The automobile industry ranks second among Argentina's main export sectors, with 60% of vehicles produced in the country destined for foreign markets.

The union conflict that paralyzed tire production in Argentina is already affecting car manufacturing companies, and the Argentine government hopes to find a quick solution to the crisis, which could cause great damage to the car industry, which is an essential sector for the country.

The crisis could generate losses of US$ 250 million to US$ 300 million in exports

The Japanese company Toyota suspended activities on Wednesday (28) at the factory located in the city of Zárate, in the province of Buenos Aires, Argentina, due to a lack of tires. 7,5 people work at this factory and cars are exported to 22 countries, as confirmed by company sources to Agência Efe.

Last Monday, due to the same problem, the American Ford also decided to interrupt two production shifts at its terminal in the city of Pacheco, Argentina.

The conflict in claiming better wages at the tire factories began in early 2022, however, with the blockades of the factories last Friday, the crisis worsened and led to the total and indefinite interruption of production by the three companies operating in Argentina: the local Fate, the Italian Pirelli and the Japanese Bridgestone.

A new conciliation hearing was held on Monday (26) at the Ministry of Labor, between company representatives and the Single Union of Tire Workers (Sutna). However, the hearing failed and a new conciliation meeting took place on Wednesday (28). Industry Secretary José Ignacio De Mendiguren said he was hopeful that a crisis deal could be reached on Wednesday. Since the impasse began, 35 hearings have already taken place.

The secretary informed that, in case the conflict continues, the production of automobiles in Argentina could decrease between 10% and 15%, which would mean losses between US$ 250 million and US$ 300 million in exports.

Automotive industry leads Argentina's industrial growth

There was an emergency meeting this Tuesday (27) between representatives of the automotive value chain, managers of tire manufacturing companies, leaders of other trade unions in the sector, the Minister of Economy, Sergio Massa, De Mendiguren and the secretary of the Comércio, Matías Tombolini, to analyze the impact of the problem.

The Association of Automobile Manufacturers (Adefa), after the meeting, warned in a statement that last Friday's decision to block tire factories leaves no option but to stop vehicle manufacturing in an industry that has grown in a pace of 29% in the year 2022.

Manufacturers also reported that the radicalization of this type of action generates uncertainty in export markets due to the possibility of shortages, in addition to affecting investment plans for development.

After the meeting, De Mensiguren told the press that the companies are asking for the blockades to be lifted, at least to release the tires inside the factories, and that they do not exclude the possibility of opening tire imports.

A Auto Industry it ranks second among Argentina's main export sectors, second only to agribusiness. 60% of vehicles produced in the country are destined for foreign markets.

In 2022, the automotive sector leads Argentina's industrial growth, with a production increase of 29,5% in the first eight months of the year. Between 2017 and this year, the automobile terminals operating in Argentina announced investments of US$ 6,26 billion.