The closure of FATE, a major tire manufacturer in Argentina, was a carefully considered decision influenced by a drastic drop in sales and operational efficiency, with the plant only operating at 30% capacity. The decision will affect 920 employees and disrupt a broad commercial network associated with the company. Shareholders, including the Madanes Quintanilla family and their Brazilian partner Vipal, chose to shutter the factory rather than pursue a bankruptcy process, indicating the severity of the situation.

FATE has committed to settling all outstanding debts and paying severance to its employees according to current labor laws, which are more favorable than provisions under the proposed Labor Reform. The company is also seeking preventive crisis measures from the Ministry of Labor as part of managing its closure. Factors such as the influx of cheaper Chinese tires, which undercut local pricing by up to 40%, and a general decline in purchasing power among consumers have been cited as contributing elements leading to this drastic move.

This closing marks a significant shift in the tire manufacturing landscape in Argentina, reflecting broader economic challenges in the country. The labor market may face further pressures as the closure impacts not only direct employees but also those in the associated supply chain, highlighting the interconnected nature of local economies and the repercussions of global market trends.