The national tire manufacturer Fate and the Single Union of Tire Workers (Sutna) They have a discussion about the beginning of the Preventive Procedure for Business Crisis (PPCE)which started the company in front of the National Secretariat of Laborled by Julio Cordero. This procedure enables the company to open suspensions, reductions in working hours or dismissals for economic reasons or lack or reduction of work.
During the Government of Javier Milei almost 38.178 companies They started the Preventive Procedure for Business Crisis (PPCE)of which only 6.120 were closed with a spontaneous agreement between the parties. “There is a slight increase in the statistics compared to previous years, “in which between 60,000 and 70,000 files were recorded per year”official sources said.
Fate dismissed 97 employees
Fate dismissed 97 employees from its workforcethe 5% allowed by labor laws, as part of the adjustment of its structure in mid-May, which generated controversies with the union and an escalation in the forceful measures taken by the workers. According to reports from Sutnavarious union actions took place, which had to be stopped after the Secretariat of Labor of the Nation notify the parties.
From the labor portfolio, they confirmed that Fate is just starting the PPCE. The bill will take some time because “several hearings are held and many things are evaluated,” and so they pointed out that “it will not necessarily be approved.” The first hearing will be next Monday, July 15.
Along these lines, the head of the Sutna, Alejandro Crespoexplained that The company is seeking to “make working methods more flexible”such as changes in work systems, reduction of working hours, elimination of bonuses, modifications of continuous work, among others.
Recession
The actual economic crisis is one of the main causes that explain the complex situation that companies are going through. The latest study by the Center for Political Economy of Argentina (CEPA) indicated that the 65% of the companies surveyed reported a drop of more than 15% of its saleswhich was reflected in a drop in production higher than fifteen%according to 63.2% of those surveyed, showing the close link between both instances of the value chain.
The Idle installed capacity is currently over 40%, according to official data. In this sense, CEPA data agree that “ 6 or less out of 10 machines are used“, according to 40% of those surveyed.
Fate’s Vision
From the tire manufacturing and export company, they highlighted that the activity currently “is exposed to negative factors that severely increase the cost of production”They listed: “tax overburden, exchange restrictions for the payment of inputs from abroad, additional costs derived from labor legislation, low labor productivity, and high labor conflict, among others.”
They stressed that this is about a process similar to that of early 2019when the company was immersed in “a deep crisis with recurring losses and high indebtedness”, which was “rectified through capital contributions from its main shareholders”.
However, since Sutna emphasized the positive balances of the 2021-2023 balance sheetswhich, according to the company, served to “temporarily offset the loss of competitiveness in previous years and achieve an improvement in the company’s results, after five consecutive years of heavy losses that began in 2016.” That gain, according to Sutna, is around US$192 million.
In a statement, Fate stressed the “persistent lack of cost competitiveness,” which is coupled with a “sharp drop in domestic demand,” which they estimate to be close to 30%. “In the first six months of 2024 alone, the company’s operations generated an estimated loss of US$30 million”they noted.
According to the company, this scenario is what led it to “adapt their production operations to the market context, optimizing their production levels, shift schedules, staffing and other measures aimed at improving competitiveness”.
Source: Ambito
