Tire manufacturer shutdown puts Argentine industry on alert

The recent shutdown of Fate, an 86-year-old tire manufacturer that employed more than 900 people, is far from being an isolated case in Argentina. Official figures show that factories in the country are working at half of their capacity and that, since Javier Milei took office in December 2023, over 20,000 companies have closed. Fate’s closure is part of a wave that is not only affecting small and medium enterprises, but major companies as well. “A lot of companies are shutting down, especially in the Buenos Aires area,” said Florencia Fiorentin, chief economist at the Epyca consulting firm. “Basically, a drop in demand is combined with import liberalization — thus, companies are not selling.” Alejandro Assuma, the Fate representative at SUTNA, the tire workers’ union, said that the conflict started in 2024, when the company laid off 100 people. Media reported that the national administration blamed SUTNA for Fate’s shutdown, but Assuna rejected the idea. “At this moment, Fate has high production, a huge economic holding company with enormous backing with the aluminum company Aluar and energy companies — they are moving their investments to the energy sector,” said Assuma. The latest report by the statistics bureau, the INDEC, showed that energy is one of the few sectors that grew from December 2024 to December 2025. The report also said that the industry was working at 53.8% of its capacity in December. The sectors that are seeing the worst part are the automotive, plastic, and textile industries, which are only operating at 31.2%, 33.4%, and 35.2% of their potential. According to Lorenzo Sigaut Gravina, macroeconomics head at the Equilibra consultancy, “big companies, which manufacture finalized products, are the ones directly competing with imports — that’s why they are suffering the impact more.” Sigaut Gravina said that tradable sectors — those exposed to imports and exports — have dropped during President Javier Milei’s presidency. He called the phenomenon a “substitution” of locally made products for imported goods. “The economy used to be very, very closed, and it makes sense for it to open up, but… local production is falling and imports and import volumes are increasing. It was logical for imports to increase, but it was not so logical for local production to fall,” he added. The economist added that in most sectors, including the tire industry, “most imports are coming from China,” even though Milei is a close ally to Donald Trump, who is waging a trade war against the Asian country. Meanwhile, the government seems bent on opening up the economy to imports. “Some are going to go bankrupt,” said Miguel Boggiano, an economist and adviser to Milei, in an interview withTV station TN. “It’s not pleasant to say this, but neither is it pleasant that 47 million Argentinians have to pay high prices because 500,000 of them have the sacred cow,” he added.