Posted on 20 January 2016
Without immediate intervention, the future of 2,500 employees across the UK’s tyre industry is under threat.
That’s the alarming message from the Retread Manufacturers Association as it responds to this week’s announcement that Tata Steel is to cut 1,050 jobs in the UK – including 750 at Port Talbot, the UK’s biggest steelworks – as a result of a flood of cheap imports, particularly from China.
In the same way as the deluge of cheap imports has damaged British steel, the ‘dumping’ of cheap tyres from China into the UK market is devastating the retread tyre industry with direct implications for employment, the tyre recovery programme and the environment.
The Retread Manufacturers Association (RMA) is calling for urgent action to allow the UK retread 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 the threat already being felt across the UK and Europe.
The situation becomes clear by simply comparing the cost of raw materials with the retail price of Asian imports.
For a truck tyre, which typically weighs 60 kilos, the materials cost approximately £1.16/kilo, 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.
Patrick O’Connell, Chairman of the RMA, 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.”
He added: “We are committed to lobbying on behalf of the retread industry to secure its long-term future in the UK.