Dispute leaves Argentina without tires and jeopardizes the automotive industry

Getting tires has become an impossible mission in Argentina, where a labor conflict has caused shortages and is beginning to paralyze the automotive industry.

The difficulty in obtaining tires has already made some Argentines decide to buy in neighboring Uruguay.

The production chains of the automotive industry have been affected in some Argentine companies due to an escalation of conflicts between tire manufacturers and their workers.

Since September 24, several companies in the sector have had to halt their activities.

The situation worries the employers, who warn of sharp increases in tire prices and negative consequences for the country’s general economy.

On September 26, Ford’s Argentine subsidiary in the city of General Pacheco (northeast of the province of Buenos Aires) decided to halt its production shifts due to the shortage of tires.

Toyota, for its part, opted to fit other tires on its models while awaiting supplies.

According to the Argentine media La Nación, other industrial plants such as Volkswagen, also in Pacheco, or Renault, in Córdoba, will be able to continue their production lines as usual in the next few days.

Meanwhile, General Motors, based in the province of Santa Fe, will not see its production lines affected because its tires are imported from Brazil.

During this period, the car factories kept an irregular stock, but since Saturday, September 24, they stopped receiving tires manufactured in Argentina.

The measures arise after the conflict between the manufacturers Fate, Pirelli, and Bridgestone with the Single Union of Argentine Tire Workers (Sutna).

The dispute between the workers and the employers has been going on for more than five months and required the intermediation of the Ministry of Labor, which is still looking for solutions after 34 hearings and no agreement between the parties.

Given this scenario, the companies warn that the sector’s activity is fundamental for the economic and productive matrix of the country, which is going through accumulated inflation of 56.4%.

Argentina supplies 60% of the tire market with domestic production, while the rest comes from importers such as Michelin, Goodyear, Prometeon, and Continental, which have their own distributors.

According to Página12, in 2021, the country produced 8 million units. Of the total, one-fifth was destined for export.

However, Argentina imported 5 million tires that year, and the trend since 2019 shows growth in imports and price increases of almost 80% compared to 2021.

A Pirelli tire, which in 2021 cost ARS 10,367 (US$71), is currently offered in the market at ARS 31,358.

While the conflict remains unresolved, Argentines have opted to purchase tires in neighboring Uruguay in search of greater variety and better prices.

Although it is generally more convenient for Uruguayans to buy products in Argentina due to the exchange rate, in Salto, an Uruguayan department bordering the Argentine city of Concordia (Entre Ríos), the prices of tires are more beneficial for Argentines who have shot up demand and are positioned as the main customers.

With information from Sputnik