEAN countries where Goodyear has manufacturing facilities.