Tyre factory to close with loss of 430 jobs

About 430 people face losing their jobs as South Pacific Tyres scales down production, aiming to eventually close its Upper Hutt factory.

The Blenheim Street plant was looking to reduce production from seven to five days a week, and shut down in six to eight months, spokesman Philip Dinniss said.

The company was in consultation with unions and employees about the move.

South Pacific Tyres New Zealand manager Wayne Johnston said the closure had been caused by a declining local market, and by parent company Goodyear's US$100 million ($168 million) cost-cutting measures.

He said: "The pressures on the factory have been compounded over time by materially adverse foreign currency movements, which have further eroded already thin margins, a 30 per cent rise in energy costs over the past three years, and the previous loss of the national automobile assembly industry, which was once a significant market for SPT."

Closing the Upper Hutt plant would save the company $25 million, Goodyear said.

Mr Dinniss said workers were told this morning, and the plant had shut down operation until midnight.

The plant makes two million radial tyres for passenger cars a year.

- NZPA