Yokohama Announces Permanent Closure of Alliance Factory in Hadera - Affecting 500 Workers

The long-standing Alliance factory in Hadera, a key manufacturer of patented tires, will be permanently closed, Japanese multinational corporation Yokohama announced last month. The closure, set for December 31, 2024, follows a significant decline in orders, attributed to Israel's loss of its competitive edge in transportation, the company explained.

With nearly 500 employees, many of whom are long-time veterans, the closure has sent shockwaves through the local workforce. Workers now face an uncertain future, with fears of losing their livelihoods after decades of service.

Declining Orders and Global Market Shifts Prompt Closure

According to a letter from the factory's CEO, Yigal Trichter, the decision to shut down the plant follows an in-depth evaluation of global market trends. These include rising production and transportation costs, structural shifts in the tire industry, increased competition, and a significant decrease in demand for Israeli-made products.

"The transfer of production centers to South Asian countries, closer to raw materials and cheaper labor, has significantly impacted competitiveness," Trichter wrote. Despite efforts to streamline operations and adapt the product mix to market demands, the factory could no longer keep pace with these rapid industry changes.

Generous Compensation and Support for Workers

In response to the closure, workers went on strike demanding fair compensation, leading to negotiations between the Histadrut (Israeli Federation of Labor), the workers' committee, and the company. The parties reached an agreement for a substantial compensation package, amounting to approximately 100 million shekels.

Additionally, laid-off employees will receive five months of full pay as part of an adaptation period designed to assist in their transition.

A Legacy of Change: From 1950s to 2024

The Alliance factory has been a cornerstone of Hadera's industrial landscape since its founding in 1950. Over the years, it has changed ownership multiple times: sold to Eliezer Fishman in 1992, to the Warburg Pincus investment fund in 2007, and later to the Kohlberg Kravis Roberts investment group in 2013 for $500 million. In 2016, Yokohama acquired the plant for $1.2 billion.

Despite its rich history and significant efforts to stay competitive, the factory's operations are now deemed unsustainable by its parent company.

Support for Transition and Job Search Assistance

In a final message to the factory's employees, CEO Trichter assured workers that Yokohama would make every effort to ensure a respectful and fair retirement process. The company has pledged to cooperate with the workers' committee to facilitate job search assistance through external recruitment firms and job placement services.

"We will provide external consultants to help guide our employees through the transition and ensure they have the support they need during this difficult time," Trichter wrote.

As the factory’s closure looms, many in Hadera are left grappling with the loss of both their jobs and the factory's long-standing economic impact on the local community.