Rubber exporters attack Goodyear plan

Rubber exporters attack Goodyear plan

BANGKOK (Reuters): Thailand, Indonesia and Malaysia, the world's top three rubber producers, have lodged a protest against efforts by Goodyear Tire and Rubber Co to charge suppliers for damage to rubber products.

"We just sent a letter to Goodyear informing them that it is unacceptable to demand suppliers take responsibility for any damage caused by defective products," Choosit Opaswonse, president of Thai Rubber Exporters' Association, told Reuters.

Goodyear, one of the world's leading tyre makers, has sent a letter to most suppliers and exporters in the three rubber producing countries, informing them that they must assume responsibility for any damage.

"What we are really concerned about is that what would happen if in the future Goodyear faced the same problem as Bridgestone's on a massive tyre recall. According to the new condition, Goodyear can put the blame on suppliers and it is us who have to pay for any costs incurred," said Choosit.

Ohio-based Goodyear said in the letter that it could no longer absorb financial losses caused by suppliers' errors.

"Goodyear can no longer absorb financial losses caused by suppliers' errors...," J.C. Whiteley, vice president of the firm's department of global product & process quality said in the letter obtained by Reuters.

"Accordingly, we will be charging back, via deductions from invoices, Goodyear's cost for rework, material losses, extra labor, downtime, and other costs incurred due to supplier failures to meet our quality, delivery and other requirements."

Exporters in Thailand, the world's largest rubber producer and exporter, said they needed more specifics.

"The letter is so vague and broad, especially the phrase 'other costs incurred due to supplier failures' -- what does that mean?... It could be anything, the scope is so limitless," said Choosit.